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Document 62023CC0432

Opinion of Advocate General Kokott delivered on 30 May 2024.


ECLI identifier: ECLI:EU:C:2024:446

Provisional text

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 30 May 2024 (1)

Case C432/23

F,

Ordre des Avocats du Barreau de Luxembourg

v

Administration des contributions directes

(Request for a preliminary ruling from the Cour administrative (Higher Administrative Court, Luxembourg))

(Request for a preliminary ruling – Tax law – Charter of Fundamental Rights of the European Union – Article 7 – Directive 2011/16/EU – Administrative cooperation in the field of taxation – Article 5 – Article 6 – Article 18 – Request for information from the tax authority of another Member State – Information order from the requested tax authority – Surrender of documents by a lawyer – Professional secrecy of a lawyer – Proportionality of surrendering documents relating to services provided in the field of advice on company law)






I.      Introduction

1.        Ensuring uniform and lawful tax enforcement in a globalised world requires cooperation between tax administrations. It was for this reason that, in adopting Directive 2011/16/EU, (2) the EU legislature created a legal basis for cooperation between national tax administrations within the European Union. That directive provides in particular for a cross-border exchange of information.

2.        At the same time, however, such an exchange of information and the enquiries associated with it lead to interference with the fundamental rights of the affected taxpayers and persons obliged to provide information. So it is that the Court has already had to address the protection of fundamental rights in the scope of application of Directive 2011/16 on a number of occasions in the past. (3)

3.        A request for a preliminary ruling from Luxembourg now raises the question as to whether and, if so, under what conditions a tax administration may seek disclosure from a lawyer in the context of an exchange of information on request. In that regard, the Court has already emphasised the importance of protecting the confidentiality of communications between lawyers and their clients in connection with the reporting obligation (4) applicable to cross-border tax arrangements. (5)

4.        The present case presents an opportunity to spell out further what protection legal professional privilege (‘LPP’) enjoys. In particular, it raises the question as to whether advice or representation provided on tax matters can generally be excluded from the protection afforded to LPP under EU law, as it can in Luxembourg law.

II.    Legal framework

A.      European Union law

5.        The exchange of information on request is governed by Section I of Chapter II of Directive 2011/16. Article 1(1) reads:

‘1.      This Directive lays down the rules and procedures under which the Member States shall cooperate with each other with a view to exchanging information that is foreseeably relevant to the administration and enforcement of the domestic laws of the Member States concerning the taxes referred to in Article 2.’

6.        Article 5 of that directive provides:

‘At the request of the requesting authority, the requested authority shall communicate to the requesting authority any information referred to in Article 1(1) that it has in its possession or that it obtains as a result of administrative enquiries.’

7.        In addition, Article 6 of Directive 2011/16 contains rules on the enquiries that may have to be carried out in the requested State:

‘1.      The requested authority shall arrange for the carrying out of any administrative enquiries necessary to obtain the information referred to in Article 5.

2.      The request referred to in Article 5 may contain a reasoned request for an administrative enquiry. If the requested authority takes the view that no administrative enquiry is necessary, it shall immediately inform the requesting authority of the reasons thereof.

3.      In order to obtain the requested information or to conduct the administrative enquiry requested, the requested authority shall follow the same procedures as it would when acting on its own initiative or at the request of another authority in its own Member State.

…’

8.        Article 16 et seq. of Directive 2011/16 lays down general conditions governing administrative cooperation. Article 17(1) and (4) of Directive 2011/16 provides:

‘1.      A requested authority in one Member State shall provide a requesting authority in another Member State with the information referred to in Article 5 provided that the requesting authority has exhausted the usual sources of information which it could have used in the circumstances for obtaining the information requested, without running the risk of jeopardising the achievement of its objectives.

4.      The provision of information may be refused where it would lead to the disclosure of a commercial, industrial or professional secret or of a commercial process, or of information whose disclosure would be contrary to public policy.’

9.        Article 18 of Directive 2011/16 provides:

‘1.      If information is requested by a Member State in accordance with this Directive, the requested Member State shall use its measures aimed at gathering information to obtain the requested information, even though that Member State may not need such information for its own tax purposes. That obligation is without prejudice to paragraphs 2, 3 and 4 of Article 17, the invocation of which shall in no case be construed as permitting a requested Member State to decline to supply information solely because it has no domestic interest in such information.

2.      In no case shall Article 17(2) and (4) be construed as permitting a requested authority of a Member State to decline to supply information solely because this information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.’

