C-147/01

OPINION OF MR JACOBS — CASE C-147/01

OPINION OF ADVOCATE GENERAL JACOBS delivered on 20 March 2003 1

1. On 9 March 2000, in response to 3. The Verwaltungsgerichtshof now wishes questions from the Austrian Verwaltungs- to know whether it is compatible with the gerichtshof (Administrative Court), the EKW ruling, and with Austria's duty of Court of Justice ruled in the EKW case 2 cooperation under Article 10 EC, to apply that Article 3(2) of Council Directive such an amendment to claims raised before 91/12/EEC 3precluded the maintenance of the date of that judgment. certain local and regional beverage taxes in Austria, in so far as they applied to alcoholic beverages. However, it limited the effect of that ruling, as regards claims for reimbursement of tax paid or charge- able before the date of the judgment, to claimants who had already initiated legal proceedings or raised an equivalent admin- istrative claim.

Background and proceedings

6. On 1 July 1999, Advocate General 9. The Advocate General's Opinion gave Saggio delivered his Opinion in that case, rise to considerable concern that very large concluding that the Court should find the sums would have to be reimbursed, seri- tax incompatible with the excise duty ously compromising local and regional directive and the State aid rules. finances. Before the Court, the Austrian Government had asserted that ATS 22 000 million, equivalent to some 0.9% of gross national product, would be due for repay- ment for the years 1995 to 1998.

'(1) The taxable person may apply for the repayment of credits (Paragraph 162(2)). Repayment may also take place of the authority's own motion.

13. The concept of Anlaßfallwirkung relates to the fact that in Austria a law which is declared unconstitutional by the Verfassungsgerichtshof is not immediately (2) Liabilities to duty whose amount has or retroactively annulled but remains in been determined, and which the tax- force (for a maximum period laid down by able person will have to pay not later that court) pending the enactment of new than three months from the making of rules. Essentially, only those who brought the application for repayment, may be proceedings to challenge it (the proceedings set off against the amount of repay- giving rise to the declaration of uncon- ment.' stitutionality - the Anlaßfall - or other proceedings having the same object and pending before the same court at the time of judgment) may benefit directly and immediately from the finding of uncon- stitutionality, unless the Verfassungsger- 12. On 2 March 2000, the following sub- ichtshof decides otherwise. paragraphs were added by Article I of amending Law 9/2000:

'(3) No entitlement to repayment exists where the economic burden of the duty has been borne by someone other than 14. Subsequently, on 20 February 2001, the taxable person. Where a duty the phrase 'nor does the reduction of the which has thus been passed on has determination of duty by self-assessment or not yet been paid, the tax authority an assessment decision result in a credit in must require payment by a separate this respect' was added to the end of the decision. first sentence of subparagraph 3. I - 11370

15. Article II of the amending Law stated: 18. The draft Law was given a first reading in the regional legislature on 16 December 1999, when it was strongly criticised by several opposition members who described it as an attempt to circumvent Community law and in itself undoubtedly contrary to that law. The retroactive effect was also criticised, as was the absence of any clear 'Article I is applicable also to tax liabilities statement that the burden of proof must lie which arose before promulgation of this with the authorities since, inter alia, the Law.' burden of the tax could not be presumed to have been passed on to customers, and traders could not have been expected to provide themselves with evidence that in fact it had not. It was further asserted that the lawfulness of the tax had been ques- tioned as from Austria's joining the Euro- pean Union in 1995. 16. The explanatory memorandum to the draft amending Law presented to the Vienna regional legislature for adoption referred to Advocate General Saggio's Opinion in EKW and pointed out that, if the Court were to follow his view, refunds amounting to some ATS 3 800 million might be claimed in Vienna. Consideration of that possibility had drawn attention to the fact, of general relevance, that the tax code as then worded could allow the unjust enrichment of a taxpayer who had incor- porated the amount of an indirect tax in the price of his supplies, by allowing him to recover that amount when the burden of it 19. One week after the final adoption of had in fact been borne by consumers. The the amendment to the Vienna tax code, the proposed Article I was intended to deal Court of Justice gave judgment in EKW. As with that general problem, and not specifi- stated above, it found a tax such as that in cally with the possibility that very large issue to be incompatible with Article 3(2) sums of beverage tax might have to be of the excise duty directive, but limited the reimbursed. retrospective effect of the ruling to claims - legal proceedings or 'equivalent adminis- trative claims' - raised before the date of the judgment. That limitation was based, according to paragraph 58 of the judgment, on the facts that (i) Article 3(2) had not previously been interpreted by the Court and (ii) the Commission's conduct might 17. The explanatory memorandum made have led the Austrian Government reason- no mention of the retroactive effect pro- ably to believe that the tax was in conform- posed in Article II. ity with Community law.

