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Tax & Financial Standards New Judgments of the ECJ For March 2019

01.04.2019

Tax & Financial Standards New Judgments of the ECJ For March 2019

С-437/17 of 13 March 2019

Social law — Free movement of workers — Prohibition of discrimination on grounds of nationality — Right to paid annual leave based on the seniority of the worker with the employer — Account taken only in part of previous periods of service completed with other employers — Disparity between the schemes and legislation of the Member States

Key aspects of the decision in the economic range:

Principle of free movement of workers.

Right to paid annual leave.

Difference in treatment between workers based on their seniority with their current employer.

National legislation granting an additional week of paid annual leave to workers with 25 years of service with the same employer.

Proceedings concerning the conditions for the grant of sixth week of paid annual leave.

С-647/17 of 13 March 2019

Value added tax - Supply of services in respect of admission to educational events - Place of taxable transactions - General rule for determining the place where services are deemed to be supplied for tax purposes - Concept of "services in respect of admission to events"

Key aspects of the decision in the economic range:

Place of taxable transactions.

Services offered to taxable persons. Supply of services in respect of admission to educational events. Seminar taking place in a Member State where neither supplier nor participants are established. Seminar requiring advance registration and payment.

Concept of "services in respect of admission to events".

Proceedings concerning a tax ruling by the Revenue Law Commission relating to the collection, in Sweden, of value added tax on the provision of accounting and management courses lasting five days in another Member State from taxable persons who have established their business or have a fixed establishment in Sweden.

С-118/17 of 14 March 2019

Consumer protection - Unfair terms in consumer contracts — Loan contract denominated in a foreign currency — Exchange difference — Substitution of a legislative provision for an unfair term declared void — Continued existence of the contract after the unfair term has been deleted — National system for a uniform interpretation of law

Key aspects of the decision in the economic range:

An application for the cancellation of a loan contract on the basis of the unfair nature of a term relating to exchange rate risk where it is found that that term is unfair and that the contract cannot continue to exist without that term.

Unfair terms which are declared invalid.

National legislation curing the invalidity by amending the content of the contracts at issue.

Possibility for the Supreme Court of the Member State concerned to adopt decisions aimed at unifying case-law.

Proceedings concerning the allegedly unfair contractual term providing that the exchange rate applicable at the time of the advance of a loan denominated in a foreign currency is based on the buying rate practiced by the bank whereas the exchange rate applicable at the time it is paid off is based on the selling rate.

С-449/17 of 14 March 2019

Common system of value added tax — Exemption for certain activities in the public interest — Driving school tuition provided by a driving school — Concept of "school or university education"

Key aspects of the decision in the economic range:

Tax exemption for driving tuition.

Concepts of school or university education, organisations whose objects are recognised as similar, and tuition given privately by teachers.

Inclusion within those concepts of driving school tuition for the acquisition of category B and category C1 driving licences.

Proceedings between A and the tax office concerning the refusal by the tax office to exempt from value added tax services relating to motor vehicle driving tuition provided by A.

С-695/17 of 14 March 2019

Mutual assistance for the recovery of claims relating to taxes, duties and other measures - Enforced recovery, by the authorities of the requested Member State, of claims of the applicant Member State - Procedure relating to an application seeking the restitution of those claims to the insolvency estate of a company established in the requested Member State - Defendant in those proceedings

Key aspects of the decision in the economic range:

Proceedings seeking the restitution, into the insolvency estate of a company established in the requested Member State, of claims which were recovered at the request of the applicant Member State, where those proceedings are based on a dispute concerning the enforcement measure. Procedure of forced recovery. Disputes concerning enforcement measures taken in the requested Member State.

Determination of the defendant.

Proceedings concerning an application from the administrator of a company’s insolvency estate seeking the restitution to the insolvency estate of claims recovered by the Finnish authorities at the request of the Estonian authorities.

С-724/17 of 14 March 2019

Competition - Compensation for the damage caused by a cartel prohibited by Article 101 TFEU - Determination of the undertakings liable to provide compensation - Succession of legal entities - Economic continuity test - Concept of ‘undertaking’

Key aspects of the decision in the economic range:

Private enforcement of competition law.

Private liability. Action for damages. Compensation for harm caused by conduct contrary to EU competition law.

Persons liable to pay compensation.

Principle of economic continuity.

Concept of ‘undertaking’.

Proceedings concerning compensation for damage resulting from a cartel in the market.

С-245/18 of 21 March 2019

Payment services in the internal market — Payment order by credit transfer — Incorrect unique identifier provided by the payer — Execution of the payment transaction on the basis of the unique identifier — Liability of the payee’s payment service provider — Concept of "payment transaction"

Key aspects of the decision in the economic range:

Payment service provider’s obligations and the limitations of such a provider’s liability.

Correct execution of the payment transaction in accordance with the payment order of the payment service user.

Payment order in accordance with the unique identifier provided by the payment service user, which does not correspond to the payee name indicated by that user.

Concept of "payment transaction".

Proceedings concerning the payment of a sum of money to the incorrect payee on account of an incorrect unique identifier provided by the payer.

С-590/17 of 21 March 2019

Consumer protection - Finance for the purchase of a home - Mortgage loan granted by an employer to its employee and to his spouse, the jointly and severally liable co-borrower - Concepts of ‘consumer’ and of ‘seller or supplier’

Key aspects of the decision in the economic range:

Unfair terms in consumer contracts concluded between a seller or supplier and a consumer.

Loan agreement concluded between an employer and an employee and his spouse for the purchase of their home. Term providing for automatic termination of the loan contract where the borrower ceased to be a member of the staff.

