Commission of the European Communities v Kingdom of Denmark. (Actions against Member States for failure to fulfil obligations) [1992] EUECJ C-52/90 (31 March 1992)

Judgment 1 By application lodged at the Court Registry on 6 March 1990, the Commission brought an action under Article 169 of the EEC Treaty for a declaration that, by failing to apply the provisions of Council Directive 83/182/EEC of 28 March 1983 on tax exemptions within the Community for certain means of transport temporarily imported into one Member State from another (Official Journal 1983 L 105, p. 59, hereinafter "the directive"), and in particular Article 9(3) thereof, the Kingdom of Denmark had failed to fulfil its obligations under the EEC Treaty. 2 Under Articles 3, 4 and 5 of the directive, individuals may enjoy exemption from taxes when temporarily importing a vehicle into a Member State, provided that they have their normal residence in another Member State. Article 7 contains general rules for determining normal residence. 3 Article 9 of the directive contains a number of special rules. One of those rules, in Article 9(3), relates to Denmark: "The Kingdom of Denmark is authorized to maintain the rules applying in that country in connection with normal residence according to which any person, including a student, in respect of the case referred to in Article 5(1)(b), is regarded as having his normal residence in Denmark if he lives there for a year or 365 days in a period of 24 months. However, to avoid double taxation: - where, as a result of the application of these rules, a person is considered to have two residences, the normal residence of that person is situated where his spouse and children live; - in similar cases, the Kingdom of Denmark shall consult with the other Member State concerned to decide which of the two residences should be used for the purposes of taxation. Before a period of three years has elapsed, the Council, on the basis of a report by the Commission, will re-examine the derogation covered by this paragraph and, if necessary, will adopt measures, on a proposal from the Commission based on Article 99 of the Treaty, to ensure the abolition of the derogation." 4 Article 10 contains the final provisions of the directive. Article 10(2) provides that: "Where the practical application of this directive gives rise to difficulties, the competent authorities of the Member States concerned shall take the necessary decisions by mutual agreement, particularly in the light of the Conventions and Community directives on mutual assistance." 5 On 14 May 1986 the Commission sent the Danish Government a letter giving formal notice under the procedure laid down in Article 169 of the EEC Treaty. In that letter the Commission claimed to have found, in examining complaints submitted by individuals to the European Parliament, that the Danish authorities had interpreted the provisions of the directive, in particular Article 9(3) thereof, incorrectly. 6 In a letter of 16 July 1986 the Danish Government denied that the Danish authorities had misinterpreted the directive. It argued that the Commission had not supplied it with the facts on which the infringement proceedings were based and consequently had insufficient grounds for its action. 7 In view of that reply the Commission issued a reasoned opinion on 21 September 1987. In the opinion the Commission set out the details of the two cases, namely two judgments of the Danish courts, which had led it to conclude that the Danish authorities were interpreting the provisions of the directive, in particular Article 9(3) thereof, incorrectly. It stated, however, that it was not criticising the decisions in those two particular cases, which it mentioned only as illustrations of the problem of interpretation in question. 8 In the reasoned opinion the Commission also maintained that, according to the judgment in Case 134/83 Abbink [1984] ECR 4097, national provisions concerning the payment of valued added tax on a vehicle used temporarily in a Member State other than that where it is registered must not lead to double taxation. 9 The Danish Government replied to the reasoned opinion on 20 November 1987. It argued that the relevant provision for determining normal residence in the two cases referred to by the Commission was Article 7 of the directive, not Article 9(3). The Danish Government considered that the two courts in question had interpreted Article 7 correctly. With respect to Article 9(3), the Danish Government stated that it did not need to explain its position further, but nevertheless pointed out that the competent authorities in Denmark and Germany had carried on negotiations in 1986 and 1987 with a view to settling the details of the consultation procedure referred to in that article. 10 As the Danish Government did not accept the Commission' s complaints, the Commission decided to lodge the present application. 11 The Commission' s application is in two parts. In the first part, entitled "Facts and Procedure", the Commission sets out the objectives and provisions of the directive and the stages in the pre-litigation procedure. The Commission also refers to a request for a preliminary ruling from the Hoejesteret, registered at the Court under No C-297/89, which is said to explain the fiscal importance of the present case and also the directive' s objective of ensuring freedom of movement for Community residents. 12 The second part of the application, entitled "Legal Position", is in two sections. The first section deals with the obligation to avoid double taxation. The Commission starts by pointing out the importance of the directive and quotes part of Article 9(3) thereof. It then refers to a number of judgments of the Court relating to taxation of vehicles registered in another Member State, in particular the Abbink judgment cited above. Finally, it observes that double taxation in the case of the temporary importation of a motor vehicle contravenes Articles 8a and 95 of the EEC Treaty. 