B.      Luxembourg law

10.      Article 177 of the Loi générale des impôts du 22 mai 1931 (General Tax Law of 22 May 1931; ‘the Luxembourg Tax Code’) provides in essence:

‘(1)      The following may also refuse to communicate information:

1.      Defence counsel and lawyers who have acted in criminal cases,

2.      Doctors in respect of information entrusted to them in the exercise of their profession,

3.      Lawyers in respect of information entrusted to them in the exercise of their profession[,]

4.      Assistants or collaborators of the persons referred to in points 1 to 3 in respect of facts which they have learned in that capacity.

(2)      This provision shall not be applicable to the persons referred to in points 3 and 4 in respect of facts of which they became aware in connection with advice or representation in tax matters, unless an affirmative or negative response to questions would put their clients at risk of criminal prosecution.’

III. Facts

11.      On 28 June 2022, the Directeur de l’administration des contributions directes (Director of the Direct Taxation Administration, Luxembourg) sent F, a société en commandite simple (limited partnership) (‘the applicant’) a decision (‘the information order’) which was worded in essence as follows:

‘… the competent authority of the Spanish tax administration has sent us a request for information pursuant to … Council Directive 2011/16/EU of 15 February 2011 …

The legal person to which the request relates is the Spanish company K …

Could you please provide, for the period from 1 January 2016 to 31 December 2019, the following information and documents no later than 3 August 2022:

– Please provide all available documentation for the period in question (engagement letter, contracts with the client, reports, memoranda, communications, invoices etc.) relating to services provided by [your company] F to the Spanish company K in connection with:

1.      the acquisition in 2015 of 80% of the shares in [N] by the investment group [O] (invoice No …);

2.      the acquisition of another Spanish undertaking by the group in 2018 (invoice No …);

– Please provide a detailed description of the manner in which the abovementioned operations were conducted, from the time when the services of [F] were engaged until their completion, as well as an explanation of its involvement in those processes and the identity of its interlocutors (vendors, buyers and third parties) and invoices; …’

12.      By email of 8 July 2022, F informed the Direct Taxation Administration that it had acted as lawyer/legal counsel for the group to which K belongs, and that it was therefore prevented by law from communicating information concerning its client in so far as that information was covered by its LPP.

13.      In a letter sent by registered post on 8 August 2022, F reaffirmed its position, stating that the instruction from its client in the case to which the decision relates did not cover tax matters but concerned only company law.

14.      By letter sent by registered post of 19 August 2022, the Director of the Direct Taxation Administration informed the applicant that that response was not satisfactory. Thereafter, by decision of 16 September 2022, it imposed on the applicant a fine for failing to comply with the information order.

15.      The applicant challenged that decision before the national courts by way of an action in which the Ordre des Avocats du Barreau de Luxembourg (Luxembourg Bar) participated as an intervener. By decision of 23 February 2023, the Tribunal administratif (Administrative Court, Luxembourg) dismissed the action and the intervention.

16.      By applications received on 10 and 13 March 2023, the applicant and the Bar lodged an appeal against that judgment with the Cour administrative (Higher Administrative Court).

IV.    Request for a preliminary ruling

17.      The court with jurisdiction to hear and determine the main proceedings, the Cour administrative (Higher Administrative Court), decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling under Article 267 TFEU:

‘(1)      Does legal advice provided by a lawyer on matters of company law – in this case on setting up a corporate investment structure – fall within the scope of the strengthened protection of exchanges between lawyers and their clients afforded by Article 7 of the Charter?

(2)      If the first question is answered in the affirmative, does a decision by the competent authority of a requested Member State adopted in response to a request from another Member State in the context of an exchange of information on request on the basis of Directive 2011/16, ordering a lawyer to provide it, broadly speaking, with all available documentation relating to its relations with its client, a detailed description of the operations on which it advised and an explanation of its involvement in those processes and the identity of its interlocutors, constitute an interference with the right to respect for communications between lawyers and their clients, guaranteed in Article 7 of the Charter?

(3)      If the second question is answered in the affirmative, does Directive 2011/16 comply with Articles 7 and 52(1) of the Charter in so far as it does not include, beyond Article 17(4), any provision which formally permits interference with the confidentiality of exchanges between lawyers and their clients in the context of the system of exchange of information on request and which itself defines the scope of the limitation on the exercise of the right in question?

(4)      If the third question is answered in the affirmative, can the arrangements relating to the duty of cooperation of lawyers (or of a law firm) as third parties holding information in the context of the application of the mechanism for the exchange of information on request established by Directive 2011/16, in particular specific limitations to take into account the effect of their legal professional privilege, be governed by the provisions of domestic law of each Member State regulating the duty of cooperation of lawyers, as third parties, in a tax investigation in the context of the application of domestic tax legislation in accordance with the reference made by Article 18(1) of that directive?

