C-88/99

OPINION OF MR RUIZ-JARABO — CASE C-88/99

OPINION OF ADVOCATE GENERAL DÁMASO RUIZ-JARABO COLOMER delivered on 11 May 2000 *

1. The Tribunal de Grande Instance (Regio- the acquiring company paid the sum of nal Court), Béthune, France, has referred a FRF 757 926 by way of capital duty, at the question to the Court of Justice for a higher tax rate (1.20%) provided for in the preliminary ruling under Article 177 of second subparagraph of the first paragraph the EC Treaty (now Article 234 EC), in of Article 816-1 of the Code General des order to settle a dispute between Roquette Impôts (General Tax Code) then in force. Frères and the Direction des Services Fis- caux (Tax Department) relating to the recovery of national taxes paid but not due. Specifically, the applicant company seeks a refund of the sum paid in 1987, in respect of a merger, by way of capital duty levied under national regulations contrary to the provisions of Directive 69/335/EEC 1 (hereinafter 'Directive 69/335').

3. On 24 December 1996 Roquette Frères disputed its liability to pay that duty and applied to the Direction des Services Fis- caux, Pas-de-Calais, for its repayment. The application was rejected on 3 April 1997. 1. The facts in the main proceedings

2. In the order for reference, the national court states that, at an extraordinary gen- eral meeting held on 19 June 1987, it was agreed that Roquette Frères would merge with Roquette Technique et Dérivés. On 8 July 1987, on the occasion of the merger, 4. On 5 June 1997 Roquette Frères brought an action seeking a declaration that the tax levied on it in 1987 should be * Original language: Spanish. cancelled and an order requiring the State 1 — Council Directive 69/335/EEC of 17 July 1969 concerning to repay the sum paid but not due, together indirect taxes on the raising of capital (OJ, English Special Edition 1969 (II), p. 412). with the accrued interest.

2 — These two paragraphs were added to the article by Law 89- 936 of 29 December 1989. From the time it came into force on 1 January 1990, the tax law time-limits were applied to actions for the recovery of taxes paid but not due, commenced on the basis that a judicial decision had held that those taxes were contrary to Community law, instead of the 30-year limitation period established by the general law in Article 2262 of the Civil Code. See Libaud, V. and Renault, O.: 'La restitution du droit de 1,20% indûment The third paragraph provides that, where perçu à l'occasion de fusion de sociétés', Droit fiscal 1994, no 39, p. 1376 to 1380, especially p. 1378. such incompatibility has been established 3 — The Court of Justice held that the levying of the tax was by a judicial decision, the action for incompatible with the Directive in its judgment of 13 Feb- recovery of sums paid or for compensation ruary 1996 in Joined Cases C-197/94 and C-252/94 Bautiaa and Société Française Maritime (1996] ECR I-5052, para- for damage may only relate to the period graphs 41 and 42.

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12. In spite of the provisions of that Directive, duties continued to be levied in France on certain transactions to raise capital and it was some years before the IV. Directive 69/335 and the levying by relevant provisions of the General Tax France of a proportional registration duty Code were amended. The 1992 Loi de in the event of a merger Finances (Finance Law) abolished the 1% proportional registration duty on the con- tributions referred to in Article 810-1 and II, replacing it with a fixed duty of FRF 430, whilst the 1994 Loi de Finances 10. The aim of Directive 69/335 was to abolished both the 3% proportional regis- eliminate, by means of harmonisation, the tration duty provided for by Article 812-I-1 indirect taxes on the raising of capital in on capital increases effected by the capita- force in the Member States, namely, the lisation of profits or of permanent or duty chargeable on contribution of capital to companies and the stamp duty on securities, which gave rise to discrimina- 4 — Council Directive 73/80/EEC of 9 April 1973 fixing com- tion, double taxation and disparities which mon rates of capital duty (OJ 1973 L 103, p. 15). interfered with the free movement of capi- 5 — Council Directive 85/303/EEC of 10 June 1985 amending Directive 69/335/EEC concerning indirect taxes on the tal. Article 7 of the Directive established raising of capital (OJ 1985 L 156, p. 23). that the rate of capital duty could not 6 — Article 9 of Directive 69/335 provides that, in some cases, the rates of duty fixed in Article 7 need not be applied: exceed 2% or be less than 1% and made 'Certain types of transactions or of capital companies may be the subject of exemptions, reductions or increases in rates provision for the Member States to reduce in order to achieve fairness in taxation, or for social the rate by 50% or more in specific considerations, or to enable a Member State to deal with special situations. The Member State which proposes to circumstances and under certain condi- take such a measure shall refer the matter to the Commis- sion in good time, having regard to the application of tions. Article 102 of the Treaty.'