Concepts of ‘consumer’ and of ‘seller or supplier’.

Proceedings concerning a request for payment of outstanding sums owed in the context of a mortgage loan granted by a company.

С-70/17 of 26 March 2019

Consumer protection — Accelerated repayment clause of a mortgage loan contract — Declaration that the clause is unfair in part — Powers of the national court when dealing with a term regarded as ‘unfair’ — Replacement of the unfair term with a provision of national law

Key aspects of the decision in the economic range:

Unfair terms in consumer contracts.

A situation where a mortgage loan contract concluded between a seller or supplier and a consumer is not capable of continuing in existence following the removal of an unfair term whose wording is based on a provision of legislation which is applicable where the parties to the contract so agree.

Powers of the national court.

Subsidiary application of a national law.

In Case C?70/17 - proceedings concerning the conclusions to be drawn from the finding that the accelerated repayment clause set out in Clause 6a of the loan agreement secured by a mortgage concluded between those two parties is unfair.

In Case C?179/17 - proceedings concerning the application for mortgage enforcement pending before the referring court concerning property mortgaged to guarantee payment of a loan.

February

С-115/16 of 26 February 2019

Common system of taxation applicable to interest and royalty payments made between associated companies of different Member States — Beneficial owner of the interest and royalties — Company established in a Member State and paying to an associated company established in another Member State interest all or almost all of which is then transferred outside the European Union — Subsidiary subject to an obligation to withhold tax on the interest at source — Concept of "beneficial owner"

Key aspects of the decision in the economic range:

Directive 2003/49/EC on interest and royalty payments.

Abuse of possible fiscal arrangements.

Existence of a legal basis enabling a Member State to refuse, on account of the commission of an abuse of rights, to grant the exemption from any taxes to a company that has paid interest to an entity established in another Member State.

Criteria for abuse through avoidance of tax at source.

Abuse by taking advantage of a lack of cross-border information.

Acting in one’s own name on behalf of a third party.

Effect of the commentaries on the OECD Model Tax Convention on the interpretation of an EU Directive.

Concept of "beneficial owner".

Proceedings relating to the obligation imposed on companies to pay withholding tax by reason of the payment by them of interest to non-resident companies regarded by the tax authority as not being the beneficial owners of that interest and, accordingly, as incapable of being entitled to the exemption from any taxes that is provided for by Directive 2003/49.

С-116/16 of 26 February 2019

Common system of taxation applicable in the case of parent companies and subsidiaries of different Member States - OECD Model Tax Convention - Exemption of the profits distributed by companies of a Member State to companies of other Member States - Beneficial owner of the distributed profits - Company established in a Member State and paying to an associated company established in another Member State dividends all or almost all of which are then transferred outside the European Union

Key aspects of the decision in the economic range:

Parent-Subsidiary Directive 90/435/EEC.

Effect of the commentaries on the OECD Model Tax Convention on the interpretation of an EU Directive. Direct application of a non-transposed provision of a directive. Interpretation of national provisions for the prevention of abuse in conformity with EU law.

Need for a beneficial owner of dividend payments.

Abuse of possible tax arrangements. Criteria for abuse through avoidance of withholding tax. Subsidiary subject to an obligation to withhold tax on the profits at source.

Proceedings relating to the obligation imposed on companies to pay withholding tax by reason of the payment by them of dividends to non-resident companies regarded by the tax authority as not being the beneficial owners of those dividends and, accordingly, as incapable of being entitled to the exemption from withholding tax provided for by Directive 90/435.

С-135/17 of 26 February 2019

Free movement of capital — Movement of capital between Member States and third countries — Income of a company established in a third country derived from the holding of debts owed by a company established in a Member State — Incorporation of that income into the tax base of a taxable person resident for tax purposes in a Member State — Income from the passive activity of a company established in a third country

Key aspects of the decision in the economic range:

Restriction on the free movement of capital.

Direct investment.

Prevention of wholly artificial arrangements.

Income, taxed in third country, at a lower rate than the rate prevailing in the Member State.

A legislation, under which income obtained by a company established in a third country that does not come from an activity of that company pursued on its own account, is incorporated, pro rata to the amount of the shareholding, in the tax base of a taxable person residing in that Member State.

Proceedings between X, a company incorporated under German law, and the Stuttgart Tax Office, Germany, regarding the incorporation of the income obtained by Y, a company incorporated under Swiss law which is 30% owned by X, into the latter’s tax base.

С-278/18 of 28 February 2019

Value added tax – Exemption - Leasing or letting of immovable property - Contract for the transfer of the use of land comprising vineyards for agricultural purposes

Key aspects of the decision in the economic range:

Exemption from VAT on the leasing or letting of immovable property.

Contract for the transfer of the use of land comprising vineyards for agricultural purposes to a company engaged in viticulture, entered into for a period of one year, automatically renewable and under which rent is paid at the end of each year.

Proceedings with regard to value added tax and relating to a contract for the transfer of the use of land comprising vineyards for agricultural purposes.

С-567/17 of 28 February 2019

Excise duty - Exemptions - Products not for human consumption - Assessment criteria - Ethyl alcohol that has been denatured in accordance with the requirements of a Member State and is contained in cosmetics which, although not intended, as such, for human consumption, are nevertheless consumed as alcoholic beverages

Key aspects of the decision in the economic range:

Excise duty. Power of the receiving State to withdraw the exemption granted in another Member State. Serious risk of evasion, avoidance or abuse. Procedure for withdrawing the exemption.

Products not for human consumption. Formal intended use of products. Actual use.

Proceedings concerning the taxation of ethyl alcohol contained in cosmetics and personal care products.

 


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