CJEU - C-543/14 / Judgment

Ordre des barreaux francophones and germanophone and Others
Policy area
Justice, freedom and security
Taxation
Deciding body type
Court of Justice of the European Union
Deciding body
Court (Fourth Chamber)
Typ
Decision
Decision date
28/07/2016
ECLI (European case law identifier)
ECLI:EU:C:2016:605
  • CJEU - C-543/14 / Judgment

    Key facts of the case:

    VAT — Directive 2006/112/EC — Validity and interpretation of the directive — Services provided by lawyers — Liability to VAT — Right to an effective remedy — Equality of arms — Legal aid

    Results (sanctions) and key consequences of the case:

    ...the Court (Fourth Chamber) hereby rules:

    1. The examination of Article 1(2) and Article 2(1)(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, in the light of the right to an effective remedy and the principle of equality of arms under Article 47 of the Charter of Fundamental Rights of the European Union has not revealed anything which might affect their validity in so far as those provisions impose VAT on services supplied by lawyers to clients who do not qualify for legal aid under a national legal aid scheme.
    2. Article 9(4) and (5) of the Convention on access to information, public participation in decision-making and access to justice in environmental matters, signed at Aarhus on 25 June 1998, cannot be relied on for the purposes of assessing the validity of Article 1(2) and Article 2(1)(c) of Directive 2006/112.
    3. Article 132(1)(g) of Directive 2006/112 must be interpreted as meaning that the services supplied by lawyers for clients who qualify for legal aid under a national legal aid scheme, such as that at issue in the main proceedings, are not exempt from VAT.
  • Paragraphs referring to EU Charter
    1. Since the referring court refers not only to Article 47 of the Charter, but also to Article 14 of the ICCPR and Article 6 of the ECHR, it should be recalled that, whilst, as Article 6(3) TEU confirms, fundamental rights recognised by the ECHR constitute general principles of EU law and whilst Article 52(3) of the Charter provides that the rights contained in the Charter which correspond to rights guaranteed by the ECHR are to have the same meaning and scope as those laid down by the ECHR, the latter does not constitute, as long as the European Union has not acceded to it, a legal instrument which has been formally incorporated into EU law (judgments of 26 February 2013 in Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraph 44; 3 September 2015 in Inuit Tapiriit Kanatami and Others v Commission, C‑398/13 P, EU:C:2015:535, paragraph 45; and 15 February 2016 in N., C‑601/15 PPU, EU:C:2016:84, paragraph 45). This finding also applies to the ICCPR. Accordingly, an examination of the validity of Directive 2006/112 must be undertaken solely in the light of the fundamental rights guaranteed by the Charter (see, to that effect, judgment of 15 February 2016 in N., C‑601/15 PPU, EU:C:2016:84, paragraph 46 and the case-law cited).
    1. Article 47 of the Charter enshrines the right to an effective remedy, which includes, in the second paragraph of that article, in particular, the right of everyone to have the possibility of being advised, defended and represented by a lawyer. The third paragraph of that article guarantees the right to an effective remedy through the grant of legal aid to individuals who lack sufficient resources.
    2. In that regard, it should be noted that, according to the case file submitted to the Court, individuals who are not entitled to legal aid, who alone are covered by part (a) of the first question, are deemed, according to the relevant provisions of national law, to have sufficient resources to have access to justice by being represented by a lawyer. With regard to those individuals, the right to an effective remedy enshrined in Article 47 of the Charter, does not, in principle, guarantee a right to the exemption from VAT of the supply of services by lawyers.
    3. Part (a) of the first question, concerning the validity of Article 1(2) and Article 2(1)(c) of Directive 2006/112 in the light of Article 47 of the Charter, is to be assessed according to the characteristics of those provisions themselves and cannot depend on the particular circumstances of a given case.
    1. However, according to the case-law of the Court, relating to several areas other than VAT law, the imposition of such costs can be challenged in the light of the right to an effective remedy guaranteed by Article 47 of the Charter only where those costs represent an insurmountable obstacle (see, by analogy, judgment of 22 December 2010 in DEB, C‑279/09, EU:C:2010:811, paragraph 61, and order of 13 June 2012 in GREP, C‑156/12, not published, EU:C:2012:342, paragraph 46) or where they make it in practice impossible or excessively difficult to exercise the rights conferred by the EU legal order (see, by analogy, judgment of 6 October 2015 in Orizzonte Salute, C‑61/14, EU:C:2015:655, paragraphs 48, 49 and 58).
    1. In any event, since the amount of VAT at issue in the main proceedings is far from constituting the largest part of the costs of legal proceedings, the Court cannot hold that the charging of VAT on the services supplied by lawyers creates, by itself, an insurmountable obstacle to access to justice or that it makes it in practice impossible or excessively difficult to exercise the rights conferred by the EU legal order. In those conditions, the fact that such a charge could eventually lead to increased costs cannot call into question, as regards the right to an effective remedy guaranteed by Article 47 of the Charter, that charge to VAT.
    2. If, owing the particular circumstances of a given case, the charging of VAT on the services supplied by lawyers were to create, by itself, an insurmountable obstacle to access to justice or make it in practice impossible or excessively difficult to exercise the rights conferred by the EU legal order, account would have to be taken of this by framing the right to legal aid appropriately, in accordance with the third paragraph of Article 47 of the Charter.
    1. Finally, in the event that those services are found not to be exempt from VAT, the referring court questions the validity of Article 1(2) and Article 2(1)(c) of the directive in the light of Article 47 of the Charter, in so far as they subject those supplies of services to VAT at the rate of 21%. In that regard, it seems clear from the information furnished by the referring court that the national legal aid scheme at issue bears the full legal costs of individuals qualifying for that aid, including VAT on the services supplied by lawyers.