On November 25, 2021, on the website of the Court of Justice of the European Union (CJEU) the judgment of the Court in Case C- 437/19 État luxembourgeois versus L (ECLI:EU:C:2021:953), was published.

 

Introduction

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).

 

The request has been made in proceedings between the État luxembourgeois (Luxembourg State) and L, a company established under Luxembourg law, concerning the legality of a financial penalty which was imposed on that company for refusing to provide certain information following a request for exchange of information between Member States in tax matters.

 

The questions referred 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

1.  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

2.  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?

 

Judgment

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.

 

The full text of the judgment is available here.

 

 

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