CJEU C-623/22 / Judgment

Belgian Association of Tax Lawyers, SR, FK, Ordre des barreaux francophones et germanophone, Orde van Vlaamse Balies, CQ, Instituut van de Accountants en de Belastingconsulenten, VH, ZS, NI, EX v Premier ministre/Eerste Minister
Policy area
Taxation
Deciding body
Court (Second Chamber)
Decision date
29/07/2024
ECLI (European case law identifier)
ECLI:EU:C:2024:639
  • CJEU C-623/22 / Judgment

    Key facts of the case:

    Reference for a preliminary ruling – Administrative cooperation in the field of taxation – Mandatory automatic exchange of information in relation to reportable cross-border arrangements – Directive 2011/16/EU, as amended by Directive (EU) 2018/822 – Article 8ab(1) – Reporting obligation – 8ab(5) – Subsidiary obligation to notify – Legal professional privilege – Validity – Articles 7, 20 and 21, and Article 49(1) of the Charter of Fundamental Rights of the European Union – Right to respect for private life – Principles of equal treatment and non-discrimination – Principle of legality in criminal proceedings – Principle of legal certainty

    Outcome of the case:

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

    1.      The examination of the aspect to which the first question referred relates has disclosed no factor of such a kind as to affect the validity of Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC, as amended by Council Directive (EU) 2018/822 of 25 May 2018, in the light of the principles of equal treatment and non-discrimination, and of Articles 20 and 21 of the Charter of Fundamental Rights of the European Union.

    2.      The examination of the aspects to which the second and third questions referred relate has disclosed no factor of such a kind as to affect the validity of Directive 2011/16, as amended by Directive 2018/822, in the light of the principle of legal certainty, the principle of legality in criminal matters enshrined in Article 49(1) of the Charter of Fundamental Rights and the right to respect for private life guaranteed in Article 7 of that Charter.

    3.      The invalidity of Article 8ab(5) of Directive 2011/16, as amended by Directive 2018/822, in the light of Article 7 of the Charter of Fundamental Rights, declared by the Court in the judgment of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963), applies only to persons who pursue their professional activities under one of the professional titles referred to in Article 1(2)(a) of Directive 98/5/EC of the European Parliament and of the Council of 16 February 1998 to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained.

    4.      The examination of the aspects to which the fifth question referred relates has disclosed no factor of such a kind as to affect the validity of Directive 2011/16, as amended by Directive 2018/822, in the light of the right to respect for private life guaranteed in Article 7 of the Charter of Fundamental Rights.

  • Paragraphs referring to EU Charter

    22. By its first question, the referring court, in essence, asks the Court of Justice to examine the validity of amended Directive 2011/16 in the light of the principles of equal treatment and non-discrimination, and of Articles 20 and 21 of the Charter, in so far as that directive does not limit the reporting obligation laid down in Article 8ab(1), (6) and (7) to corporation tax, but makes it applicable to all taxes falling within its scope.

    23. As regards the principle of non-discrimination laid down in Article 21 of the Charter, it should be noted at the outset that it is not apparent how the application without distinction of the reporting obligation at issue with regard to the various tax types concerned could reveal the existence of a difference in treatment based on a specific factor such as those listed in that provision.

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    34. In view of the foregoing considerations, it must be concluded that the examination of the aspect to which the first question relates has disclosed no factor of such a kind as to affect the validity of amended Directive 2011/16, in the light of the principles of equal treatment and non-discrimination, and of Articles 20 and 21 of the Charter.

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    35. By the second and third questions, which it is appropriate to examine together, the referring court asks the Court to examine the validity of amended Directive 2011/16, in the light of the principle of legal certainty, the principle of legality in criminal matters enshrined in Article 49(1) of the Charter and the right to respect for private life guaranteed in Article 7 of the Charter, in so far as the concept of ‘arrangement’, and therefore those of ‘cross-border arrangement’, ‘marketable arrangement’ and ‘bespoke arrangement’, ‘intermediary’, ‘participant’, ‘associated enterprise’, the description ‘cross-border’, the various ‘hallmarks’, the ‘main benefit test’ and, lastly, the starting point of the 30-day period prescribed for fulfilling the reporting obligation, which that directive uses and lays down in order to determine the scope and reach of that obligation, are not sufficiently clear and precise.

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    88. As regards compliance with Article 7 of the Charter, the second and third questions concern, in essence, whether, irrespective of the issue of compliance with legal professional privilege, the concepts and time limits referred to in those questions are sufficiently precise for the interference with the private life of the intermediary and the relevant taxpayer entailed by the reporting obligation to be defined itself in a sufficiently precise manner in view of the information which that declaration must contain.

    89. Since, as the Advocate General observes in point 123 of his Opinion, Article 7 of the Charter does not impose any obligation that is stricter than Article 49 of the Charter in terms of the requirement for clarity or precision of the concepts used and the time limits laid down, it must be held that the interference with the private life of the intermediary and relevant taxpayer entailed by the reporting obligation is itself defined in a sufficiently precise manner in view of the information that that reporting must contain. That consideration is, however, without prejudice to the examination of whether that interference goes beyond what is necessary to safeguard the public interest objectives pursued by amended Directive 2011/16, which is the subject of the fifth question referred for a preliminary ruling.

    90. In view of all the foregoing considerations, it must be concluded that the examination of the aspects to which the second and third questions referred relate has disclosed no factor of such a kind as to affect the validity of amended Directive 2011/16, in the light of the principle of legal certainty, the principle of legality in criminal matters enshrined in Article 49(1) of the Charter and the right to respect for private life guaranteed in Article 7 of the Charter.

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    111. By the fourth question, the referring court asks the Court, in essence, to examine the validity of Article 8ab(5) of amended Directive 2011/16 in the light of Article 7 of the Charter, in so far as the effect of the application of Article 8ab(5) by the Member States is to require an intermediary who is not a lawyer but is authorised to ensure legal representation, where that intermediary is exempt from the reporting obligation laid down in Article 8ab(1) of that directive on account of legal professional privilege which he or she is bound by, to notify without delay any other intermediary who is not his or her client of that other intermediary’s reporting obligations under Article 8ab(6) of that directive.

    112. In that regard, it should be noted at the outset that Article 7 of the Charter, which recognises that everyone has the right to respect for his or her private and family life, home and communications, corresponds to Article 8(1) of the ECHR (judgment of 8 December 2022, Orde van Vlaamse Balies and Others, C‑694/20, EU:C:2022:963, paragraph 25).

    113. In accordance with Article 52(3) of the Charter, which is intended to ensure the necessary consistency between the rights contained in the Charter and the corresponding rights guaranteed by the ECHR without adversely affecting the autonomy of EU law, the Court of Justice must therefore take into account, when interpreting the rights guaranteed by Article 7 of the Charter, the corresponding rights guaranteed by Article 8(1) of the ECHR, as interpreted by the ECtHR, as the minimum threshold of protection (judgment of 8 December 2022, Orde van Vlaamse Balies and Others, C‑694/20, EU:C:2022:963, paragraph 26).

    114. As the Court has already stated, it is apparent from the case-law of the ECtHR that Article 8(1) ECHR protects the confidentiality of all correspondence between individuals and affords strengthened protection to exchanges between lawyers and their clients (see, to that effect, ECtHR, 6 December 2012, Michaud v. France, CE:ECHR:2012:1206JUD001232311, §§ 117 and 118). Like that provision, the protection of which covers not only the activity of defence but also legal advice, Article 7 of the Charter necessarily guarantees the secrecy of that legal consultation, both with regard to its content and to its existence. As the ECtHR has pointed out, individuals who consult a lawyer can reasonably expect that their communication is private and confidential (ECtHR, 9 April 2019, Altay v. Turkey (No 2), CE:ECHR:2019:0409JUD001123609, § 49). Therefore, other than in exceptional situations, those persons must have a legitimate expectation that their lawyer will not disclose to anyone, without their consent, that they are consulting him or her (judgment of 8 December 2022, Orde van Vlaamse Balies and Others, C‑694/20, EU:C:2022:963, paragraph 27).

    115. As the Court has also held, the specific protection which Article 7 of the Charter and Article 8(1) ECHR afford to lawyers’ legal professional privilege, which primarily takes the form of obligations on them, is justified by the fact that lawyers are assigned a fundamental role in a democratic society, that of defending litigants (ECtHR, 6 December 2012, Michaud v. France, CE:ECHR:2012:1206JUD001232311, §§ 118 and 119). That fundamental task entails, on the one hand, the requirement, the importance of which is recognised in all the Member States, that any person must be able, without constraint, to consult a lawyer whose profession encompasses, by its very nature, the giving of independent legal advice to all those in need of it and, on the other, the correlative duty of the lawyer to act in good faith towards his or her client (judgment of 8 December 2022, Orde van Vlaamse Balies and Others, C‑694/20, EU:C:2022:963, paragraph 28).