20. It appears that a large number of claims 22. The Verwaltungsgerichtshof has had in fact been raised, in one form or decided to stay the proceedings in those another, before the date of the judgment in appeals and seek a preliminary ruling on EKW (when the Court had been informed the following question: of a total which might have to be reim- bursed if all claims were to succeed, but not of the number of claims estimated to have been brought already). In its observations in the present case, the Austrian Govern- ment states that 16 000 such claims, representing some ATS 3 000 million, are pending for Vienna alone, and suggests that their number is due at least in part to the 'Do Article 10 EC (formerly Article 5 of the fact that the Verwaltungsgerichtshof has EC Treaty) and point 3 of the operative decided that the concept of 'equivalent part of [the EKW judgment], according to administrative claims', used by the Court which Article 3(2) of Directive 92/12/EEC in the EKW judgment, must be given a may not be relied on in support of claims broad interpretation. relating to a tax such as the duty on alcoholic beverages paid or chargeable prior to the date of that judgment, except by claimants who before that date initiated legal proceedings or raised an equivalent administrative claim, preclude the appli- cation of the provision, created by the amendment to the Wiener Abgabenord- nung (Vienna Tax Code, WAO) of 2 March 2000, LGB1. No 9/2000, and applicable also to tax liabilities which arose before promulgation of that amendment, in Para- 21. At least some of those claims have been graph 185(3) of the WAO, under which refused by the tax authorities in Vienna, there is no claim to repayment where the and at least four of those refusals have been economic burden of the duty was borne by challenged on appeal before the Verwal- a person other than the taxable person?' 7 tungsgerichtshof. They concern two res- taurants, a Gasthaus and a wine merchant. It may be assumed that those four cases, which have given rise to the present request for a preliminary ruling, are test cases the result of which will determine the fate of a very large number of other claims not only in Vienna but throughout Austria. 6 It appears that the taxes in issue here were 23. Article 10 EC, to which the Verwal- initially self-assessed and paid, and that the tungsgerichtshof refers, requires Member claimants then withdrew their original States in particular to take all appropriate assessments and claimed reimbursement. measures to ensure fulfilment of the obli- gations arising out of the EC Treaty, to

28. However, in the absence of Community rules on such reimbursement, it is for the domestic legal system of each Member 25. As a preliminary point, I consider it State to lay down the detailed procedural appropriate to examine all the aspects of rules applicable, provided that they are not the disputed amendment referred to in the less favourable than those governing simi- national court's question, and not only the lar domestic situations (the principle of issue of retroactivity which is stressed both equivalence) and do not render the exercise in the question itself and in the Verwal- of the rights conferred by Community law tungsgerichtshof's reasoning. The question whether the substantive rule is compatible with Community law logically precedes - 8 — - Eor recent examples referring to earlier case-law, see Joined Cases C-397/98 and C>110/98 Mclallgescllschaf- and may affect the answer to - the question taiMlacchst |2001| LCR 1-1727, at paragraph 8*1 of the judgment, and Case C-62/00 Marks tuul Spencer |2002| whether its retroactive effect is compatible. ECR 1-632.5, at paragraph 30.

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in practice impossible or excessively dif- those taxes were found to be contrary to ficult (the principle of effectiveness). 9 national law.

31. Nor do I consider the circumstances of the adoption of the amendment to be of The principle of equivalence decisive importance in themselves. Whilst it is clear that the imminent likelihood of a judgment of the Court of Justice finding the beverage tax to be incompatible with Community law was an important factor in the genesis and timing of the amend- 29. National rules on actions for the ment, that does not mean that it applies or recovery of charges which are found to be was intended to apply solely to claims for incompatible with Community law may reimbursement of that tax or in general of not be less favourable than those governing taxes levied contrary to Community law. similar domestic actions, nor may such a charge be specifically targeted by more restrictive rules adopted following such a finding of incompatibility. 10

36. In that light, the Commission originally considered that the rules governing reim- bursement of taxes found incompatible with national law were not more favour- able than in the case of taxes incompatible 34. In the present case, Beta Leasing points with Community law. At the hearing how- out that the amendment in issue excludes ever it changed its view and argued that from its scope claimants 'who are entitled there was a difference in treatment favour- to benefit from Anlaßfallwirkung in respect ing those who claimed reimbursement of a of a tax provision which has been held by tax found to be unlawful by the Verf- the Verfassungsgerichtshof to be unlawful', assungsgerichtshof; in such cases alone, but that there is no equivalent exclusion as where the claimant could benefit from regards findings of illegality by other Anlaßfallwirkung, the possibility of unjust national courts following a ruling of the enrichment was no longer examined. Court of Justice. Thus, it contends, if the Verfassungsgerichtshof had held the bever- age tax to be unlawful and had limited its judgment in the same way, the amendment could not have had any effect. 37. This aspect has not been discussed before the Court in great detail, and it- would not be appropriate to express a definitive view which should be based on a full appreciation of national circumstances. However, the contested amendment appears to mean that the rule precluding reimbursement where the burden of the tax has been passed on applies to all categories of claimant but one: those who have 35. The Commission explains that, since brought proceedings before the Verf- the effects of a finding that a tax is contrary assungsgerichtshof challenging a tax- to national constitutional law extend only declared unconstitutional by that court. to a limited number of parties, 13 problems of massive repayment such as those referred to in the present case cannot arise. There had thus previously been no serious need for any rule precluding unjust enrichment 38. If it is the case that entitlement to benefit from Anlaßfallwirkung is confined 12 — - See, for example. Case C-312/93 Peterbraeck [1995] to those bringing challenges under national ECR I-4599, paragraph 13 of the judgment; and most constitutional law, then the rules governing recently Case C-327/00 Santex, judgment of 27 February 2003, paragraphs 56 and 57. reimbursement of taxes found incompatible 13 — - See paragraph 13 above. with national law might be more favour-

14 — - See, for example, Peterbroeck, cited above in note 12, paragraph 12 of the judgment, and the case-law cited there; more recently, Case C-390/98 Banks [2001] ECR 41. As the Court has consistently expressed I-6117, paragraph 121. the principle, it is for the courts or tribunals 15 — - See note 12 above. of the Member States, pursuant to the 16 See, for example, Case 199/82 San Giorgio [1983] ECR 3595, paragraph 14 of the judgment; Dilexport, cited in principle of cooperation laid down by note 10, paragraph 54; Joined Cases C-441/98 and C-442/98 Kapniki Mikhailidis [2000] ECR I-7145, para- Article 10 EC, to ensure the legal protec- graph 36 et seq.

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certain procedural time-limits, particularly the same circumstances the burden has where they are applied retroactively. 17 1 been passed on in part, only the amount shall deal with those aspects below. not passed on must be reimbursed. 19 A trader who has paid a tax but has in fact passed on the whole burden of it to his customers, without himself suffering any concomitant loss, will clearly be unjustly 44. First, however, it is necessary to con- enriched if he then obtains reimbursement sider the concept of unjust enrichment of that tax because it is found to have been itself. unlawful. 20 A national rule precluding unjust enrichment in those circumstances is thus compatible with Community law.

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sales. And he may even choose to absorb stances in which a right to reimbursement part of the tax himself yet still find a drop is required under Community law. in sales. In all such cases - which are plausible in a situation of keen competition between traders - he will have suffered an economic loss as a result of the imposition of an unlawful tax, so that it cannot be said either that he has passed on (all) the burden of that tax to third parties or that he would be unjustly enriched if (an appropriate 51. The disputed amendment to the Vienna proportion of) the tax were reimbursed to tax code precludes repayment 'where the him. 22 economic burden of the duty has been borne by someone other than the taxable person'. The substance of that rule thus would not appear to affect any traders other than those who would indeed be unjustly enriched by reimbursement, pro- vided that the concept of 'bearing the economic burden' of a tax includes all suffering of economic loss as a result of being liable to pay it, whether the amount of the tax itself is billed to a third party or 49. Community law thus does not allow a not, and provided that the rule is inter- Member State to resist claims for reim- preted so that any sharing of the economic bursement simply where the burden of a burden is taken into account and pro rata tax has been passed on; it must also be reimbursement may be obtained where established that unjust enrichment would appropriate. Subject to those provisos, the ensue. 23 substantive rule thus appears to respect the principle of effectiveness.