13 In the second section of the "Legal Position" part, relating to the obligation to cooperate with the tax authorities of the other Member States, the Commission refers to Articles 9(3) and 10(2) of the directive. It argues that Denmark has never accepted that it is for the Danish national authorities, in cooperation with the other Member State concerned, to determine how to avoid double taxation in the context of complaints referred to them relating to the practical application of the directive. 14 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the procedure and the pleas and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court. 15 The Danish Government' s primary contention is that the application is inadmissible for several reasons. It maintains that the application does not comply with the requirements of Article 38(1)(c) of the Rules of Procedure, under which an application must state the subject matter of the proceedings and give a summary of the pleas in law on which it is based. The Danish Government notes in this respect that the application does not allege any specific failure on the part of the Danish authorities to fulfil their obligations, and that it is therefore not possible to determine the provisions of the directive which they are said to have infringed. 16 However, with a view to putting forward, by way of an alternative plea, a defence on the merits of the case, the Danish Government infers from the wording of the application and the correspondence exchanged during the administrative procedure that the Commission' s complaints may possibly relate to the interpretation of the term "normal residence" for the purposes of the directive, the obligation of consultation between the tax authorities of the Member States, and the obligation to avoid double taxation. 17 With reference to the admissibility of the application, it should be noted that under Article 19 of the Protocol on the Statute of the Court of Justice of the EEC and Article 38(1)(c) of the Rules of Procedure, the Commission must indicate, in any application made under Article 169 of the Treaty, the specific complaints on which the Court is asked to rule and, at the very least in summary form, the legal and factual particulars on which those complaints are based (see the judgment of the Court in Case C-347/88 Commission v Greece [1990] ECR I-4747 , at paragraph 28). 18 It must be held that in the present case the application does not comply with those requirements. In the "Legal Position" part of its application the Commission in fact does no more than mention a number of provisions of the directive, certain judgments of the Court and Articles 5, 8a, 95 and 189 of the Treaty; the application does not give any details of the facts and circumstances which allegedly gave rise to the failure by the Danish authorities to fulfil their obligations. 19 The Court is consequently unable to rule on the case as submitted to it by the Commission. 20 In addition, it should be noted that this finding is not invalidated by the definition of the Commission' s complaints formulated by the Danish Government in its defence and summarized at paragraph 16 above. 21 As to the interpretation of the concept of normal residence for the purposes of the directive, it should be noted that Article 7 of the directive contains general rules and Article 9(3) special rules for Denmark. In its application and in the documents relating to the pre-litigation procedure, the Commission argues that the provisions in force in Denmark on the concept of normal residence were based exclusively on Article 9(3). In its reply, however, it argues that the Danish authorities were also in breach of Article 7 of the directive and should, under Article 10(1) of the directive, have informed it that the national legislation in question had also been enacted under Article 7. 22 In this respect it suffices to state that the latter complaint does not appear in the application and therefore cannot be examined. 23 With reference to the obligation on the tax authorities of the Member States to cooperate with one another, it should be noted that it has been consistently held that the scope of an application under Article 169 of the Treaty is delimited by the pre-litigation procedure provided for in that article and that the Commission' s reasoned opinion and the application must be based on the same grounds and pleas in law. 24 In the present case the reasoned opinion does not contain any ground or plea relating to the obligation of cooperation referred to by the Commission in its application; consequently the complaint concerning that point cannot be examined by the Court. 25 Finally, with reference to the requirement of avoiding double taxation, it suffices to observe that the claims made in the application relate only to the provisions of the directive, whereas according to the Commission' s statements that requirement derives not from the directive but from Article 95 of the Treaty. The complaint relating to that obligation is thus not covered by the claims made in the application. 26 It follows from all the above considerations that the Commission' s application is inadmissible. Costs 27 Under Article 69(2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs. Since the applicant has been unsuccessful, it must be ordered to pay the costs. On those grounds, THE COURT hereby: 1. Dismisses the application as inadmissible; 2. Orders the applicant to pay the costs. © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII