Opinion of Advocate General Pikamäe delivered on 13 July 2023.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2023:584
• Date: 13 July 2023
• Celex Number: 62022CC0340
• Court: Court of Justice (European Union)

Provisional text

OPINION OF ADVOCATE GENERAL

PIKAMÄE

delivered on 13 July 2023 (1)

Case C‑340/22

Cofidis

v

Autoridade Tributária e Aduaneira

(Request for a preliminary ruling from the Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa – CAAD) (Tax Arbitration Tribunal (Centre for Administrative Arbitration – CAAD)), Portugal)

(Reference for a preliminary ruling – Direct taxation – Article 49 TFEU – Levy on credit institutions for the purpose of financing social security – Deductions from the tax base available to entities with legal personality – Justification – Balanced allocation between the Member States of the power to impose taxes)

1. In the present case, the Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa – CAAD) (Tax Arbitration Tribunal (Centre for Administrative Arbitration – CAAD), Portugal) has asked the Court to give a preliminary ruling on the interpretation of Article 49 TFEU and Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council. (2)

2. At the request of the Court, this Opinion deals only with the second question referred for a preliminary ruling. That question gives the Court the opportunity to provide further clarification on the scope of the freedom of establishment, enshrined in Article 49 TFEU, in the field of direct taxation, and the scope of the overriding reasons in the public interest which may justify an obstacle to that freedom, such as the need to preserve the balanced allocation between the Member States of the power to impose taxes.

Legal framework

European Union law

3. Article 49 TFEU is relevant to the present case.

Portuguese law

4. Article 18 of and Annex VI to Lei No 27-A/2020 da Assembleia da República, que aprova o Orçamento Suplementar para 2020 (Law No 27-A/2020 of the Parliament of the Portuguese Republic approving the supplementary budget for 2020) of 24 July 2020 introduced the Adicional de Solidariedade sobre o Sector Bancário (additional solidarity tax on the banking sector; ‘the ASSB’).

5. Under Article 1(2) and Article 9 of Annex VI to that law, that levy was introduced with the aim of strengthening the financing arrangements for the social security system through the allocation of all of the revenue thereby obtained to the Fundo de Establização Financeira da Segurança Social (Social Security Financial Stabilisation Fund). According to those provisions, the creation of the ASSB is intended to offset the exemption from value added tax (‘VAT’) enjoyed by the banking sector on most financial services and transactions, so as to bring the tax burden borne by that sector closer to that of other economic sectors.

6. Under Article 2(1) of Annex VI, the following are taxable persons liable to the ASSB: (a) credit institutions resident in Portugal, (b) subsidiaries in Portugal of credit institutions resident in other States, and (c) branches in Portugal of credit institutions resident in other States.

7. The material scope of the ASSB is defined in Article 3 of Annex VI, in accordance with which:

‘The ASSB is payable on:

(a) liabilities calculated and approved by taxable persons after deduction, as appropriate, of liability items which form an integral part of own funds, deposits covered by the guarantee of the Deposit Guarantee Fund, the Mutual Agricultural Credit Guarantee Fund or a deposit guarantee scheme officially recognised in accordance with Article 4 of Directive 2014/49/EU [of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (OJ 2014 L 173, p. 149)] or considered to be equivalent pursuant to Article 156(1)(b) of the General Rules on Credit Institutions and Financial Companies, within the limits stipulated in the applicable legislation, and deposits placed with the Central Bank by agricultural credit banks belonging to the integrated agricultural credit scheme in accordance with Article 72 of the Regime Juridíco do Crédito Agrícola Mútuo e das Cooperativas de Crédito Agrícola (Legal Rules governing Mutual Agricultural Credit and Agricultural Credit Cooperatives), adopted as an annex to Decreto-lei n° 24/91 (Decree-law No 24/91) of 11 January 1991;

(b) the notional value of off-balance sheet derivative financial instruments determined by taxable persons.’