(5)      If the fourth question is answered in the affirmative, in order to comply with Article 7 of the Charter, must a national legal provision establishing the arrangements relating to the duty of cooperation of lawyers as third parties holding information, like that applicable in the present case, include specific provisions which:

–      ensure respect for the essence of the confidentiality of the communications between lawyers and their clients; and

–      introduce specific conditions to ensure that the lawyer’s obligation to cooperate is reduced to what is appropriate and necessary for the achievement of the objective of Directive 2011/16?

(6)      If the fifth question is answered in the affirmative, must the specific conditions to ensure that cooperation by lawyers with the tax investigation is reduced to what is appropriate and necessary for the achievement of the objective of Directive 2011/16 include the obligation for the competent authority of the requested Member State:

–      to carry out an enhanced check of whether the requesting Member State has, beforehand, actually exhausted the usual sources of information which it could have used in the circumstances for obtaining the information requested, without running the risk of jeopardising the achievement of those objectives, in accordance with Article 17(1) of Directive 2011/16; and/or

–      to have, beforehand, unsuccessfully contacted other potential information holders in order to be able, as a last resort, to contact a lawyer in his or her capacity as a potential information holder; and/or

–      properly to balance, in each individual case, the objective of general interest against the rights at issue in such a manner that a decision ordering that information be provided could validly be issued in respect of a lawyer only if additional conditions are met, such as the requirement that the financial implications of the ongoing check in the requesting State reach or are likely to reach a certain significance or are likely to fall within the scope of criminal law?’

18.      In the proceedings before the Court of Justice, written observations have been lodged by the applicant, the Luxembourg Bar, the Grand Duchy of Luxembourg, the Federal Republic of Germany, the Republic of Austria, the Kingdom of Spain, the Council of the European Union and the European Commission. In accordance with Article 76(2) of its Rules of Procedure, the Court has decided not to hold a hearing.

V.      Legal assessment

19.      The Republic of Austria takes the view that the Court does not have jurisdiction to give a preliminary ruling, since the questions referred are concerned not with the interpretation of EU law but only with Luxembourg law. This is unconvincing. The questions raised by the Luxembourg court relate expressly to the interpretation of the Charter of Fundamental Rights of the European Union (‘the Charter’) and to the interpretation and application of Directive 2011/16. For that reason, the Court of Justice has jurisdiction to answer the request for a preliminary ruling. (6)

A.      The first two questions referred for a preliminary ruling

20.      By its first two questions, which must be answered together, the referring court wishes to ascertain, in essence, whether a decision ordering a lawyer, as information holder, to release information in the context of an exchange of information on request leads to interference with the right to respect for communications between lawyers and their clients (Article 7 of the Charter) or whether certain fields such as advice on company law are excluded from that right.

1.      The scope of the protection afforded by LPP

21.      In accordance with Article 7 of the Charter, everyone has the right to respect for his or her private and family life, home and communications. That provision corresponds to Article 8(1) of the Convention for the Protection of Human Rights and Fundamental Freedoms (‘the ECHR’). In accordance with Article 52(3) of the Charter, the Court of Justice must therefore also take into account, when interpreting Article 7 of the Charter, Article 8(1) ECHR, as interpreted by the European Court of Human Rights (‘the ECtHR’), as the minimum standard of protection. (7)

22.      Article 8(1) ECHR and Article 7 of the Charter afford special protection to LPP. This is justified in particular by the fact that lawyers are assigned a fundamental role in a democratic society, that of defending litigants. (8) It follows from this, on the one hand, that an individual must be able, without constraint, to consult a lawyer in order to obtain independent legal advice from him or her.

23.      On the other hand, the lawyer must act in good faith towards his or her client. (9) It is in the nature of the professional activity of a lawyer that his or her client should disclose secrets to him or her and that the lawyer should receive other confidential communications. The client can reasonably expect that those communications will remain private and confidential. (10) If the confidentiality of information is not guaranteed, there can be no trust. (11) Consequently, professional secrecy is not only a fundamental right but also a fundamental duty of lawyers. (12)

24.      After all, lawyers are not only representatives of their clients’ interests but also independent collaborators in the interests of justice. (13) Consequently, LPP protects not only the individual interests of lawyers and their clients but also the public interest in justice being administered in such a way as to fulfil the requirements of the rule of law. Thus, the special protection afforded by LPP is also an expression of the principle of the rule of law on which the European Union is founded, in accordance with Article 2 TEU.

