Case C‑678/11

European Commission

v

Kingdom of Spain

‛Failure of a Member State to fulfil obligations — Article 56 TFEU and Article 36 of the EEA Agreement — Services offered in Spain by pension funds and insurance companies established in another Member State — Occupational pension schemes — Obligation to designate a tax representative resident in Spain — Restrictive nature — Justification — Effective fiscal supervision and prevention of tax avoidance — Proportionality’

Summary — Judgment of the Court (Fifth Chamber), 11 December 2014

1. Judicial proceedings — Application initiating proceedings — Formal requirements — Identification of the subject-matter of the dispute — Brief summary of the pleas in law on which the application is based — Unambiguous wording of the form of order sought by the applicant

   (Rules of Procedure of the Court of Justice, Art. 38(1)(c))

2. Freedom to provide services — Restrictions — Services offered by pension funds and insurance companies established in another Member State — Obligation to designate a tax representative resident in the State where the services are provided — Restrictive nature — Justification — Effective fiscal supervision and prevention of tax avoidance — Proportionality — None

   (Art. 56 TFEU)

3. International agreements — Agreement establishing the European Economic Area — Freedom to provide services — Restrictions — Services offered by pension funds and insurance companies established in another Member State — Obligation to designate a tax representative resident in the State where the services are provided — Restrictive nature — Justification — Effective fiscal supervision and prevention of tax avoidance — Proportionality — Lawfulness

   (EEA Agreement, Art. 36; Council Directives 77/799 and 2008/55)

1.  See the text of the decision.

   (see paras 14-16, 19)

2.  A Member State has failed to fulfil its obligations under Article 56 TFEU where it adopts national legislation pursuant to which pension funds established in Member States other than that Member State and offering occupational pension schemes in that Member State and insurance companies operating in that Member State under the freedom to provide services are required to appoint a tax representative resident in that Member State.

   The obligation to appoint a tax representative in that Member State constitutes a restriction within the meaning of Article 56 TFEU and is likely to involve additional costs for pension funds established in other Member States offering occupational pension schemes in that Member State, and for insurance companies operating in that Member State under the freedom to provide services. Consequently, that obligation makes the provision of services by those entities to persons residing in that Member State more difficult and less attractive than the provision of similar services to the same persons by entities established in that Member State which are not subject to that obligation. Furthermore, the fact that that representative must reside in that Member State impedes the freedom to provide services for persons and undertakings established in other Member States and wishing to provide tax representation services to entities or natural persons operating in the Member State.

   It is true that the obligations to disclose information and to withhold and pay sums due to the public treasury, which the tax representatives referred to in the legislation at issue must perform for the pension funds and insurance companies established in other Member States, constitute an appropriate means of ensuring the effective collection of the tax due on income paid by the occupational pension schemes.

   However, national legislation giving pension funds established in other Member States and offering occupational pension schemes in that Member State and insurance companies operating in that Member State under the freedom to provide services the choice of appointing a tax representative or carrying out the tasks themselves, in accordance with the solution which they consider to be the most advantageous from the economic point of view, would be less prejudicial to the freedom to provide services than the general obligation to appoint such a representative imposed by the national legislation at issue.

   (see paras 40, 41, 47, 58, 63, operative part)

3.  A Member State has failed to fulfil its obligations under Article 36 of the European Economic Area Agreement (EEA Agreement) where it adopts national legislation pursuant to which pension funds established in States party to the EEA Agreement which are non-EU members and offering occupational pension schemes in that Member State and insurance companies operating in that Member State under the freedom to provide services are required to appoint a tax representative resident in that Member State.

   Such a restriction to the freedom to provide services is justified by the need to ensure the effectiveness of tax supervision and the prevention of tax avoidance and does not go beyond what is necessary to achieve that objective since the framework of cooperation between the competent authorities of the Member States, established by Directives 77/799 and 2008/55, does not exist between those authorities and the competent authorities of States party to the EEA Agreement which are non-EU members, where the latter have not entered into any undertaking of mutual assistance.