8. Article 4 of Annex VI, concerning the quantification of the basis of assessment for the ASSB, provides:

‘1. For the purposes of Article 3(a), “liabilities” shall mean all items entered in the balance sheet which, irrespective of their form and type, represent a debt to third parties, with the exception of the following:

(a) items which, in accordance with the applicable accounting rules, are treated as own funds;

(b) liabilities connected with the recognition of obligations derived from defined benefit schemes;

(c) deposits covered by the Deposit Guarantee Fund and the Mutual Agricultural Credit Guarantee Fund, only to the extent that they are covered by those funds;

(d) liabilities derived from the valuation of derivative financial instruments;

(e) deferred revenue, disregarding any such revenue corresponding to debit transactions; and

(f) liabilities in respect of assets which have not been derecognised in securitisation transactions.

2. For the purposes of Article 3(a), the following rules shall apply:

(a) the value of own funds, including tier 1 own funds and tier 2 own funds, includes the positive items which are entered in the accounts for the purposes of their calculation in accordance with Part II of Regulation (EU) No 575/2013 [of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ 2013 L 176, p. 1)], taking into account the transitional provisions laid down in Part X of that regulation, which, at the same time, come within the concept of liabilities as defined in the previous paragraph;

(b) deposits covered by the guarantee of the Deposit Guarantee Fund, the Mutual Agricultural Credit Guarantee Fund or a deposit guarantee scheme officially recognised in accordance with Article 4 of [Directive 2014/49], or considered to be equivalent pursuant to Article 156(1)(b) of the General Rules on Credit Institutions and Financial Companies, within the limits stipulated in the applicable legislation, shall be taken into account only up to the amount actually covered by those Funds.’

Facts of the dispute, the procedure in the main proceedings, the questions referred for a preliminary ruling and the procedure before the Court

9. The applicant in the main proceedings is a Portuguese branch of a credit institution the registered office of which is in France. In that capacity, it is subject to the ASSB, namely a levy on the banking sector introduced by the Portuguese Republic in order to provide financial support for social security and to restore the balance between the tax burden borne by that sector, which benefits from a VAT exemption on most financial services and transactions, and that borne by all other sectors of the Portuguese economy.

10. On 11 December 2020, the applicant carried out a self-assessment for the ASSB in respect of the first half of 2020. On the basis of that self-assessment it paid the sum of EUR 364 229.67. On 5 January 2021, the applicant submitted with the tax authorities an application for review seeking the repayment of that amount. By decision of 21 May 2021, the tax authority dismissed that application.

11. On 23 August 2021, the applicant brought an action before the referring court challenging the decision dismissing the application. In support of its action, it claimed, inter alia, that the ASSB is contrary to EU law.

12. In particular, according to the applicant, the creation of the ASSB is contrary to Directive 2014/59 and to the alleged tax harmonisation resulting from that directive, as regards credit institutions’ resolution contributions. It is already taxed in the Member State in which its registered office is situated, namely in France, under that directive, and therefore the Portuguese Republic cannot impose on it a similar levy with the same basis of assessment.

13. Moreover, the applicant considers that the ASSB infringes Article 49 TFEU by discriminating against branches of foreign credit institutions. As they do not have legal personality, those branches are unable to deduct certain own fund items from their tax base for the ASSB.

14. It was in that context that the Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa – CAAD) (Tax Arbitration Tribunal (Centre for Administrative Arbitration – CAAD)) decided to stay the proceedings and to submit the following questions to the Court of Justice for a preliminary ruling:

‘(1) Does [Directive 2014/59] preclude the taxation in a Member State of branches of financial institutions resident in another Member State of the European Union, pursuant to legislation such as the Portuguese national rules governing the [ASSB], which is levied on the adjusted liabilities and notional value of off-balance sheet derivative financial instruments and from which the revenue collected is not allocated to national financing arrangements for resolution measures or to the financing of the Single Resolution Fund?

(2) Does the freedom of establishment enshrined in Article 49 TFEU preclude national legislation such as that laid down in the Portuguese national rules governing the [ASSB], which permits the deduction from the liabilities, as determined and approved, [of] certain liability items which are taken into account...