14. Both the Tribunal de Grande Instance, Dax, and the Tribunal de Grande Instance, Quimper, referred a question for a preli- minary ruling to the Court of Justice, The reply given to the national courts was requesting it to interpret whether Arti- that Article 7(1) of Directive 69/335 pre- cle 7(1) of Directive 69/335, as amended, cludes the application of national laws with effect from 1 January 1976, by Direc- maintaining at 1.20% the rate of registra- tive 73/80, and subsequently, with effect tion duty on contributions of movable from 1 January 1986, by Directive 85/303, property made in the context of a merger. precluded the application of a national law maintaining at 1.20% the rate of registra- tion duty on contributions of movable 7 — Judgment in Bautiaa and Société Française Maritime, cited assets made in the context of a merger. above in footnote 3. paragraphs 18 and 40 to 42.

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V. Procedure before the Court It explains that the 1989 amendment, which added paragraphs 2 and 3 to Article L. 190 of the Livre des Procédures Fiscales, was made in reaction to the judgment given on 3 February 1989 in the Alitalia case by the French Conseil d'État (Council of State), which held that certain restrictions 16. Roquette Frères, the applicant in the on the right to deductions were contrary to main proceedings, the French and Italian the Sixth Directive, and to 17 judgments Governments and the Commission submit- given on 7 November 1989 by the French ted written observations within the period Cour de Cassation (Court of Cassation), prescribed for that purpose by Article 20 of which held that an action for recovery of the EC Statute of the Court of Justice. sums not due, seeking the refund of a tax declared contrary to Community law, was subject to the 30-year limitation period under general law.

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grounds that one rule is incompatible with It adds that published views of adminis- a higher-ranking rule, irrespective of its trative law interpret a judgment as mean- rank and nature. It adds that the aforemen- ing, for these purposes, any final, non- tioned provision extends, in certain circum- appealable judgment of a national court stances, the normal time-limits for bringing and the judgments of the Court of Justice in actions under French law, in so far as it actions for failure to fulfil obligations and gives a second chance to taxpayers who preliminary ruling proceedings. 9 were not aware that the rule applied was invalid and had not appealed within the normal time-limit. Although the time-bar contained in the provision may, in some cases, cause the application for recovery to be dismissed in whole or in part, the French Government considers that the period fixed, between four and five years, is It observes that, although those provisions perfectly reasonable. establish a special procedure concerning taxation, they form part of the rules which regulate the ordinary tax procedure at issue and, even though they do not affect all indirect taxation, they apply to actions for recovery of tax in every case in which a national, Community or international court has given judgment holding that the 19. The Italian Government believes that legal provision applied is incompatible with the disputed French legislation is compati- a higher-ranking national, international or ble with Community law, since it is applied Community rule. Furthermore, it considers without distinction to judgments of the that both the time-limit for appealing and Court of Justice and those of national the period to which recovery of tax paid courts, and the time-limit for bringing an though not due may relate are reasonable. action for recovery is reasonable.

Community law precludes the tax legisla- also, in 1987, paid a large sum in respect of tion of a Member State from establishing registration tax on a merger; the same that an action for recovery of sums paid but national provisions applied, and the appli- not due, brought on the basis of a judgment cant companies were in the same legal that one rule is incompatible with a higher- position: their applications for recovery of ranking rule, may relate only to the period the sums paid but not due, brought on the following 1 January of the fourth year basis of the judgment of the Court of preceding that of the judgment. Justice in the Bautiaa case, were admissible since they had been filed within the pre- scribed time, but the Tax Authority rejected them on the merits, because the limitation period prescribed by paragraph 3 of Article L. 190 of the Livre des Procédures Fiscales 22. Before proposing a reply to this ques- was applicable to them. tion, I wish to make two preliminary observations concerning the development of the proceedings and a few comments about the attitude adopted by the national court.

