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31.03.2023

Tax & Financial Standards New Judgments of the ECJ For March 2023

Tax & Financial Standards New Judgments of the ECJ For March 2023

Tax&Financial Standards (T&FSt) – International Financial Reporting Standards, Date or entry into force: 1.01.2023 (consolidated version), in 4 languages - Bulgarian, English, German and French

New judgments

Freedom to provide services – Free movement of capitals - National measure obliging a credit institution to terminate business relationships or to no longer establish such relationships with persons who are not nationals of the respective country – Restrictions - Prevention of the use of the financial system for the purpose of money laundering and terrorist financing – Proportionality - Concept of ‘movement of capital’“ and „restriction“

Key aspects of the decision in the economic range:

Deficiencies in the risk management system of a credit institution. Financial loans and credits, as well as operations with current and deposit accounts in financial institutions, and in particular credit institutions, represent capital movements. An administrative measure by which the competent authority of a Member State, on the one hand, prohibits a credit institution from establishing business relationships with natural or legal persons who have no connection with the Member State and whose monthly credit turnover exceeds a certain amount, and, on the other hand, obliges the institution.

Proceedings concerning the legality of the sanction and the administrative measures imposed in order to prevent the risk that this credit institution is involved in money laundering and terrorist financing.

Social policy — Organisation of working time — Daily and weekly rest — National legislation providing for a minimum weekly rest period of 42 hours — Obligation to grant daily rest — Rules for granting — Concept of „weekly rest“

Key aspects of the decision in the economic range:

Protection of the safety and health of workers. Right to limitation of maximum working hours and to daily and weekly rest periods. Daily and weekly rest. Method of calculation and arrangements for granting. Where a worker is granted a weekly rest period, he or she is also entitled to a daily rest period preceding that weekly rest period.

Concept of „weekly rest“.

Proceedings, concerning the granting of daily rest periods when weekly rest periods are granted.

Common system of value added tax  — Exemptions for intra-community transactions — Time limit for the submission of evidence — Principles of tax neutrality, effectiveness and proportionality

Key aspects of the decision in the economic range:

National legislation which prohibits the production and gathering of new evidence which establishes that the substantive conditions are satisfied, during the administrative procedure which resulted in the adoption of the tax assessment notice, in particular after the tax inspection stage but before the adoption of that decision, provided that the principles of equivalence and effectiveness have been complied with.

Proceedings, concerning an adjustment of value added tax (VAT).

Exemption from VAT – Exemption of insurance and reinsurance transactions – Exemption of supplies of goods used solely for an exempt activity – Concept of ‘insurance transactions’ – Resale of parts from written-off motor vehicles purchased from insured persons – Principle of fiscal neutrality – Concepts of ‘insurance transactions’ and ‘services related to insurance and reinsurance transactions performed by insurance brokers and insurance agents’

Key aspects of the decision in the economic range:

Transactions consisting of the sale by an insurance undertaking to third parties of parts from written-off motor vehicles that have been involved in accidents covered by that undertaking, which it has purchased from the persons whom it insures, do not fall within the scope of Article 135(1)(a) of the VAT Directive. The principle of fiscal neutrality must be interpreted as not precluding the refusal to exempt transactions consisting of the sale by an insurance undertaking to third parties of parts from written-off motor vehicles that have been involved in accidents covered by that undertaking, which it has purchased from the persons whom it insures, where those purchases did not give rise to deductibility.

Concepts of ‘insurance transactions’ and ‘services related to insurance and reinsurance transactions performed by insurance brokers and insurance agents’.

Proceedings between an insurance undertaking, and the Tax Authority concerning the taxable or exempt nature, for the purposes of value added tax, of transactions carried out by that undertaking for the resale of parts of written-off vehicles.

Jurisdiction over consumer contracts — Conduct of the person claiming the status of consumer that may give rise to the impression, on the part of the other contracting party, that he or she is acting for professional purposes — Concept of ‘consumer’

Key aspects of the decision in the economic range:

In order to determine whether a person may be classified as a ‘consumer’, account must be taken of the current and future purposes of the conclusion of that contract, irrespective of the nature of the activity pursued by that person as an employed or self-employed person. Where it proves impossible to determine to the requisite legal standard, in the context of the overall assessment of the information that is available to a national court, certain circumstances surrounding the conclusion of a contract, as regards, in particular, the information in that contract or the involvement of an intermediary at the time of its conclusion, that court must assess the probative value of the information available to it.

Concept of ‘consumer’.

Proceedings between an Austrian national and a German company, concerning the jurisdiction of the Austrian courts to rule on a claim for compensation for hidden defects present in a motor vehicle that is the subject of a contract of sale.

Value added tax — Supply, before first occupation, of a building or parts of a building and of the land on which the building stands — No provisions in national law providing for detailed rules for applying the criterion relating to first occupation — Exemptions — Supply, after conversion, of a building which was the subject of a first occupation before the conversion — National administrative legal commentary treating buildings which have undergone substantial conversions in the same way as new buildings — Concept of „conversion of a building“

Key aspects of the decision in the economic range:

The exemption provided for by Article 135(1)(j) of the VAT Directive for the supply of a building or a part of a building, and of the land on which the building stands, other than those which are supplied before their first occupation, also applies to the supply of a building which was first occupied before its conversion, even if the Member State concerned has not laid down, in national law, the detailed rules for applying the criterion of first occupation to conversions of buildings.

