Opinions nº C-454/18 of Tribunal de Justicia, November 14, 2019

Resolution Date:November 14, 2019
Issuing Organization:Tribunal de Justicia
Decision Number:C-454/18
SUMMARY

Remisión prejudicial - Fiscalidad directa - Libre circulación de capitales - Movimientos de capitales entre los Estados miembros y terceros países - Impuesto sobre sociedades - Fondos de pensiones residentes y no residentes - Tributación de los dividendos derivados de paquetes de acciones - Retención en origen - Deducción íntegra, del impuesto sobre sociedades, de dicha retención en origen -... (see full summary)

 
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(Cross border exchanges in electricity - Regulation (EC) No 714/2009 - Undertaking which merely operates an interconnector - Notion of transmission system operator - Use of the revenues resulting from the allocation of interconnection)

  1. The present case concerns the interpretation of Regulation (EC) No 714/2009, (2) which regulates access to the infrastructure necessary for cross-border exchanges in electricity and, in particular, lays down rules for the financing of that infrastructure.

  2. The dispute arose from a decision in which the Swedish regulatory authority, namely the Energimarknadsinspektionen (Swedish Energy Markets Inspectorate) (‘the EI’), (3) requested the operator of the Baltic Cable - a high-voltage electricity cable, otherwise known as an interconnector, that connects the Swedish electricity transmission system to the transmission system in the north-west of Germany - to place its so-called congestion revenues on a separate internal account line, thereby preventing that operator, namely Baltic Cable AB (‘BCAB’), from using those revenues freely.

  3. Congestion is a situation in which the capacity of an interconnection between two national transmission systems is insufficient to accommodate all transactions resulting from international trade by market operators. (4) Congestion occurs because of a lack of capacity of interconnectors and/or of the national transmission systems concerned. A recent study reiterated the urgent need for more interconnection capacity in the EU. (5) 4. Where there is congestion, non-discriminatory, market-based solutions must be applied to address the problem. (6) Therefore, the available capacity must be auctioned. (7) The price for the auctioned capacity corresponds, in principle, to the wholesale electricity price difference between the two connected transmission systems. That difference, or congestion income, accrues to the operator of the interconnector. (8) Congestion may thus lead to high profits for that operator.

  4. Congestion revenues cannot, however, be used freely by the operator of the interconnector. The first subparagraph of Article 16(6) of Regulation No 714/2009 requires that those revenues be used either to guarantee the actual availability of the allocated capacity, or to maintain or increase interconnection capacities through network investments, in particular in new interconnectors. If congestion revenues cannot be used for any of these two purposes, they may be used, up to a maximum amount to be decided by the regulatory authorities of the Member States concerned, to lower network tariffs. The remaining revenues must be placed on a separate internal account line until they can be spent on the two purposes mentioned above.

  5. In the present case, the EI decided that BCAB could not use congestion revenues to cover the costs of operation and maintenance of the Baltic Cable because those costs were not incurred to guarantee the actual availability of the allocated capacity or to maintain or increase interconnection capacities through network investments. BCAB was thus requested to place those revenues on a separate internal account line until they could be used for those purposes.

  6. The Court is called upon to interpret for the first time Article 16(6) of Regulation No 714/2009 (9) by way of reference from the Förvaltningsrätten i Linköping (Administrative Court, Linköping, Sweden). It is asked to decide whether congestion revenues may be used to cover costs incurred for the operation and maintenance of an interconnector or to distribute profits to the shareholders of that interconnector’s operator. That question is all the more important given that, in the present case, the operation of the interconnector is the sole activity of BCAB. That undertaking claims that the revenues resulting from the allocation of interconnection are its sole source of income, with the result that, were the Court to decide that congestion revenues cannot be used to cover operation and maintenance costs, BCAB would not be able to recover these costs, let alone make a profit. This has led the referring court also to ask the Court whether, if Article 16(6) of Regulation No 714/2009 is to be interpreted as precluding the use of congestion revenues to cover operation and maintenance costs and to make a profit, that provision is valid and whether, in particular, it is consistent with the principle of proportionality.

    1. Legal framework

  7. Article 16(6) of Regulation No 714/2009 provides:

    ‘Any revenues resulting from the allocation of interconnection shall be used for the following purposes:

    (a) guaranteeing the actual availability of the allocated capacity; and/or

    (b) maintaining or increasing interconnection capacities through network investments, in particular in new interconnectors.