    116. It is apparent from the case-law referred to in paragraphs 114 and 115 above that the confidentiality of the relationship between a lawyer and his or her client enjoys very specific protection, which relates to the special position occupied by a lawyer in the judicial organisation of the Member States and to the fundamental task entrusted to him or her and which is recognised by all the Member States. It was in the light of those considerations that the Court, in the judgment of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963), held that the obligation to notify, when it is imposed on the lawyer, infringes Article 7 of the Charter.

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    119. Therefore, as regards the other professionals who, although authorised, as the case may be, by the Member States to ensure legal representation, do not meet the abovementioned characteristics, such as, for example, university professors in certain Member States, there is nothing to support the conclusion that Article 8ab(5) of amended Directive 2011/16 is invalid in the light of Article 7 of the Charter, in so far as the obligation to notify, where it is substituted by the Member State for the reporting obligation, has the consequence that the existence of the consultation link between the notifying intermediary and his or her client is brought to the attention of the notified intermediary and, ultimately, the tax administration.

    120. In those circumstances, the answer to the fourth question is that the invalidity of Article 8ab(5) of amended Directive 2011/16, in the light of Article 7 of the Charter, declared by the Court in the judgment of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963), applies only to persons who pursue their professional activities under one of the professional titles referred to in Article 1(2)(a) of Directive 98/5.

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    121. By that question, the referring court is essentially asking the Court of Justice to examine the validity of Article 8ab(1), (6) and (7) of amended Directive 2011/16 in the light of the right to respect for private life guaranteed in Article 7 of the Charter, in so far as those provisions have the effect of requiring intermediaries who do not benefit from the waiver referred to in Article 8ab(5) of that directive and, in the absence of an intermediary subject to the reporting obligation, the relevant taxpayer, to undertake the reporting provided for in Article 8ab(1) of that directive.

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    132. It follows that the reporting obligation, in so far as it covers, inter alia, such arrangements, entails a limitation of the freedom of taxpayers and intermediaries to organise their personal, professional and business activities and therefore constitutes an interference with the right to respect for private life guaranteed in Article 7 of the Charter.

    133. The question therefore arises as to whether that interference may be justified.

    134.  It must be recalled that the rights enshrined in Article 7 of the Charter are not absolute rights, but must be considered in relation to their function in society. Indeed, as can be seen from Article 52(1) of the Charter, that provision allows limitations to be placed on the exercise of those rights, provided that those limitations are provided for by law, that they respect the essence of those rights and that, in compliance with the principle of proportionality, they are necessary and genuinely meet objectives of general interest recognised by the European Union or the need to protect the rights and freedoms of others (see, to that effect, judgment of 6 October 2020, Privacy International, C‑623/17, EU:C:2020:790, paragraphs 63 and 64).

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    138. In the second place, as regards the requirement relating to respect for the essence of the right to respect for private life, guaranteed in Article 7 of the Charter, it should be noted that an obligation such as that at issue in the main proceedings, which relates solely to the communication of data revealing the design and implementation of a potentially aggressive tax arrangement without even directly affecting the possibility of such design or such implementation, cannot be regarded as undermining the essence of the right to respect for the private life of the persons concerned.

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    141. Combating aggressive tax planning and preventing the risks of tax avoidance and evasion constitute objectives of general interest recognised by the European Union for the purposes of Article 52(1) of the Charter, capable of enabling a limitation to be placed on the exercise of the rights guaranteed by Article 7 of the Charter (judgment of 8 December 2022, Orde van Vlaamse Balies and Others, C‑694/20, EU:C:2022:963, paragraph 44 and the case-law cited).

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    150. In view of all the foregoing considerations, it must be concluded that the examination of the aspects to which the fifth question relates has disclosed no factor of such a kind as to affect the validity of amended Directive 2011/16 in the light of the right to respect for private life guaranteed in Article 7 of the Charter.

  • Paragraphs referring to EU Charter (original language)