Danfoss A/S and Sauer-Danfoss ApS v Skatteministeriet.

• Jurisdiction: European Union
• Celex Number: 62010CJ0094
• ECLI: ECLI:EU:C:2011:674
• Date: 20 October 2011
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Docket Number: C-94/10

Case C-94/10

Danfoss A/S

and

Sauer-Danfoss ApS

v

Skatteministeriet

(Reference for a preliminary ruling from the Vestre Landsret)

(Indirect taxes – Excise duties on mineral oils – Incompatibility with European Union law – Non-repayment of excise duty to purchasers of goods to whom the excise duty has been passed on)

Summary of the Judgment

1. European Union law – Direct effect – National duties incompatible with European Union law – Repayment – Refusal – Condition

2. European Union law – Direct effect – National duties incompatible with European Union law – Repayment – Claim for reimbursement brought by a final purchaser which has not itself paid the duty to the tax authorities

3. European Union law – Direct effect – National duties incompatible with European Union law – Claim for damages

1. The right to a refund of charges levied in a Member State in breach of the rules of Union law is the consequence and complement of the rights conferred on individuals by the provisions of Union law prohibiting such charges. The Member State is therefore required in principle to repay charges levied in breach of Union law. The repayment of duties wrongly levied can be refused only where repayment would entail unjust enrichment of the persons concerned, that is to say, where it is established that the person required to pay such charges has actually passed them on to the purchaser directly.

(see paras 20-21)

2. The rules of Union law must be construed as meaning that a Member State may oppose a claim for reimbursement of a duty unduly paid, brought by the purchaser to whom that duty has been passed on, on the ground that it is not the purchaser who has paid the duty to the tax authorities, provided that the purchaser is able, on the basis of national law, to bring a civil action against the taxable person for recovery of the sum unduly paid and provided that the reimbursement, by that taxable person, of the duty unduly paid is not in practical terms impossible or excessively difficult.

However, if reimbursement by the taxable person were to prove impossible or excessively difficult, in particular, in the case of the latter’s insolvency, the principle of effectiveness requires the purchaser to be able to bring his claim for reimbursement against the tax authorities directly and, to that end, the Member State to provide the necessary instruments and detailed procedural rules.

(see paras 28-29, operative part 1)

3. The rules of Union law must be construed as meaning that a Member State may reject a claim for damages brought by a purchaser to whom a duty unduly paid has been passed on by the taxable person, on the ground that there is no direct causal link between the levying of that duty and the damage suffered, provided that the purchaser is able, on the basis of national law, to bring that claim against the taxable person and provided that the compensation, by that taxable person, of the damage suffered by the purchaser is not in practical terms impossible or excessively difficult.

However, if it were to prove impossible or excessively difficult for the taxable person to compensate the purchaser who bore the financial burden of the duty unduly paid and passed on to him for the damage suffered, in particular, in the case of the latter’s insolvency, the principle of effectiveness requires the purchaser to be able to bring his claim for reimbursement against the State directly, without that State’s being able legitimately to rely on the lack of a direct causal link between the levying of the duty that was not due and the damage suffered by the purchaser.

(see paras 38-39, operative part 2)

JUDGMENT OF THE COURT (First Chamber)

20 October 2011 (*)

(Indirect taxes – Excise duties on mineral oils – Incompatibility with European Union law – Non-repayment of excise duty to purchasers of goods to whom the excise duty has been passed on)

In Case C‑94/10,

REFERENCE for a preliminary ruling under Article 267 TFEU from the Vestre Landsret (Denmark), made by decision of 11 February 2010, received at the Court on 17 February 2010, in the proceedings

Danfoss A/S,

Sauer-Danfoss ApS

v

Skatteministeriet,

THE COURT (First Chamber),

composed of A. Tizzano, President of the Chamber, M. Safjan (Rapporteur), A. Borg Barthet, E. Levits and J.-J. Kasel, Judges,

Advocate General: J. Kokott,

Registrar: C. Strömholm, Administrator,

having regard to the written procedure and further to the hearing on 17 February 2011,

after considering the observations submitted on behalf of:

– Danfoss A/S, by T.K. Kristjánsson and H.S. Hansen, advokaterne,

– Sauer-Danfoss ApS, by A. Møllin and E. Vistisen, advokaterne,

– the Danish Government, by V. Pasternak Jørgensen, K. Lundgaard Hansen and B. Weis Fogh, acting as Agents,

– the Spanish Government, by M. Muñoz Pérez, acting as Agent,

– the Italian Government, by G. Palmieri, acting as Agent, assisted by G. Albenzio, avvocato dello Stato,

– the Polish Government, by K. Rokicka, acting as Agent,

– the Swedish Government, by A. Falk, acting as Agent,

– the United Kingdom Government, by S. Hathaway, acting as Agent, assisted by P. Mantle, Barrister,

– the European Commission, by N. Fenger and W. Mölls, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 24 March 2011,

gives the following

Judgment

1 This reference for a preliminary ruling concerns the interpretation of European Union (‘EU’) law on recovery of sums unduly paid and on the liability incurred by Member States as a consequence of levying a duty which is incompatible with that law.

2 The reference has been made in proceedings between Danfoss A/S (‘Danfoss’) and Sauer-Danfoss ApS (‘Sauer-Danfoss’), on the one hand, and the Skatteministeriet (Danish Ministry of Taxation), on the other, concerning the Skatteministeriet’s refusal to grant those undertakings reimbursement of a duty on mineral oils levied in breach of EU law or compensation for the damage suffered as a consequence of the levying of that unlawful duty.

Legal context

EU law

3 Article 1 of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ 1992 L 76, p. 1) provides:

‘1. This Directive lays down the arrangements for products subject to excise duties and other indirect taxes which are levied directly or indirectly on the consumption of such products, except for value added tax and taxes established by the Community.

2. The particular provisions relating to the structures and rates of duty on products subject to excise duty shall be set out in...