CJEU Case C-437/19 / Judgment

État du Grand-duché de Luxembourg v L.
Policy area
Taxation
Deciding body type
Court of Justice of the European Union
Deciding body
Court (Third Chamber)
Typ
Decision
Decision date
25/11/2021
ECLI (European case law identifier)
ECLI:EU:C:2021:953
  • CJEU Case C-437/19 / Judgment

    Key facts of the case:

    Request for a preliminary ruling from the Cour administrative (Luxembourg).
    Reference for a preliminary ruling – Administrative cooperation in the field of taxation – Directive 2011/16/EU – Article 1(1), Article 5 and Article 20(2) – Request for information – Decision ordering that information be provided – Refusal to comply with the order – Penalty – ‘Foreseeable relevance’ of the requested information – Absence of identification of the taxpayers concerned individually and by name – Concept of ‘identity of the person under examination or investigation’ – Statement of reasons of the request for information – Scope – Charter of Fundamental Rights of the European Union – Article 47 – Right to an effective remedy against the decision ordering that information be provided – Article 52(1) – Limitation – Respect for the essence of the right.

     

    Outcome of the case:

    On those grounds, the Court (Third Chamber) hereby rules:

    1. Article 1(1), Article 5 and Article 20(2) of Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC must be interpreted as meaning that a request for information must be regarded as relating to information which does not appear to be manifestly devoid of any foreseeable relevance, where the persons under examination or investigation within the meaning of that latter provision are not identified individually and by name by that request but the requesting authority provides a clear and sufficient explanation that it is conducting a targeted investigation into a limited group of persons, justified by reasonable suspicions of non-compliance with a specific legal obligation.

    2. Article 47 of the Charter of Fundamental Rights of the European Union must be interpreted as meaning that a person holding information who:

    • has had an administrative financial penalty imposed on him or her for failure to comply with an information order in the context of an exchange between national tax authorities pursuant to Directive 2011/16, where that order is itself not open to challenge under the domestic law of the requested Member State, and
    • has contested the legality of that order indirectly in an action against the decision imposing a penalty for failure to comply with that order, having thus obtained disclosure of the minimum information referred to in Article 20(2) of that directive in the course of the judicial proceedings relating to that action,

    must, following the definitive recognition of the legality of that order and that decision issued against him or her, be given the opportunity to comply with the information order within the time limit initially prescribed for that purpose by national law, without that entailing the continued application of the penalty which that person had to incur in order to exercise his or her right to an effective remedy. It is only if that person does not comply with that order within that time limit that the penalty imposed would legitimately become payable.

  • Paragraphs referring to EU Charter

    1) This request for a preliminary ruling concerns the interpretation of Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and of Article 1(1), Article 5 and Article 20(2)(a) of Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ 2011 L 64, p. 1).

    ...

    35) The question therefore arises whether the right to an effective remedy enshrined in Article 47 of the Charter means that, if the legality of the information order and the decision imposing a penalty for failure to comply with that order are definitively recognised, the holder of the information must be given a certain amount of time in order to be able to comply with the information order and that the penalty becomes payable only if that person does not comply with it within that time limit.

    36) In those circumstances, the Cour administrative (Higher Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

    ‘(1) Must Article 20(2)(a) of Directive 2011/16 be interpreted as meaning that where a request for exchange of information formulated by an authority of a requesting Member State designates the taxpayers to which it relates simply by reference to their status as shareholders and beneficial owners of a company, without those taxpayers having been identified by the requesting authority in advance, individually and by name, the request satisfies the identification requirements laid down by that provision?

    (2) If the answer to the first question is in the affirmative, must Article 1(1) and Article 5 of that directive be interpreted as meaning that the standard of foreseeable relevance may be met, if the requesting Member State, in order to establish that it is not engaged in a fishing expedition, despite the fact that it has not individually identified the taxpayers concerned, provides a clear and sufficient explanation evidencing that it is conducting a targeted investigation into a limited group of persons, and not simply an investigation by way of general fiscal surveillance, and that its investigation is justified by reasonable suspicions of non-compliance with a specific legal obligation?