56. The claimant Karl Schlosser contends however that under Austrian law, since a claim for reimbursement involves a request for treatment benefiting the claimant and 54. It is clear from the case-law 24 that a verification that the statutory conditions rule requiring the claimant to prove that he for according that beneficial treatment are has not passed on the tax to a third party, met, the claimant is under a duty to assist in or a presumption that the tax has been establishing the relevant facts. In particular passed on, does not comply with Commu- he must provide documentation to support nity law. Any rule imposing special limi- the calculations involved. In the present tations on the form of evidence which may cases, the Abgabenberufungskommission be adduced also fails to comply. reached its decision by concluding, from the uncontested fact that the price charged to customers for alcoholic beverages was inclusive of beverage tax, that the economic burden of the tax had been borne by consumers. That amounts to a presumption whereby reimbursement is rendered impossible or at least excessively difficult. 55. According to the order for reference, the relevant tax code does not contain any special rules on the burden of proof, the evidence admissible or the assessment of that evidence. The general procedural law applicable proceeds from the court's duty to ascertain the material circumstances ex officio. The taxable person must contribute to establishing the facts, but where proof 57. It is not for this Court to say which of cannot reasonably be expected the law is those differing views of the implementation satisfied with establishment of probability, in practice of rules of national law is and admits as evidence anything which is correct. However, in order for the national court to be certain that the disputed amendment complies with Community 24 — - For example, San Giorgio, paragraph 14 of the judgment; Dilexport, paragraph .54; Kapniki Mikhailidis, law as regards requirements of proof, it paragraph 36 et seq., all cited in note 16 must satisfy itself that the rules governing

60. In that context, it is in my view desir- able to clarify the case-law by pointing out Retroactive effect that, whilst Community law precludes any presumption of unjust enrichment to be refuted by the claimant, it does not pre- clude the possibility of drawing reasonable inferences from existing evidence. Without such a possibility, the balance might be 62. With regard to Community measures, tilted so far in favour of the claimant as to the Court has repeatedly held that the render the justified aim of preventing unjust principle of legal certainty precludes a

25 — - See paragraph 71 below. 26 — - See paragraph 42 above.

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measure from taking effect from a point in 65. The limitation of the temporal effect of time before its publication, but that it may the ruling in the EKW judgment does not exceptionally be otherwise where the pur- mean that whenever a person had raised a pose to be achieved so demands and where claim before the date of the judgment that the legitimate expectations of those con- claim must be free from any other restric- cerned are duly respected. 27 tion laid down by national law but rather that, in relation to the period specified, no other claims may be allowed to proceed. Nor is there is anything in the judgment which itself imposes or implies any general condition as to the date of enactment of any applicable national rules or which precludes any retroactive effect thereof.

63. In the context of national rules con- cerning the recovery of charges unduly levied, the Court has held that, where it has declared a charge to be contrary to Community law, the Member State in question is not precluded from adopting new conditions applying to its reimburse- ment, such as a shorter time-limit, provided 66. A national rule which does no more that the principles of equivalence and than preclude unjust enrichment is com- effectiveness are observed. 28 patible with Community law.

68. It is true that in other circumstances a ensure that they have specific evidence of retroactive effect may fall foul of the those facts than are those who do not. 32 principle of effectiveness: in Marks & Spencer 30 and Grundig Italiana, 31 for example (to cite only the most recent cases), the Court has indicated that a retroactive reduction of the period within which reimbursement may be claimed is incompatible with the principle of effec- tiveness if, in the absence of adequate transitional provisions, it deprives some individuals of their right to reimbursement 71. To compile and retain such evidence or allows them too short a period in which may be a cumbersome task in situations to assert that right. such as the present, so that a trader might feel justified in not carrying it out if there were no current or foreseeable need to do so in order to be able to obtain reimburse- ment of a tax which he considered to be clearly incompatible with Community law and the imposition of which he knew caused him a loss. In particular, retail price calculations may not have taken the 69. Here, by contrast, since Community amount of tax specifically and separately law does not require a right to reimburse- into account if the trader did not expect to ment at all where unjust enrichment would have to provide proof of his loss. ensue, the fact that, following a change to national law, a claim which might pre- viously have succeeded can on that ground no longer succeed has no impact on the effectiveness of a right conferred by Com- munity law.

A provision of national law which precludes any reimbursement of a tax found incompatible with Community law to a taxable person where the economic burden of the tax has been borne by a third party is not contrary to Community law, even if it applies to situations which arose before its enactment and to parties whose right to rely on the incompatibility of the tax was not excluded by a temporal limitation of the effects of the judgment of the Court of Justice from which the incompatibility is deduced, provided that it complies with the principles of equivalence (it must not be less favourable than the rules governing reimbursement in comparable purely domestic situations) and effectiveness (it must not render in practice impossible or excessively difficult the exercise of rights conferred by Community law).

In order to comply with the principle of effectiveness, the provision must not, in particular:

— render reimbursement in practice impossible or excessively difficult in respect of any part of the economic burden which has been borne by the taxable I - 11383

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person, either because he has not passed on the full amount of the tax or because he has otherwise suffered economic loss as a result of its imposition;

— entail, in practice, any presumption to the effect that the economic burden has been borne by a third party or any requirement that the claimant establish the contrary;