The ECJ released the preliminary ruling in the case C-158/25 (AEDT and État du Grand-Duché de Luxembourg.
Summary
- Facts of the Case: The case involves QJ, a manager held liable for unpaid VAT by his company, VN, for the years 2014 to 2016. The Luxembourg tax authority issued ex officio tax assessments to VN, which were not contested in time, leading to a guarantee call requiring QJ to pay the VAT due.
- Legal Framework: The case references Luxembourg’s VAT law, which holds managers personally and jointly liable for unpaid VAT if they fail to ensure compliance. It also involves EU law, specifically Article 47 of the Charter of Fundamental Rights, concerning the right to an effective remedy and fair trial.
- Issue at Stake: The central issue is whether QJ, as a manager, can challenge the validity of the ex officio tax assessments against VN, given that he was not personally notified and thus unable to contest them initially. This raises questions about his rights under EU law.
- Questions for Preliminary Ruling: The Court of Cassation seeks clarification from the Court of Justice on whether Article 47 of the Charter applies to national laws imposing joint liability on company directors for VAT and whether directors can indirectly challenge tax assessments they were not notified about.
- Court of Appeal’s Position: The Court of Appeal dismissed QJ’s appeal, stating that the Charter does not apply as the procedures in question are not derived from EU law. It held that QJ, not being the taxable person, was not entitled to notification or involvement in the ex officio taxation procedure.
Reference to the EU Law
Charter of Fundamental Rights of the European Union (‘the Charter’)
Article 47 of the Charter, entitled ‘Right to an effective remedy and to a fair trial’, provides:
- ‘Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article. Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. Everyone shall have the possibility of being advised, defended and represented. Legal aid shall be made available to those who lack sufficient resources in so far as such aid is necessary to ensure effective access to justice.’
Article 51 of the Charter, which is entitled ‘Field of application’, provides, in paragraph 1:
- ‘1. The provisions of this Charter are addressed to the institutions, bodies, offices and agencies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law. They shall therefore respect the rights, observe the principles and promote the application thereof in accordance with their respective powers and respecting the limits of the powers of the Union as conferred on it in the Treaties.’
Questions
- Does the Charter of Fundamental Rights of the European Union, and in particular Article 47 thereof, apply, in the light of the criteria in Article 51(1) of the Charter, to the regulation, by national legislation, of the joint and several liability of company directors, on account of the failure to discharge their obligations, for payment of the VAT owed by the company which they run?
- If the answer to the first question is in the affirmative, is Article 47 of the Charter to be interpreted as conferring on directors who are the subject of a guarantee call the ability to challenge, indirectly, in the context of an action available to them under national law against the administrative act establishing their joint and several liability, the ex officio VAT assessment previously issued to the company and to which the company did not file an objection in good time?
- If the answer to the second question is in the affirmative, is Article 47 of the Charter to be interpreted as limiting the grounds on which directors may rely in the context of an indirect challenge to the ex officio tax assessment issued to the taxable company or as encompassing all grounds, including those relating to the determination of the VAT liability, such as the findings of fact which led to the ex officio administrative tax decision issued against the taxable company, and purely personal grounds, such as possible infringements of fundamental rights committed in respect of those directors in the context of the ex officio tax procedure?
Reference to other ECJ Cases
- Adler Real Estate and Others (C-546/18): This case is specifically mentioned as it addresses the rights of individuals in relation to administrative acts and the ability to challenge decisions affecting them. It emphasizes the importance of personal notification and participation in proceedings for those impacted by administrative tax assessments.
- Åkerberg Fransson (C-617/10): The judgment in this case highlights the obligations of Member States to ensure the collection of VAT and to prevent evasion. It established that national procedural laws concerning VAT are part of the implementation of EU law, thereby activating the protections afforded by the Charter of Fundamental Rights, particularly Article 47.
Source
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