When it delivered its judgment in January 1998, the Tribunal de Grande Instance, Angoulême, was unaware of the judgment that the Court of Justice had delivered on 23. Firstly, the judgment of the Tribunal de 2 December 1997 in the Fantask case, n Grande Instance, Béthune, in which it and the Registry sent it a copy of that decided to refer a question for a prelimin- judgment on 21 July 1998. As a result of ary ruling, was delivered on 24 March that communication, the national court 1998. However, for reasons I am not aware considered that its doubts had been ade- of, the document did not reach the Registry quately dispelled and withdrew the ques- of the Court of Justice until almost a year tion which it had referred for a preliminary later, to be precise, on 15 March 1999. ruling. 12

The national court replied that, in the light of the responses of the parties, it had Of course, if the solutions recommended by decided to proceed with the reference. the Study Group on the future of the legal system of the European Communities — in Chapter A(2)(c) of its report which was published public in February 2000 — had been adopted, this would be an example of 26. In view of these circumstances, I think a question referred for a preliminary ruling it is necessary to recall the case-law of the which the Court could have resolved by Court of Justice, according to which Arti- means of a reasoned order, because the cle 177 of the Treaty establishes direct reply is obvious and appears in the case- cooperation between the Court of Justice law. and the national courts by way of a non- contentious procedure excluding any initia- tive of the parties, who are merely given the opportunity to submit observations. 1 8I believe it is important to emphasise that 27. I am also surprised that the national court should have echoed the words of the 13 — By order of 25 February 1998, the Tribunal de Grande Instance, Lyon, had referred two questions for a prelimin- applicant in the main proceedings, which ary ruling (Case C-72/98) requesting the interpretation of maintains that French legislation has intro- Directive 69/335. The circumstances of the case it was hearing were very similar to those of the two cases I have duced a specific procedure to apply to mentioned, with the difference that the applicant company actions based on the infringement of a had paid the registration duty in 1993. The Tax Authority subsequently allowed the applicant company's application provision of Community law by a national for a refund and the national court therefore withdrew the questions it had referred. The case was removed from the regulation, which is different from the register by order of the President of the Court of Justice of 3 February 1999. procedure which applies where the action 14 —Judgment of 15 September 1998 in Case C-231/96 Edis for recovery of a sum paid but not due is [ 1998] ECR I-4951. based on the incompatibility of two 1 5 — J u d g m e n t of 15 September 1998 in Joined Cases C-279/96, C-280/96 and C-281/96 Ansaldu Energm and national provisions of different ranks. Others |1998| ECR I-5025. 16 — Judgment of 15 September 1998 in Case C-260/96 Spac [19981 ECR I-4997. 17 — Judgment of 17 November 1998 in Case C-228/96 Aprile [ 1998] ECR I-7141. 18 — Judgment of 9 December 1965 in Case 44/65 Hessische Knappschaft [1965] ECR 965; order of 18 October 1979 in Case 40/70 Sirena [ 1979] ECR 3169, and judgment of This surprises me because the national 19 January 1994 in Case C-364/92 SAT Fluggesellschaft 119941 ECR I-43, paragraph 9. court cannot be unaware of the case-law

These two conditions, required of the various national systems regarding claims 28. Having said that, it only remains for for refunds of amounts paid but not due, me to remind the French court which has the legality of which derives from a Com- referred the question for a preliminary munity provision, are that there must be no ruling of the case-law of the Court of discrimination and the actions concerned Justice concerning recovery of sums paid must not be rendered illusory. Those but not due, which is clear and extensive. 20 requirements are an expression of the 'principle of equivalence' (with the require- ments laid down for similar domestic claims) and of the 'principle of effective- ness' of Community law, respectively. 23 29. According to that case-law, which is summarised in paragraph 12 of the Deville judgment, 21 in the absence of Community rules concerning the recovery of national taxes which have been wrongly levied, it is for the domestic legal system of each 30. Following this case-law, the Court of Member State to designate the courts Justice has acknowledged, in the interests having jurisdiction and to determine the of legal certainty which protects both the procedural conditions governing actions at taxpayer and the authority concerned, that law intended to ensure the protection of the the setting of reasonable limitation periods rights conferred by the direct effect of for bringing proceedings is compatible with Community law. In this connection, the

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Court has decided that such periods cannot EEC/Sweden Agreement to start to run be regarded as rendering virtually impossi- from an earlier point in time than that ble or excessively difficult the exercise of from which the duties were discontin- rights conferred by Community law, even if ued; 26 the expiry of those periods necessarily entails the dismissal, in whole or in part, of the action brought. 24

— in the absence of Community rules on the repayment or remission of import or export duties, it is not contrary to the general principles of Community As examples of this established case-law, I law for the national legislation of a can point out that the Court has held that: Member State to provide for a manda- tory time-limit of three years for the submission of all applications for the repayment of duties unduly levied; 27

