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Belgium / Constitutional Court / 165/2014

French and German speaking bar associations and Others, Jimmy Tessens and Others, Flemish Bar Association Bar Association of Aarlen and Others v Council of Ministers (Ministerraad/Conseil des ministres)

Policy area:
Taxation
Deciding Body type:
National Court/Tribunal
Deciding Body:
Constitutional Court
Type:
Decision
Decision date:
13/11/2014

Key facts of the case:

The applicants requested the annulment of Article 60 of the Law on diverse provisions of 30 July 2013, which states that article 44 para 1 line 1 of the Code on VAT is revoked. This latter provision exempted from VAT the services provided by legal counsels. The applicants claim that the withdrawal of the exemption from VAT for the legal services provided by practicing lawyers constitutes a violation of the Belgian Constitution, the European Convention on Human Rights, the International Covenant on Civil and Political Rights, and article 47 of the EU Charter of fundamental rights, which lays down the right to an effective remedy and fair trial, including the right to legal aid. They argue that services by lawyers must remain financially accessible and that these services should not be compared with other services in respect of taxation because these services are of crucial importance in a rule-of-law state.

Outcome of the case:

The Court

before ruling on the substance of the matter, asks the Court of Justice of the European Union the following preliminary/judicial questions:

  1.  
  1. In submitting the services provided by lawyers to VAT, without accounting for, with regard to the right to retain and instruct counsel and the principle of equality of arms, the circumstance by which the defendant who does not benefit from legal aid is or is not subjected to the VAT, is Council Directive 2006/112/CE of 28 November 2006 on the common system of value added tax compatible with article 47 of the Charter of Fundamental Rights of the European Union, combined with Article 14 of the International Covenant on Civil and Political Rights and with Article 6 of the European Convention on Human Rights, in that this article grants everyone the right for their cause to be equitably heard, the possibility of being advised, defended and represented and the right to legal aid for those who lacking sufficient resources, when this aid is necessary to ensure the effectiveness of their access to justice?
  1. For the same reasons, is Council Directive 2006/112/CE of 28 November 2006 compatible with Article 9, paragraphs 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 25th June 1998, in that its provisions envision a right to access to justice without the procedures’ cost being prohibitive through “the establishment of appropriate assistance mechanisms to remove or reduce financial and other barriers to access to justice”?
  1. Can the services provided by lawyers in the context of a national legal aid scheme be included in the services referred to in Article 132, paragraph 1, under g), of the aforementioned Directive 2006/112/CE, that are closely linked to aid and social security, or can they be exonerated by virtue of another disposition in the Directive? In case of a negative response to this question, is Directive 2006/112/CE, interpreted as not permitting the VAT exemption of services rendered by lawyers for defendants benefiting from legal aid as part of a national legal aid scheme, compatible with Article 47 of the Charter of Fundamental Rights of the European Union, combined with Article 14 of the International Covenant on Civil and Political Rights and Article 6 of the European Convention on Human Rights?
  1. In case of a negative response to the questions in point 1, is Article 98 of Directive 2006/112/CE, in that it does not provide for the possibility to apply a reduced VAT rate to services rendered by lawyers, as appropriate where the defendant who does not benefit from legal is or is not subject to VAT, compatible with Article Article 47 of the Charter of Fundamental Rights of the European Union, combined with Article 14 of the International Covenant on Civil and Political Rights and Article 6 of the European Convention on Human Rights, in that this article grants everyone the right right for their cause to be equitably heard, the possibility of being advised, defended and represented and the right to legal aid for those who lacking sufficient resources, when this aid is necessary to ensure the effectiveness of their access to justice?
  1. In case of a negative response to the questions in point 1, is Article 132 of Directive 2006/112/CE compatible with the principle of equality and non-discrimination enshrined in Articles 20 and 21 of the Charter of Fundamental Rights of the European Union and Article 9 of the European Union, combined with Article 47 of the same Charter, in that it does not provide for, within the activities of public interest, VAT exoneration for provision of services by a lawyer, while other services such as those provided by public postal services, diverse medical services or even services related to education, sports or culture are exonerated as activities of public interest, and that this difference in treatment between the services of a lawyer and those services exonerated by Article 132 of the Directive creates sufficient doubt when the services of a lawyer contribute to the respect of certain fundamental rights?
  1.  
  1. In case of a negative response to the questions in point 1 and 3, can Article 371 of Directive2006/112/CE be interpreted, in conformity with Article 47 of the Charter of Fundamental Rights of the European Union, as authorising an EU Member State to partially maintain the exoneration of the services of a lawyer when these services are provided to defendants who are not subject to VAT?
  2. Can Article 371 of Directive 2006/112/CE also be interpreted, following Article 47 of the Charter of Fundamental Rights of the European Union, as authorising an EU Member State to partially maintain the exoneration of the services for a lawyer when these services are provided to defendants benefiting from legal aid as part of a national legal aid scheme?