    (3) Must Article 47 of the Charter of Fundamental Rights of the European Union be interpreted as meaning that, where

    • a person who has had imposed upon him [or her] by the competent authority of a Member State an administrative financial penalty for non-compliance with an administrative decision, requiring him [or her] to provide information in connection with an exchange of information between national tax authorities pursuant to Directive 2011/16, where the national law of the requested Member State does not make provision for an action to be brought against the latter decision, and where the person concerned has challenged the legality of that decision within an action brought against the financial penalty, and
    • has only obtained disclosure of the minimal information referred to in Article 20(2) of Directive 2011/16 in the course of the judicial procedure set in motion by the bringing of that action,

    that person is entitled, in the event of a definitive incidental finding upholding the validity of the decision requiring the requested information and of the decision imposing a fine on him [or her], to a period of grace for the payment of that fine, so that he [or she] has an opportunity, having thus been given disclosure of the material supporting the contention – definitively accepted by the competent court – that the test of foreseeable relevance is met, to comply with the decision requiring the requested information?’

    ...

    73) The Luxembourg Government implicitly disputes the Court’s jurisdiction to rule on the third question. That government submits, in essence, that that question concerns purely domestic aspects, which concern the temporal application of national procedural rules and which, consequently, have no connection with EU law. Since Article 47 of the Charter is applicable to a national dispute only if the latter has a sufficiently close connection with EU law, that question falls outside the jurisdiction of the Court.

    74) In that regard, it must be noted that the Law of 25 November 2014, inasmuch as it specifies the details for the procedure for the exchange of information on request established by Directive 2011/16, and in particular those relating to the enforcement and review of the legality of information orders and the penalty decisions for failure to comply with those orders, adopted so as to ensure the smooth operation of that procedure, constitutes an implementation of that directive and therefore comes within the scope of EU law (see, to that effect, judgments of 16 May 2017, Berlioz Investment Fund, C‑682/15, EU:C:2017:373, paragraphs 34 to 41, and of 6 October 2020, État luxembourgeois (Right to bring an action against a request for information in tax matters), C‑245/19 and C‑246/19, EU:C:2020:795, paragraphs 45 and 46).

    75) It follows that Article 47 of the Charter is applicable, in accordance with Article 51(1) thereof (see, to that effect, judgments of 16 May 2017, Berlioz Investment Fund, C‑682/15, EU:C:2017:373, paragraphs 42 and 50, and of 6 October 2020, État luxembourgeois (Right to bring an action against a request for information in tax matters), C‑245/19 and C‑246/19, EU:C:2020:795, paragraph 46) and that the Court has jurisdiction to rule on the third question.

    ...

    86) By its third question, the referring court asks, in essence, whether Article 47 of the Charter must be interpreted as meaning that a person holding information who:

    • has had an administrative financial penalty imposed on him or her for failure to comply with an information order in the context of an exchange between national tax authorities pursuant to Directive 2011/16, where that order is itself not open to challenge under the domestic law of the requested Member State, and
    • has contested the legality of that order indirectly in an action against the decision imposing a penalty for failure to comply with that order, having thus obtained disclosure of the minimum information referred to in Article 20(2) of that directive in the course of the judicial proceedings relating to that action,

    is entitled, following the definitive recognition of the legality of that order and that decision issued against him or her, to a period of grace for the payment of the penalty in order to be able, having thus been given disclosure of the matters relating to the foreseeable relevance of the requested information, as definitively upheld by the court with jurisdiction, to comply with the information order.

    87) In order to answer that question, it must be noted, in the first place, that it follows from the settled case-law of the Court that the protection of persons, both natural and legal, against arbitrary or disproportionate intervention by the public authorities in the sphere of those persons’ private activities constitutes a general principle of EU law. That protection may be relied on by a legal person as a right guaranteed by the EU law, for the purposes of the first paragraph of Article 47 of the Charter, in order to challenge before a court an act adversely affecting that person, such as an order to provide information or a penalty imposed on the ground of non-compliance with that order (judgment of 6 October 2020, État luxembourgeois (Right to bring an action against a request for information in tax matters), C‑245/19 and C‑246/19, EU:C:2020:795, paragraphs 57 and 58 and the case-law cited).

    88) It follows that a legal person to whom the competent national authority has addressed such an order or decision, like the defendant in the main proceedings, must be granted the right to an effective remedy guaranteed by Article 47 of the Charter when confronted with that order or decision, the exercise of which may be limited by the Member States only if the conditions laid down in Article 52(1) of the Charter are satisfied (see, to that effect, judgment of 6 October 2020, État luxembourgeois (Right to bring an action against a request for information in tax matters), C‑245/19 and C‑246/19, EU:C:2020:795, paragraphs 59, 60 and 64).