— application to a claim for repayment based on breach of Article 95 of the Treaty (now, after amendment, Arti- — Community law does not prevent a cle 90 EC) of a rule of national law Member State which has not properly under which proceedings for recovery transposed Directive 69/335 into of charges unduly paid are time-barred national law from resisting actions for after a period of five years is not the repayment of charges levied in contrary to Community law, even if breach thereof by relying on a limita- the effect of that rule is to prevent, in tion period under national law which whole or in part, the repayment of runs from the date on which the those charges; 25 charges in question became payable;28

the full extent of their rights but also — Community law does not preclude the specifies the conditions under which application of a national provision loss or damage sustained as a result of which, for all actions of repayment of the belated transposition will be made customs charges, imposes a special good, cannot be regarded as making it time-limit of five, and subsequently excessively difficult or, a fortiori, vir- three, years, instead of the ordinary tually impossible to lodge a claim for limitation period of 10 years for reparation; 29 actions for the recovery of sums paid but not due, provided that that time- limit, which is similar to that imposed for certain taxes, applies in the same way to actions based on Community law for repayment of such charges as to those based on national law. Nor does Community law prohibit a Member State from resisting actions for repay- ment of charges levied in breach of Community law by relying on a time- — Community law does not prohibit a limit under national law even if that Member State from resisting actions Member State has not yet amended its for repayment of charges levied in national rules in order to render them breach of Community law by relying compatible with those provisions; 31 on a time-limit under national law of three years, by way of derogation from the ordinary rules governing actions between private individuals for the recovery of sums paid but not due, for which the period allowed is more favourable, provided that that time- — observance of the principle of equiva- limit applies in the same way to actions lence implies that the national proce- based on Community law for repay- dural rule applies without distinction ment of such charges as to those based to actions alleging infringement of on national law. Nor does Community Community law and to those alleging law prevent a Member State from infringements of national law, with resisting actions for repayment of respect to the same kind of charges or charges levied in breach of a directive dues. That principle cannot, however, by relying on a time-limit under be interpreted as obliging a Member national law which is reckoned from State to extend its most favourable the date of payment of the charges in rules governing recovery under question, even if, at that date, the national law to all actions for repay- directive concerned had not yet been ment of charges or dues levied in properly transposed into national breach of Community law. Thus, Com- law; 30 munity law does not preclude the legislation of a Member State from laying down, alongside a limitation period applicable under the ordinary 29 — Judgment in Palmisani, cited above in footnote 23, paragraph 29. 30 — Judgments in Edis, cited above in footnote 14, paragraphs 39 and 49; Spac, cited in footnote 16, paragraph 23 and 32, and Ansaldo Energia and Others cited in footnote 15, 31 — Judgment in Aprile, cited above in footnote 17, paragraphs paragraph 23. 34 and 45.

32. In case any doubt still remains, I wish to add that the fact that the temporal 31. The case-law which I have just cited is effects of the Bantiaa judgment are not not called into question by the interpreta- limited is irrelevant for these purposes. 38 In tion provided by the Court of Justice in the this regard it must be remembered that the Emmott judgment in 1991, 33 according to fact that the Court has given a preliminary which, until such time as Directive ruling interpreting a provision of Commu- 79/7/EEC is transposed into national nity law without limiting the temporal law, 34 a defaulting Member State may not effects of its judgment does not affect the rely on an individual's delay in initiating right of a Member State to impose a time- proceedings against it in order to protect limit under national law within which, on rights conferred upon him by the provisions penalty of being barred, proceedings for of the Directive, and a period laid down by repayment of charges levied in breach of national law within which proceedings that provision must be commenced. 39 must be initiated cannot begin to run before that time.

sion, is the same as that which governs 34. I therefore agree with the French Gov- similar actions of a domestic nature. It also ernment, the Italian Government and the observes the principle of effectiveness Commission that Community law does not because, although the restriction of the preclude the legislation of a Member State, period to which the claim may relate to the when introducing procedures concerning four or five years preceding the judgment taxation, from establishing that an action may mean that, in some cases, the action is for recovery of sums paid but not due, dismissed in its entirety, it does not render it brought on the basis of a judgment that one virtually impossible or excessively difficult rule is incompatible with a higher-ranking for individuals to exercise rights conferred rule, may relate only to the period follow- on them by Community law. ing 1 January of the fourth year preceding that of the judgment.

VII. Conclusion

35. In the light of the foregoing considerations, I propose that the Court of Justice should reply to the question referred for a preliminary ruling by the Tribunal de Grande Instance, Béthune, in the following way:

Community law does not preclude the legislation of a Member State, when introducing procedures concerning taxation, from establishing that an action for recovery of sums paid but not due, brought on the basis of a judgment that one rule is incompatible with a higher-ranking rule, may relate only to the period following 1 January of the fourth year preceding that of the judgment.

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