Adam Zalasinski's Presentation - Contribution of infringements

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Adam Zalasinski's Presentation - Contribution of infringements Powered By Docstoc
					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.




25 February 2010        IFA UK                    2
                   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

    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
    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
    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
    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
    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
    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)
    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)
    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)
    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
    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
    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
    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
    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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                   Thank you for your attention.

               adam.zalasinski@ec.europa.eu




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