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ECJ – C-245/19 & C-246/19 – Judgment – État du Grand-duché de Luxembourg – Right of appeal against a request for information in tax matters

On November 13, 2020, the ECJ issued his decision in the case C-245/19 & 246/19 related to the Right of appeal against a request for information in tax matters. Although this is not a VAT case, it can have severe impact on the Right of Taxpayers in case of VAT/Indirect Tax disputes in the European Union.

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Article in the EU VAT Directive

This is not a VAT case


Facts

By letter of 16 June 2017, the director of the direct tax department of Luxembourg ordered company B to provide him with certain information concerning Ms FC under the tax treaty between Luxembourg and Spain and under Directive 2011/16. There is no appeal against this order under Luxembourg law. Company B nevertheless appeals to the court. At first instance, the Luxembourg court dismissed the legal provision excluding appeals against the order and partially annulled the decision of 16 June. The Grand Duchy of Luxembourg is appealing against this decision to the Cour administrative (Supreme Administrative Court, Luxembourg). The latter decided to refer questions to the Court of Justice.

Consideration:

The Cour administrative specifies that the appeal was brought directly against the original decision taken in the requested State at the first stage of the information exchange procedure, namely the order of 16 June 2017, without waiting for an administrative sanction for non- compliance with the order in the second stage of the procedure. The Court of Justice has not yet had the opportunity to rule on the existence of an interference with the private life, within the meaning of Article 7 of the Charter, of the third-party owner as addressee of an order that falls within the framework of an exchange of information between Member States in implementation of Directive 2011/16, nor about an obligation for the Member States to provide for procedural safeguards resulting from State interference. In addition, the appeal of the Grand Duchy of Luxembourg raises the issue of the interpretation of the notion “information likely to be of importance for the administration and enforcement of the national law of the Member States” within the meaning of Article 1 (1) , of Directive 2011/16. The question is also to what extent, when interpreting this provision, account should be taken of the evolving nature of the interpretation of Article 26 of the OECD Model Tax Convention.


Questions

Must Articles 7, 8 and 52(1) of the Charter of Fundamental Rights of the European Union, whether or not read in conjunction with Article 47 of that Charter, be interpreted as precluding national legislation of a Member State which, in the context of the procedure for the exchange of information on request established in particular with a view to the implementation of Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC, 1 excludes any remedy, in particular a judicial remedy, on the part of a third party holding information to challenge a decision by which the competent authority of that Member State requires that third party to communicate information to it for the purposes of implementing a request for exchange of information received from another Member State?

If the answer to the first question is in the affirmative, must Article 1(1) and Article 5 of Directive 2011/16 be interpreted, if necessary taking account of the evolving nature of the interpretation of Article 26 of the OECD Model Tax Convention, as meaning that a request for exchange of information, and a consequent information order from the competent authority of the requested Member State, satisfy the condition that there is not a manifest lack of foreseeable relevance where the requesting Member State states the identity of the taxpayer concerned, the period covered by the investigation in the requesting Member State and the identity of the holder of the information in question, while seeking information concerning contracts and the associated invoices and payments which are unspecified but which are defined by criteria concerning, first, the fact that the contracts were concluded by the identified holder of the information, secondly, their applicability to the tax years covered by the investigation by the authorities in the requesting State and, thirdly, their relationship with the identified taxpayer concerned?


AG Opinion

 I therefore propose that the questions referred by the Cour administrative (Higher Administrative Court, Luxembourg) be answered as follows:

1.      Article 47 of the Charter of Fundamental Rights of the European Union must be interpreted as meaning that a decision by which an authority requested to provide assistance pursuant to Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/99/EEC requires a person to provide information concerning a taxpayer or third party may be challenged by that person, the taxpayer and third parties concerned before the courts of the requested Member State.

2.      Article 1(1) and Article 5 of Directive 2011/16 must be interpreted as meaning that the requesting authority must state the reasons for the request for information in order to enable the requested authority to assess whether the requested information is not manifestly lacking in foreseeable relevance to the tax assessment conducted by the requesting authority. The request must provide concrete evidence of the facts or transactions that are relevant for tax purposes, so as to rule out an impermissible ‘fishing expedition’.


Decision

Article 47 of the Charter of Fundamental Rights of the European Union, read in conjunction with Articles 7 and 8 and Article 52(1) thereof, must be interpreted as:

–    precluding legislation of a Member State implementing the procedure for the exchange of information on request established by Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC, as amended by Council Directive 2014/107/EU of 9 December 2014, which prevents a person holding information from bringing an action against a decision by which the competent authority of that Member State orders that person to provide it with that information, with a view to following up on a request for exchange of information made by the competent authority of another Member State, and as

–    not precluding such legislation from preventing the taxpayer concerned, in that other Member State, by the investigation giving rise to that request for exchange of information and the third parties concerned by the information in question from bringing actions against that decision.

Article 1(1) and Article 5 of Directive 2011/16, as amended by Directive 2014/107, must be interpreted as meaning that a decision by which the competent authority of a Member State orders a person holding information to provide it with that information, with a view to following up on a request for exchange of information made by the competent authority of another Member State, is to be considered, taken together with that request, as concerning information which is not manifestly devoid of any foreseeable relevance where it states the identity of the person holding the information in question, that of the taxpayer concerned by the investigation giving rise to the request for exchange of information, and the period covered by that investigation, and where it relates to contracts, invoices and payments which, although not specifically identified, are defined by criteria relating, first, to the fact that they were concluded or carried out by the person holding the information, secondly, to the fact that they took place during the period covered by that investigation and, thirdly, to their connection with the taxpayer concerned.


 

Source


Similar ECJ cases

  • Berlioz Investment Fund, C-682/15
  • N Luxembourg e.a. (C-115/16, C-118/16, C-119/16 and C-299/16)

 

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