   (see paras 66, 68-71)

Case C‑678/11

European Commission

v

Kingdom of Spain

‛Failure of a Member State to fulfil obligations — Article 56 TFEU and Article 36 of the EEA Agreement — Services offered in Spain by pension funds and insurance companies established in another Member State — Occupational pension schemes — Obligation to designate a tax representative resident in Spain — Restrictive nature — Justification — Effective fiscal supervision and prevention of tax avoidance — Proportionality’

Summary — Judgment of the Court (Fifth Chamber), 11 December 2014

1. Judicial proceedings — Application initiating proceedings — Formal requirements — Identification of the subject-matter of the dispute — Brief summary of the pleas in law on which the application is based — Unambiguous wording of the form of order sought by the applicant

   (Rules of Procedure of the Court of Justice, Art. 38(1)(c))

2. Freedom to provide services — Restrictions — Services offered by pension funds and insurance companies established in another Member State — Obligation to designate a tax representative resident in the State where the services are provided — Restrictive nature — Justification — Effective fiscal supervision and prevention of tax avoidance — Proportionality — None

   (Art. 56 TFEU)

3. International agreements — Agreement establishing the European Economic Area — Freedom to provide services — Restrictions — Services offered by pension funds and insurance companies established in another Member State — Obligation to designate a tax representative resident in the State where the services are provided — Restrictive nature — Justification — Effective fiscal supervision and prevention of tax avoidance — Proportionality — Lawfulness

   (EEA Agreement, Art. 36; Council Directives 77/799 and 2008/55)

1.  See the text of the decision.

   (see paras 14-16, 19)

2.  A Member State has failed to fulfil its obligations under Article 56 TFEU where it adopts national legislation pursuant to which pension funds established in Member States other than that Member State and offering occupational pension schemes in that Member State and insurance companies operating in that Member State under the freedom to provide services are required to appoint a tax representative resident in that Member State.

   The obligation to appoint a tax representative in that Member State constitutes a restriction within the meaning of Article 56 TFEU and is likely to involve additional costs for pension funds established in other Member States offering occupational pension schemes in that Member State, and for insurance companies operating in that Member State under the freedom to provide services. Consequently, that obligation makes the provision of services by those entities to persons residing in that Member State more difficult and less attractive than the provision of similar services to the same persons by entities established in that Member State which are not subject to that obligation. Furthermore, the fact that that representative must reside in that Member State impedes the freedom to provide services for persons and undertakings established in other Member States and wishing to provide tax representation services to entities or natural persons operating in the Member State.

   It is true that the obligations to disclose information and to withhold and pay sums due to the public treasury, which the tax representatives referred to in the legislation at issue must perform for the pension funds and insurance companies established in other Member States, constitute an appropriate means of ensuring the effective collection of the tax due on income paid by the occupational pension schemes.

   However, national legislation giving pension funds established in other Member States and offering occupational pension schemes in that Member State and insurance companies operating in that Member State under the freedom to provide services the choice of appointing a tax representative or carrying out the tasks themselves, in accordance with the solution which they consider to be the most advantageous from the economic point of view, would be less prejudicial to the freedom to provide services than the general obligation to appoint such a representative imposed by the national legislation at issue.

   (see paras 40, 41, 47, 58, 63, operative part)

3.  A Member State has failed to fulfil its obligations under Article 36 of the European Economic Area Agreement (EEA Agreement) where it adopts national legislation pursuant to which pension funds established in States party to the EEA Agreement which are non-EU members and offering occupational pension schemes in that Member State and insurance companies operating in that Member State under the freedom to provide services are required to appoint a tax representative resident in that Member State.

   Such a restriction to the freedom to provide services is justified by the need to ensure the effectiveness of tax supervision and the prevention of tax avoidance and does not go beyond what is necessary to achieve that objective since the framework of cooperation between the competent authorities of the Member States, established by Directives 77/799 and 2008/55, does not exist between those authorities and the competent authorities of States party to the EEA Agreement which are non-EU members, where the latter have not entered into any undertaking of mutual assistance.

   (see paras 66, 68-71)