25.      It follows that the protection of LPP is comprehensively guaranteed by the Charter. (14) Article 7 of the Charter protects LPP in relation to any legal advice, with regard to both its content and its existence. (15)

26.      Since it is therefore impossible to draw distinctions between the various fields of law – as Luxembourg has done in this case – when determining the scope of the protection afforded by LPP, that protection extends to legal advice in the field of company and tax law, too. In particular, advice on the establishment of a corporate investment structure such as that at issue here also falls within the scope of the protection afforded by LPP.

27.      Finally, Article 7 of the Charter applies ratione personae too. In this case, the applicant and the taxpayers are companies. It is true that the Court has held that ‘legal persons can claim the protection of Articles 7 and 8 of the Charter … only in so far as the official title of the legal person identifies one or more natural persons’. (16) However, that distinction concerns only the processing of personal data under Article 8 of the Charter. (17)

28.      Conversely, legal persons too can rely on the right to respect for private life that is protected by Article 7 of the Charter. (18) This must be particularly true of the protection of communications, likewise protected by Article 7 of the Charter, in particular LPP. The decisive criterion, after all, must be whether a fundamental right is by its nature applicable to companies too. This has to be so in the case of the protection of LPP. The object of protection, after all, is the relationship of trust between lawyers and their clients. Such a relationship also exists between the lawyers brought together within a company, on the one hand, and their clients or their clients’ agents, on the other. The legal form within which the lawyer or the client acts is immaterial in this regard.

29.      Consequently, the answer to the first question referred for a preliminary ruling is that advice provided by a law firm on matters of company law – in this case on setting up a corporate investment structure – falls within the scope of the protection of LPP as guaranteed by Article 7 of the Charter.

2.      Whether the information order interferes with Article 7 of the Charter

30.      By its second question, the referring court wishes to ascertain whether a decision ordering a lawyer, as information holder, to produce certain documents constitutes interference with the LPP protected by Article 7 of the Charter.

31.      In the present case, the Luxembourg tax administration requires the applicant to produce ‘all available documents’ concerning services which it has provided to its client (company K) in connection with the acquisition of two undertakings. In addition, the applicant is instructed, inter alia, to provide a ‘detailed description of the manner in which the abovementioned operations were conducted’, and of the persons involved.

32.      Were the applicant to comply with the information order, therefore, the Luxembourg tax administration would necessarily gain knowledge of much of the content of the advice exchanged between the applicant and company K. The information order thus leads to interference with the right to respect for communications between lawyers and their clients that is guaranteed by Article 7 of the Charter.

33.      What is more, there would be further interference if the Luxembourg tax administration went on to share the information obtained via the information order with the Spanish tax administration. For, in this event, the Spanish tax administration too would gain knowledge of the existence and the content of the legal advice provided.

34.      Consequently, the answer to the second question referred for a preliminary ruling is that a decision of the tax authority ordering a law firm to disclose information in the context of an exchange of information on request whereby that authority calls for the production of all documentation relating to the advice given to a client in connection with certain transactions and its involvement in those transactions constitutes interference with the right to respect for communications between lawyers and their clients that is guaranteed by Article 7 of the Charter.

35.      In the interests of providing a useful answer, I would also make the point that it falls to the referring court, in the context of the action brought by the applicant against the imposition of a fine for failing to comply with the information order, to examine also whether the interference by the Luxembourg tax administration is justified. This presupposes, inter alia, that the information order is lawful. (19) The Commission has rightly expressed doubts in that regard. After all, since the information order called for the production of ‘all available documentation’, it is not immediately apparent that the information is foreseeably relevant, for example. (20)

B.      The third and fourth questions referred for a preliminary ruling

36.      By the third and fourth questions, which are also to be answered together, the referring court wishes to ascertain, in essence, who in the relationship between the European Union and the Member State – in this case, therefore, Luxembourg – is entitled and obliged to lay down the material and formal conditions under which interference with Article 7 of the Charter may lawfully occur. The issue, therefore, is where the responsibility for protecting LPP lies.

37.      That question arises because, in Article 17(4) of Directive 2011/16, the EU legislature provided only that the provision of information may be refused where it would lead to the disclosure of a professional secret. The referring court obviously has doubts as to whether that provision satisfies the requirements of Article 7 and Article 52(1) of the Charter. If that were not the case, Directive 2011/16 might be invalid in that regard.

38.      This nonetheless presupposes that Directive 2011/16 itself interferes with Article 7 of the Charter. In accordance with the third paragraph of Article 288 TFEU, however, every directive must go on to be transposed into national law. In principle, the national transposing law alone has direct effect on the persons concerned. Consequently, the interference with fundamental rights would be primarily attributable to the Member State – in this instance, therefore, Luxembourg.

39.      Where, however, a directive leaves the Member State no discretion with respect to its transposition, the interference is attributable not to the Member State but to the EU legislature. In that event, EU law itself would be in breach of the Charter. The reporting obligation applicable in the case of cross-border tax arrangements, laid down by the EU legislature in Article 8ab(1) of Directive 2011/16 and cited by a number of the parties to the proceedings, can be mentioned as an example of this. It is true that that provision requires transposition into national law in order to be directly effective in relation to the intermediaries concerned. However, since the Member States have no discretion with respect to its transposition, the interference with fundamental rights is ultimately attributable to the EU legislature. The latter therefore has an obligation to protect LPP. As this was not sufficiently so in the case of lawyer-intermediaries, the Court declared the second sentence of Article 8ab(5) of Directive 2011/16 to be invalid. (21)

40.      The present case, on the other hand, concerns enquiries in the context of an exchange of information on request. In that regard, it follows from Article 5, Article 6(1) and Article 18(1) of Directive 2011/16 that the requested Luxembourg authority may be obliged to carry out administrative enquiries. The specific enquiries are governed, however, by national procedural law (Article 6(3) of Directive 2011/16). Accordingly, the Luxembourg tax administration adopted the information order in respect of the applicant on the basis of Luxembourg procedural law.

41.      It is true that, in the present case, it is EU law that calls for national enquiries and, thus, interference with fundamental rights. However, the interference with fundamental rights is itself brought about only by the Luxembourg law adopted in transposition of Directive 2011/16 and the information order of 28 June 2022 based on it. Consequently, Luxembourg, which, in transposing and applying Directive 2011/16, implements EU law and is thus, in accordance with the first sentence of Article 51(1) of the Charter, bound by the fundamental rights of the European Union, (22) must ensure the protection of LPP that is provided for in Article 7 of the Charter.

42.      Article 17(4) of Directive 2011/16 gives the requested Member State the freedom necessary to do so. In particular, information which is subject to professional secrecy does not have to be provided. Furthermore, the directive does not compel Luxembourg, as the requested Member State, to carry out enquiries which would be contrary to its legislation (Article 17(2) of Directive 2011/16). In that regard, therefore, the validity of Directive 2011/16 is not open to question.

43.      Contrary to the view expressed by Luxembourg and Spain, however, the fact that the directive takes as its point of reference national procedural law is not in itself unproblematic. The reporting obligation applicable in the case of cross-border tax arrangements may once again serve as an example (see the comment already made in that regard in point 39 above). It is true that Article 8ab(5) of Directive 2011/16 too – much like Article 17(4) thereof – gives Member States the option to exempt intermediaries from the reporting obligation where this would otherwise breach legal professional privilege under national law. This means, however, that LPP enjoys no protection where the national legislation does not make any provision for it.

44.      This is illustrated by the present case too. Because, in accordance with Article 177(2) of the Luxembourg Tax Code, lawyers have no right to refuse to provide information in tax matters, Luxembourg could not exempt lawyers from their reporting obligation under Article 8ab(1) of Directive 2011/16. It therefore seems doubtful whether the first sentence of Article 8ab(5) of Directive 2011/16 satisfies the requirements of Article 7 of the Charter.

45.      The answer to the third question is therefore that Directive 2011/16 is compatible with Article 7 and Article 52(1) of the Charter, in so far as it does not include, beyond Article 17(4), any provision which formally permits interference with the confidentiality of exchanges between lawyers and their clients in the context of the system of exchange of information on request and which itself defines the scope of the limitation on the exercise of the right in question.

46.      The answer to the fourth question is that the national legislation of each Member State can and must stipulate the conditions, the scope and the limits of the duty to cooperate incumbent on lawyers, as information holders, in the context of the exchange of information on request under Directive 2011/16.

C.      The fifth and sixth questions referred for a preliminary ruling

47.      By its fifth and sixth questions, which are also to be answered together, the referring court wishes to ascertain, in essence and in a somewhat abstract manner, what requirements EU law attaches to national legislation imposing a duty to cooperate on lawyers, as information holders, in order to ensure that that legislation is compatible with Article 7 of the Charter.

48.      The background to that question is that the right to refuse to disclose information which lawyers enjoy under Article 177(2) of the Luxembourg Tax Code does not apply in relation to facts which have come to their knowledge in the course of advice or representation given in tax matters. A reverse exception applies only in the case of questions affirmative or negative answers to which would expose lawyers’ clients to the risk of criminal prosecution.