Concept of „conversion of a building“.

Proceedings concerning the amount of value added tax payable by a company in respect of the conversion of a former school into apartments and offices.

Union Customs Code – Legal remedies – Smuggled goods – Goods belonging to a third party seized in the course of administrative-offence proceedings – National legislation excluding that third party from the category of persons entitled to bring an action against the administrative penalty notice ordering the seizure

Key aspects of the decision in the economic range:

National legislation which does not provide for a right of appeal against an administrative penalty notice for a person whose assets have been seized on the basis of such a notice but who is not regarded, in that notice, as the person who committed the administrative offence connected with the penalty imposed.

Framework Decision 2005/212 on Confiscation of Crime-Related Proceeds, Instrumentalities and Property is not materially applicable in a situation in which the act committed does not constitute a criminal offence.

Proceedings between JP, a company governed by Bulgarian law, and the Department of Customs Intelligence and Investigations of the Customs Regional Directorate, Bulgaria concerning the decision adopted by the latter to seize, for the benefit of the Bulgarian State, a transport vehicle belonging to JP which had been used to smuggle goods.

Unfair terms in consumer contracts — Effects of a declaration that a term is unfair — Mortgage loan agreement indexed to a foreign currency — Continued existence of the contract without unfair terms — Consumer’s wish to have the contract declared invalid — Powers and obligations of the national court

Key aspects of the decision in the economic range:

In the event that a contract concluded between a consumer and a seller or supplier is declared invalid because one of its terms is unfair, it is for the Member States, by means of their national law, to make provision for the effects of that invalidation, in compliance with the protection granted to the consumer by a directive, in particular, by ensuring the restoration of the legal and factual situation that he or she would have been in if that unfair term had not existed. It is for the national court, taking account of its domestic law as a whole, to take all the measures necessary to protect the consumer from the particularly unfavourable consequences which annulment of the contract might entail for him or her.

Proceedings, concerning the consequences of the invalidation of a mortgage loan agreement.

Payment services in the internal market – Information for the payer after receipt of the payment order – Payment service provider’s liability for unauthorised transactions – Obligation of that service provider to refund unauthorised transactions to the payer – Obligation of that service provider to provide that payer with information relating to the payee concerned - Concept of ‘payee’

Key aspects of the decision in the economic range:

Single payment transactions. Provision of information relating to the payee. A payer’s payment service provider is required to provide that payer with information enabling the natural or legal person who benefited from a payment transaction debited from that payer’s account to be identified and not only the information which that provider, after making its best efforts, has available with regard to that payment.

Concept of ‘payee’.

Proceedings between Z and a banking institution, with which the applicant holds a bank account, concerning two payment transactions carried out using that applicant’s debit card, which the latter considers to be unauthorised transactions.

Pollutant emissions – Reduction in nitrogen oxide (NOx) emissions limited by a ‘temperature window’ – Protection of the interests of an individual purchaser of a vehicle equipped with an unlawful defeat device – Right to compensation from the vehicle manufacturer on the basis of tortious liability – Method of calculating compensation – Principle of effectiveness

Key aspects of the decision in the economic range:

Approval of motor vehicles. Regulation (EC) No 715/2007 on type approval of motor vehicles with respect to emissions from light passenger and commercial vehicles protects, in addition to public interests, the specific interests of the individual purchaser of a motor vehicle vis-à-vis the manufacturer of that vehicle where that vehicle is equipped with a prohibited defeat device, within the meaning of the latter provision. It is for the law of the Member State concerned to determine the rules concerning compensation for damage actually caused to the purchaser of a vehicle equipped with a prohibited defeat device.

Proceedings between QB and a car manufacturer, concerning the right to compensation invoked by QB and the calculation of the amount of damages he may be owed on account of his purchase of a diesel vehicle equipped with software which reduces the recirculation of pollutant gases of that vehicle depending on the outside temperature and which does not comply with the requirements of EU law.

Termination of the agency contract — Entitlement of the commercial agent to an indemnity — Equitable indemnity — Commission on future transactions — New customers brought by the commercial agent — Existing customers with whom the commercial agent has significantly increased the volume of business — One-off commission payments — Concept of ‘commission lost by the commercial agent’

Key aspects of the decision in the economic range:

Self-employed commercial agents. The commission which the commercial agent would have received in the event of a hypothetical continuation of the agency contract, in respect of transactions which would have been concluded after the termination of that agency contract with new customers which he or she brought to the principal before that termination, or with customers with which he or she significantly increased the volume of business before that termination, must be taken into account in determining the indemnity.

Concept of ‘commission lost by the commercial agent’.

Proceedings, concerning a claim for compensation for the termination of the commercial agency contract between a commercial agent and a company.