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The European Commission and EU tax litigation. Dr Adam Zalasiński. Disclaimer. The views are personal to the author and do not purport to represent the views of the European Commission. . Structure. The Commission and infringements procedure The Commission and preliminary rulings

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Presentation Transcript
disclaimer
Disclaimer

The views are personal to the author and do not purport to represent the views of the European Commission.

IFA UK

structure
Structure
  • The Commission and infringements procedure
  • The Commission and preliminary rulings
  • The effects of EU tax litigation on the law making process in the Member States

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types of proceedings in which the commission is involved
Types of proceedings in which the Commission is involved
  • Contentious procedure
    • Infringements actions under Art. 258 TFEU
      • As the applicant – it brings MSs to the Court
  • Non-contentious procedure
    • Preliminary rulings under Art. 267 TFEU
      • As ‘amicus curiae’ – it submits written observations and appears in hearings

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infringements procedure an outline
Infringements procedure – an outline
  • Stages
    • Informal stage (pre-258 letter or EU-Pilot inquiry)
    • Administrative stage
      • Letter of formal notice
      • Reasoned opinion
    • Judicial stage - referral to the ECJ

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infringements procedure legal nature
Infringements procedure – legal nature
  • Objective nature of the infringement procedure:
    • It concerns ‘an objective finding of a failure to fulfil obligations and not on a proof of any criteria or opposition on the part of the Member States concerned’ (Case 301/81, Com v. Belgium)
    • It makes an objective assessment of the legality of the MS’s behaviour (no guilt/intention issue)

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infringements procedure from a technical point of view
Infringements procedure from a technical point of view
  • It concerns:
    • Comparison of the MS’s legislation and its application, with EU requirements
    • Discussion of the outcome of such a test with the MS concerned (administrative stage)
    • Referral to the ECJ in case of divergent views and lack of consensus between the MS and the Commission

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preliminary ruling an outline
Preliminary ruling – an outline
  • Interpretation of EU law
    • Primary and secondary
      • Courts of last instance – obliged to refer a question
      • Courts of lower instances – entitled to refer a question
  • Validity of Community acts
    • Secondary law and decisions in individual cases (all domestic courts obliged to refer a question if they have doubts as to validity)

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european commission in preliminary rulings
European Commission in preliminary rulings
  • The European Commission
    • As ‘amicus curiae’, sends written observations and provides the ECJ with ‘authoritative’ opinion on the matter referred by a domestic court,
    • Appears in the hearings and responds to written observations of other participants.

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how does the commission identify eu requirements 1 3
How does the Commission identify EU requirements? (1/3)
  • Sources of information allowing the Commission to determine EU requirements:
    • In case implementation of directives (so-called positive integration):
      • Pre-adoption discussions with MS (WP IV, Fiscal Questions Group in the Council) and Commission’s own analysis
    • In cases of infringements/interpretation of the TFEU (so-called negative integration)
      • Commission’s own analysis and earlier case-law of the ECJ

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how does the commission identify eu requirements 2 3
How does the Commission identify EU requirements?(2/3)
  • ECJ’s decisions are interpreted as establishing precedents despite
    • The lack of stare decisis principle – no obligation for the Court to follow its earlier decisions, BUT:
      • General principle of equality
      • Doctrine of Acte éclairé
  • The Commission looks for general norms stemming from the judgments,
  • The Commission applies them to other cases unless there are circumstances which allow it to distinguish the cases

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how does the commission identify eu requirements 3 3
How does the Commission identify EU requirements?(3/3)
  • Problem of lack of clarity or insufficient clarity in ECJ’s case law:
    • Dividends (C-513/04, Kerckhaert-Morres),
    • Withholding taxes (C-282/07,Truck Center),
    • A-A measures (possible degrees of ‘artificiality’),
    • Cross-border losses (M&S, Lidl Belgium),
    • Are DTCs excluded from EU scrutiny (C-376/03, ‘D’)?

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the effects of infringements on the law making process in the member states
The effects of infringements on the law making process in the Member States
  • General rule:
    • The effects resemble the rule infringed
  • In cases of ‘positive integration’ we achieve common standards agreed in the Council
  • In cases of ‘negative integration’ we achieve elimination of discrimination/restriction on free movement

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the effects of preliminary rulings on domestic tax law
The effects of preliminary rulings on domestic tax law
  • Direct consequence:
    • Taxpayers’ rights are ensured within judicial control of tax administration’s decisions,
  • Indirect consequence:
    • National law maker should respond to the ECJ’s ruling if domestic law does not conform with the interpretation of EU law by the ECJ
      • If not – an infringement proceeding may be opened.

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the effects of eu litigation on the law making process in the member states
The effects of EU litigation on the law making process in the Member States
  • Empirical study (General Report for 2006 FIDE Congress)
    • MS frequently abolish more preferential domestic regimes instead of extending them to cross-border situations, or
    • Extend application of norms limiting taxpayers’ rights in cross-border situations to domestic cases

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conclusion
Conclusion
  • The Commission investigates the general rules stemming from the ECJ’s decisions
  • It promotes more universal application of these general rules in all MS (in infringements actions and preliminary rulings)
  • It seeks to secure their enforcement despite the lack of formal stare decisis obligation for the ECJ
  • The effects of litigation resemble the ratio legis of the rule infringed/interpreted – of limited use for developing new positive standards

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slide17
Thank you for your attention.

adam.zalasinski@ec.europa.eu

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