49.      As I have already explained, any obligation on a lawyer to disclose information concerning a relationship with a client leads to interference with the right to respect for communications between lawyers and their clients that is protected by Article 7 of the Charter. The decisive question, therefore, is whether and, if so, under what conditions such interference can be justified. Any such justification must respect both the principle of proportionality and the essence of the fundamental right concerned, in accordance with Article 52(1) of the Charter. (23)

1.      The essence of LPP

50.      Article 177(2) of the Luxembourg Tax Code excludes outright a general right to refuse to disclose information shared in the context of advice or representation provided in tax matters. This has the effect of undermining the protection of LPP that is guaranteed even in the case of advice on tax law.

51.      On the other hand, the Luxembourg provision protects a lawyer’s right to refuse to disclose information shared in the context of any legal advice provided in any other fields of law. What is more, even in matters of tax law, there is a right to refuse to disclose information at least in the case of questions affirmative or negative answers to which would expose the client to a risk of criminal prosecution. To this extent, LPP enjoys at least some protection under Article 7 of the Charter.

52.      These considerations show that the abstract determination of an inviolable essence presents difficulties, at least in the case of fundamental freedoms such as Article 7 of the Charter. (24) The question of the proportionality of the interference with fundamental rights is therefore more meaningful.

2.      Proportionality

53.      In accordance with the second sentence of Article 52(1) of the Charter, limitations must meet objectives of general interest recognised by the Union. The exchange of information on request pursues such an objective. According to the first recital of the underlying Directive 2011/16, after all, such exchanges are intended to ensure the correct assessment of tax due and to combat tax evasion and tax fraud. These are legitimate objectives within the meaning of Article 52(1) of the Charter. (25)

(a)    Necessity of the measure

54.      Furthermore, Member States must limit any interference with the fundamental right to respect for communications between lawyers and their clients in the context of an exchange of information on request to what is necessary. (26) In particular, the objectives of correctly assessing tax due and combating tax evasion and tax fraud must not be achievable in an equally effective manner by other means less prejudicial to LPP.

55.      It follows from this, first, that enquiries in the requested State (in this case, Luxembourg) are in principle always subordinate to those carried out in the requesting State (in this case, Spain). After all, any cross-border exchange of information leads to additional interference with the fundamental rights of the affected taxpayers and persons obliged to provide information. Accordingly, Article 17(1) of Directive 2011/16 itself provides that the requesting authority must have exhausted all of the usual sources of information which it could have used in the circumstances for obtaining the requested information. (27) If that is not the case, the information order issued by the Luxembourg tax administration on 28 June 2022 would not even be necessary.

56.      As the requested authority, therefore, the Luxembourg tax administration must ensure that the requesting Spanish authority has exhausted its own avenues of enquiry to no avail. Even though the requested authority is not always able to verify this, it must, before seeking disclosure from a lawyer, at least obtain confirmation from the requesting authority that all enquiries have been exhausted in the requesting State.

57.      In addition, the necessity prescribed by the second sentence of Article 52(1) of the Charter presupposes that, in the requested State too (that is to say, in this case, Luxembourg), there is no equally suitable means of achieving the objective pursued that is less restrictive for the person concerned (that is to say, in this case, the applicant). It is for the referring court to examine this on a case-by-case basis.

(b)    The appropriateness of the measure

58.      Finally, in order to be able to examine whether the legislation is appropriate, it is necessary to determine how serious the interference with the fundamental rights concerned is, and to consider whether the objective in the general interest pursued by that interference is proportionate to its seriousness. (28) In so doing, the requested Member State (that is to say, in this case, Luxembourg) must take into account the special importance that attaches to lawyers, as independent collaborators in the interests of justice, in a State governed by the rule of law (see the comments already made in that regard in point 22 et seq.). The fact that LPP protects not only individual interests (in this case, those of the applicant and of taxpayers) but also the interests of the general public operates in favour of LPP in the context of the necessary balancing of benefits.

59.      It follows from this that the Luxembourg tax administration, as the requested authority, may only exceptionally recover from the applicant, as a law firm, information relating to instructions from its clients. Even if all other enquiries have been exhausted, seeking disclosure from the applicant, as the information holder, is not automatically permissible. In the light of the importance of LPP, after all, fact-finding enquiries cannot be conducted at any price.

60.      However, not all information that comes to the knowledge of a lawyer, as an individual, is subject to the special protection of LPP. Rather, that protection covers only information shared in the context of an activity involving the provision of legal advice as part of a specific instruction. In addition, however, lawyers may engage in commercial practice too, as part of a management consultancy firm, for example. To the extent that they do, lawyers do not practise as independent collaborators in the interests of justice. (29) By extension, therefore, information obtained in that context does not require the same protection as information obtained as part of the provision of legal advice.

