Case C‑105/14

Criminal proceedings

against

Ivo Taricco and Others

(Request for a preliminary ruling from the Tribunale di Cuneo)

‛Reference for a preliminary ruling — Criminal proceedings concerning offences in relation to value added tax (VAT) — Article 325 TFEU — National legislation laying down absolute limitation periods which may give rise to impunity in respect of offences — Potential prejudice to the financial interest of the European Union — Obligation, for the national court, to disapply any provision of national law liable to affect fulfilment of the Member States’ obligations under EU law’

Summary — Judgment of the Court (Grand Chamber), 8 September 2015

1. Questions referred for a preliminary ruling — Jurisdiction of the Court — Limits — Questions which are manifestly irrelevant, hypothetical questions put in a context precluding a useful answer and questions bearing no relation to the purpose of the main proceedings

   (Art. 267 TFEU)

2. Own resources of the European Union — Protection of the European Union’s financial interests — Fight against fraud and other unlawful activities — Obligation for the Member States to establish effective and dissuasive penalties — Scope — Tax offences in the field of value added tax — National legislation laying down a limitation of the total duration of the limitation period in criminal law in the event of interruption of that period and possibly giving rise to impunity in numerous cases — Unlawful — Verification a matter for the national court

   (Art. 4(3) TEU; Art. 325(1) and (2) TFEU; Council Directive 2006/112)

3. Own resources of the European Union — Protection of the European Union’s financial interests — Fight against fraud and other unlawful activities — Obligation for the Member States to establish effective and dissuasive penalties — Scope — Tax offences in the field of value added tax — Assessment by the national court of the compliance of a limitation system restricting the extension of limitation periods following interruption — Articles 101 TFEU, 107 TFEU and 119 TFEU not applicable

   (Art. 4(3) TEU; Arts 101 TFEU, 107 TFEU, 119 TFEU and 325 TFEU)

1.  See the text of the decision.

   (see paras 29, 30)

2.  A national rule in relation to limitation periods for criminal offences which provides that the interruption of criminal proceedings concerning serious fraud in relation to value added tax has the effect of extending the limitation period by only a quarter of its initial duration is liable to have an adverse effect on fulfilment of the Member States’ obligations under Article 325(1) and (2) TFEU if that national rule prevents the imposition of effective and dissuasive penalties in a significant number of cases of serious fraud affecting the financial interests of the European Union, or provides for longer limitation periods in respect of cases of fraud affecting the financial interests of the Member State concerned than in respect of those affecting the financial interests of the European Union, which it is for the national court to verify. The national court must give full effect to Article 325(1) and (2) TFEU, if need be by disapplying the provisions of national law the effect of which would be to prevent the Member State concerned from fulfilling its obligations under Article 325(1) and (2) TFEU.

   In relation to VAT, it follows from Directive 2006/112, read in conjunction with Article 4(3) TEU, that Member States are not only under a general obligation to take all legislative and administrative measures appropriate for ensuring collection of all the VAT due on their territory, but must also fight against tax evasion. Although the Member States have freedom to choose the applicable penalties — which may take the form of administrative penalties, criminal penalties or a combination of the two — in order to ensure that all VAT revenue is collected and, in so doing, that the financial interests of the European Union are protected in accordance with the provisions of Directive 2006/112 and Article 325 TFEU, criminal penalties may nevertheless be essential to combat certain serious cases of VAT evasion in an effective and dissuasive manner.

   (see paras 36, 39, 58, operative part 1)

3.  A limitation system applicable to criminal offences in relation to value added tax which lays down absolute limitation periods that cannot be extended, in the event of interruption, by more than a quarter of their initial duration cannot be assessed in the light of Articles 101 TFEU, 107 TFEU and 119 TFEU.

   First, a potentially inadequate enforcement of national criminal law provisions in relation to VAT does not necessarily promote collusive conduct between undertakings, contrary to Article 101 TFEU, read in conjunction with Article 4(3) TEU. Secondly, although the ineffective and/or non-dissuasive nature of penalties laid down in relation to VAT may potentially give a financial advantage to the undertakings concerned, Article 107 TFEU is nevertheless not applicable in the present case, since all the transactions are subject to the VAT system and any offence committed in relation to VAT is punishable under criminal law, except in the specific cases in which the rules on limitation periods might eliminate the penal consequences of certain offences. Thirdly, the question whether the provisions of national law at issue that may give rise to impunity in respect of certain offences relating to VAT comply with the principle of sound public finances does not fall within the scope of Article 119 TFEU, since it is only very indirectly linked to that obligation on the Member States.

   (see paras 60, 62, 64, 65, operative part 2)