    89) In the second place, it should be recalled that the Court has previously held that the national court hearing an action against the pecuniary administrative penalty imposed on the relevant person for failure to comply with an information order must be able to examine the legality of that information order if it is to satisfy the requirements of Article 47 of the Charter. Consequently, a relevant person on whom a pecuniary penalty has been imposed for failure to comply with an administrative decision directing that person to provide information in the context of an exchange between national tax administrations pursuant to Directive 2011/16 is entitled to challenge the legality of that decision (judgment of 16 May 2017, Berlioz Investment Fund, C‑682/15, EU:C:2017:373, paragraphs 56 and 59).

    90) In that context, first, the Court has held that if the judicial review guaranteed by Article 47 of the Charter is to be effective, the reasons given by the requesting authority must put the national court in a position in which it may carry out the review of the legality of the request for information. In view of the discretion enjoyed by the requesting authority within the meaning of the case-law recalled in paragraphs 42 and 44 above, the limits that apply in respect of the requested authority’s review, set out in paragraphs 43 and 46 above, are equally applicable to reviews carried out by the courts. Thus, the courts must merely verify that the information order is based on a sufficiently reasoned request by the requesting authority concerning information that is not – manifestly – devoid of any foreseeable relevance having regard to the matters set out in Article 20(2) of Directive 2011/16 concerning the identity of the person under examination or investigation and the tax purpose for which the information is sought (see, to that effect, judgment of 16 May 2017, Berlioz Investment Fund, C‑682/15, EU:C:2017:373, paragraphs 84 to 86).

    ...

    92) However, it must be borne in mind, in that respect, that if the judicial review guaranteed by Article 47 of the Charter is to be effective, the person concerned must be able to ascertain the reasons upon which the decision taken in relation to him or her is based, either by reading the decision itself or by requesting and obtaining notification of those reasons, without prejudice to the power of the court with jurisdiction to require the authority concerned to provide that information, so as to make it possible for him or her to defend his or her rights in the best possible conditions and to decide, with full knowledge of the relevant facts, whether there is any point in applying to the court with jurisdiction, and in order to put the latter fully in a position in which it may carry out the review of the lawfulness of the national decision in question (judgment of 24 November 2020, Minister van Buitenlandse Zaken, C‑225/19 and C‑226/19, EU:C:2020:951, paragraph 43 and the case-law cited).

    ...

    94) Furthermore, the Court has also recalled that it follows from settled case-law that the essence of the right to an effective remedy enshrined in Article 47 of the Charter includes, among other aspects, the possibility, for the person who holds that right, of accessing a court or tribunal with the power to ensure respect for the rights guaranteed to that person by EU law and, to that end, to consider all the issues of fact and of law that are relevant for resolving the case before it, without being compelled to infringe a legal rule or obligation or be subject to the penalty attached to that offence (see, to that effect, judgment of 6 October 2020, État luxembourgeois (Right to bring an action against a request for information in tax matters), C‑245/19 and C‑246/19, EU:C:2020:795, paragraph 66).

    ...

    97) Consequently, the Court has held that that national legislation, inasmuch as it excludes the possibility for a person holding information, to whom the competent national authority addresses a decision ordering that the information in question be provided, of bringing a direct action against that decision, does not respect the essence of the right to an effective remedy guaranteed by Article 47 of the Charter and, consequently, that Article 52(1) thereof precludes such legislation (judgment of 6 October 2020, État luxembourgeois (Right to bring an action against a request for information in tax matters), C‑245/19 and C‑246/19, EU:C:2020:795, paragraph 69).

    ...

    99) In the light of all the foregoing considerations, the answer to the third question is that Article 47 of the Charter must be interpreted as meaning that a person holding information who:

    • has had an administrative financial penalty imposed on him or her for failure to comply with an information order in the context of an exchange between national tax authorities pursuant to Directive 2011/16, where that order is itself not open to challenge under the domestic law of the requested Member State, and
    • has contested the legality of that order indirectly in an action against the decision imposing a penalty for failure to comply with that order, having thus obtained disclosure of the minimum information referred to in Article 20(2) of that directive in the course of the judicial proceedings relating to that action,

    must, following the definitive recognition of the legality of that order and that decision issued against him or her, be given the opportunity to comply with the information order within the time limit initially prescribed for that purpose by national law, without that entailing the continued application of the penalty which that person had to incur in order to exercise his or her right to an effective remedy. It is only if that person does not comply with that order within that time limit that the penalty imposed would legitimately become payable.