61.      What is more, those principles apply not only to lawyers but also to tax advisers and other groups of professionals, in so far as these, as independent collaborators in the interests of justice, are treated in the same way as lawyers under the relevant national law and are therefore authorised to give legal advice to clients and represent them in court. (30)

62.      Finally, the Luxembourg tax administration, as the requested authority, must be able to take into account the seriousness of the interference in its individual decisions too. Where, as in this case, recovery of ‘all available documentation’ is sought, it is doubtful whether the information order issued to the lawyer will continue to be proportionate to the objective pursued.

63.      In conclusion, national law must therefore establish the conditions, the scope and the limits of the duty to cooperate incumbent on lawyers as information holders. In so doing, national law must, in particular, enable the requested authority to strike a balance in the individual case concerned between the general interest in the correct assessment of the tax due and combating tax evasion and tax fraud, on the one hand, and the protection of LPP, on the other.

64.      Consequently, national legislation under which advice and representation provided by a lawyer in tax matters other than criminal tax law does not generally fall within the scope of the protection of LPP, and which does not therefore allow for any balancing of interests on a case-by-case basis either, is contrary to Article 7 of the Charter.

VI.    Conclusion

65.      I therefore propose that the Court answer the questions referred by the Cour administrative (Higher Administrative Court, Luxembourg) as follows:

(1)      Legal advice provided by a law firm, even on matters of company law – for example on setting up a corporate investment structure – falls within the scope of the protection afforded by legal professional privilege as guaranteed by Article 7 of the Charter of Fundamental Rights of the European Union (‘the Charter’).

(2)      A decision of the competent tax authority ordering a law firm to disclose information in the context of an exchange of information on request whereby that authority, broadly speaking, calls for the production of all documentation relating to certain transactions and its involvement in those transactions constitutes interference with the right to respect for communications between lawyers and their clients that is guaranteed by Article 7 of the Charter.

(3)      Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC is compatible with Article 7 and Article 52(1) of the Charter, in so far as it does not include, beyond Article 17(4), any provision which formally permits interference with the confidentiality of exchanges between lawyers and their clients in the context of the system of exchange of information on request and which itself defines the scope of the limitation on the exercise of the right in question. This is because Article 17(4) of Directive 2011/16 gives the Member States sufficient discretion to fulfil the requirements of Article 7 of the Charter.

(4)      The national legislation of each Member State can and must stipulate the conditions, the scope and the limits of the duty to cooperate incumbent on lawyers, as information holders, in the context of the exchange of information on request under Directive 2011/16. In so doing, national law must, in particular, enable the competent authority to strike a balance on a case-by-case basis between the objectives in the general interest, on the one hand, and the protection afforded by legal professional privilege, on the other. Since Luxembourg law does not allow for such a balance to be struck in matters of tax law, Article 7 of the Charter precludes the application of the national law to that extent.


1      Original language: German.


2      Council Directive of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ 2011 L 64, p. 1).


3      See judgments of 25 November 2021, État luxembourgeois (Information on a group of taxpayers) (C‑437/19, EU:C:2021:953); of 6 October 2020, État luxembourgeois (Right to bring an action against a request for information in tax matters) (C‑245/19 and C‑246/19, EU:C:2020:795); and of 16 May 2017, Berlioz Investment Fund (C‑682/15, EU:C:2017:373).


4      Introduced by Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (OJ 2018 L 139, p. 1).


5      Judgment of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963).


6      On a comparable situation, see judgment of 6 October 2020, État luxembourgeois (Right to bring an action against a request for information in tax matters) (C‑245/19 and C‑246/19, EU:C:2020:795, paragraph 46).


7      Judgment of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963, paragraph 26).


8      See ECtHR, judgment of 6 December 2012, Michaud v. France, (CE:ECHR:2012:1206JUD001232311, §§ 118 and 119), and, in line with this, Court of Justice, judgment of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963, paragraph 28).


9      Judgment of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963, paragraph 28).


10      ECtHR, judgment of 9 April 2019, Altay v. Turkey (No 2) (CE:ECHR:2019:0409JUD001123609, § 49) and, in line with this, Court of Justice, judgment of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963, paragraph 27).


11      See the CCBE-Berufsregeln für Rechtsanwälte der EU (CCBE Rules of Professional Practice for Lawyers in the EU), paragraph 2.3.1, available at Berufsregeln_Mai 2006_090615.pdf (brak.de).