    If the revenues cannot be efficiently used for the purposes set out in points (a) and/or (b) of the first subparagraph, they may be used, subject to approval by the regulatory authorities of the Member States concerned, up to a maximum amount to be decided by those regulatory authorities, as income to be taken into account by the regulatory authorities when approving the methodology for calculating network tariffs and/or fixing network tariffs.

    The rest of revenues shall be placed on a separate internal account line until such time as it can be spent on the purposes set out in points (a) and/or (b) of the first subparagraph. The regulatory authority shall inform the Agency of the approval referred to in the second subparagraph.’

    1. The facts, the main proceedings and the questions referred for a preliminary ruling

  8. As mentioned above, BCAB is a Swedish company whose sole activity is the operation of the Baltic Cable, which it owns. BCAB does not charge any fee for access to the Baltic Cable.

  9. As required by paragraph 6.5 of Annex I to Regulation No 714/2009, the EI publishes an annual report on the amount and the use of congestion revenues. For that purpose, by letter of 27 May 2014, the EI requested BCAB to provide information concerning the amount and the use of its congestion revenues for the period from 1 July 2013 to 30 June 2014. On 1 July 2014, BCAB indicated that its congestion revenues for that period amounted to 159 542 374 Swedish kroner (SEK) and that they had been used mainly ‘to guarantee the accessibility and allocation of the transfer capacity on the interconnector’. (10) 11. In its 2014 report on congestion revenues, the EI stated that BCAB’s use of its congestion revenues had to be analysed in more detail.

  10. By letter of 29 May 2015, the EI requested BCAB to provide information concerning the amount and the use of its congestion revenues for the period from 1 July 2014 to 30 June 2015. On 1 July 2015, BCAB indicated that its congestion revenues for that period amounted to SEK 177 939 624 and that they had been used for the same purposes as in the previous year. (11) 13. In its 2015 report on congestion revenues, the EI stated that it had begun to investigate the use of congestion revenues by BCAB and that that investigation was ongoing.

  11. By decision of 9 June 2016 (‘the EI’s decision of 9 June 2016’), the EI requested BCAB to place part of its congestion revenues for the periods from 1 July 2013 to 30 June 2014 and from 1 July 2014 to 30 June 2015 on a separate internal account line.

  12. In the EI’s view, BCAB’s use of congestion revenues (in the amounts of SEK 61 016 510 for the period from 1 July 2013 to 30 June 2014 and SEK 48 995 127 for the period from 1 July 2014 to 30 June 2015) to ensure physical firmness (12) was consistent with point (a) of the first subparagraph of Article 16(6) of Regulation No 714/2009, which allows the use of congestion revenues for the purpose of guaranteeing the actual availability of the allocated capacity.

  13. However, according to the EI, BCAB’s use of congestion revenues (in the amounts of SEK 98 480 864 for the period from 1 July 2013 to 30 June 2014 and SEK 128 944 497 for the period from 1 July 2014 to 30 June 2015) to cover the costs incurred for the operation and maintenance of the Baltic Cable was not consistent with Article 16(6) of Regulation No 714/2009. This was because congestion revenues used to operate and maintain an existing interconnector are not used to maintain or increase interconnection capacities, and the use of congestion revenues to cover the costs incurred for the operation and maintenance of the interconnector is thus not permitted by point (b) of the first subparagraph of Article 16(6) of Regulation No 714/2009.

  14. Consequently, the EI’s decision of 9 June 2016 requested BCAB to place on a separate internal account line the portion of congestion revenues that was used, during the periods from 1 July 2013 to 30 June 2014 and from 1 July 2014 to 30 June 2015, to cover the costs incurred for the operation and the maintenance of the Baltic Cable, until such time as the company could use those revenues for the purposes listed under points (a) and (b) of the first subparagraph of Article 16(6) of Regulation No 714/2009. In the same decision, the EI requested BCAB to submit an extract from its accounts and an auditor’s certification that the revenues in question had been placed on a separate internal account line. Failure to comply with that decision was subject to a penalty payment of SEK 5 million for each month or part thereof in which the decision was not complied with, as from three months from the month in which BCAB was notified of the decision.

  15. BCAB brought an action before the Förvaltningsrätten i Linköping (Administrative Court, Linköping) seeking the annulment of the EI’s decision of 9 June 2016.

  16. By decision of 2 November 2017, the EI dismissed BCAB’s request for permission to use its congestion revenues as revenues to be taken into account by the EI when approving the methodology for calculating and/or fixing network tariffs.

  17. BCAB brought an action...

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