12      See the CCBE-Berufsregeln für Rechtsanwälte der EU (CCBE Rules of Professional Practice for Lawyers in the EU), paragraph 2.3.1, available at Berufsregeln_Mai 2006_090615.pdf (brak.de).


13      To that effect, judgments of 24 March 2022, PJ and PC v EUIPO (C‑529/18 P and C‑531/18 P, EU:C:2022:218, paragraph 65); of 14 September 2010, Akzo Nobel Chemicals and Akcros Chemicals v Commission (C‑550/07 P, EU:C:2010:512, paragraph 42); and of 18 May 1982, AM & S Europe v Commission (155/79, EU:C:1982:157, paragraph 24); see also my Opinion in Akzo Nobel Chemicals and Akcros Chemicals v Commission (C‑550/07 P, EU:C:2010:229, paragraph 48).


14      As regards legal defence before a court, that protection is guaranteed by Article 47 of the Charter. See judgments of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963, paragraphs 60 and 61), and of 26 June 2007, Ordre des barreaux francophones et germanophone and Others (C‑305/05, EU:C:2007:383, paragraphs 31 and 32).


15      Judgment of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963, paragraph 27).


16      Judgment of 9 November 2010, Volker und Markus Schecke and Eifert (C‑92/09 and C‑93/09, EU:C:2010:662, paragraph 53).


17      See judgment of 17 December 2015, WebMindLicenses (C‑419/14, EU:C:2015:832, paragraphs 79 and 80).


18      See expressly to this effect, inter alia, judgment of 14 February 2008, Varec (C‑450/06, EU:C:2008:91, paragraph 48).


19      Judgments of 25 November 2021, État luxembourgeois (Information on a group of taxpayers) (C‑437/19, EU:C:2021:953, paragraph 89), and of 16 May 2017, Berlioz Investment Fund (C‑682/15, EU:C:2017:373, paragraph 56).


20      The Court has already specified the conditions governing the legality of such an information order: on the foreseeable relevance of the information requested, see judgments of 25 November 2021, État luxembourgeois (Information on a group of taxpayers) (C‑437/19, EU:C:2021:953, paragraph 41), and of 16 May 2017, Berlioz Investment Fund (C‑682/15, EU:C:2017:373, paragraph 41); on the requirement to state reasons, see judgment of 25 November 2021, État luxembourgeois (Information on a group of taxpayers) (C‑437/19, EU:C:2021:953, paragraph 93).


21      Judgment of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963, paragraph 66).


22      See, inter alia, judgment of 6 October 2020, État luxembourgeois (Right to bring an action against a request for information in tax matters) (C‑245/19 and C‑246/19, EU:C:2020:795, paragraph 46).


23      In accordance with the case-law of the Court, the two must be examined cumulatively and independently of each other. See judgment of 9 November 2010, Volker und Markus Schecke and Eifert (C‑92/09 and C‑93/09, EU:C:2010:662, paragraph 50); with specific regard to the essence of Article 7 of the Charter, see judgments of 6 October 2015, Schrems (C‑362/14, EU:C:2015:650, paragraph 94), and of 8 April 2014, Digital Rights Ireland and Others (C‑293/12 and C‑594/12, EU:C:2014:238, paragraph 39).


24      The position may be otherwise in the case, for example, of judicial fundamental rights. See, in connection with Article 47 of the Charter, judgments of 20 April 2023, DIGI Communications (C‑329/21, EU:C:2023:303, paragraph 47), and of 20 April 2021, Repubblika (C‑896/19, EU:C:2021:311, paragraph 51).


25      On the prevention of tax evasion and tax fraud, 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); on the correct assessment of value added tax (VAT), judgment of 26 January 2006, Commission v Council (C‑533/03, EU:C:2006:64, paragraph 52).


26      See judgment of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963, paragraph 42).


27      That provision has the effect of protecting the requested authority from the submission of excessive requests.


28      With specific regard to Article 7 of the Charter, judgment of 8 December 2022, Orde van Vlaamse Balies and Others (C‑694/20, EU:C:2022:963, paragraph 41 and the case-law cited).


29      As regards in-house lawyers, see also judgment of 14 September 2010, Akzo Nobel Chemicals and Akcros Chemicals v Commission (C‑550/07 P, EU:C:2010:512, paragraph 44), and my Opinion in Akzo Nobel Chemicals and Akcros Chemicals v Commission (C‑550/07 P, EU:C:2010:229, point 52 et seq.).


30      See also, inter alia, the Opinion of Advocate General Emiliou in Belgian Association of Tax Lawyers and Others (C‑623/22, EU:C:2024:189, point 219).

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