Fantask A/S e.a. v Industriministeriet (Erhvervministeriet).

• Jurisdiction: European Union
• Celex Number: 61995CC0188
• ECLI: ECLI:EU:C:1997:321
• Docket Number: C-188/95
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Date: 26 June 1997

Important legal notice

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61995C0188

Opinion of Mr Advocate General Jacobs delivered on 26 June 1997. - Fantask A/S e.a. v Industriministeriet (Erhvervministeriet). - Reference for a preliminary ruling: Østre Landsret - Denmark. - Directive 69/335/EEC - Registration charges on companies - Procedural timelimits under national law. - Case C-188/95.

European Court reports 1997 Page I-06783

Opinion of the Advocate-General

1 The Østre Landsret (Danish Eastern Regional Court) has requested the Court to give a preliminary ruling on the interpretation of Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital (`the Directive'), (1) as most recently amended by Council Directive 85/303/EEC. (2) The Directive, which introduces a harmonized duty on the raising of capital by companies, prohibits the charging of any other taxes in respect of company registration of capital companies. By virtue of Article 12 of the Directive Member States nevertheless retain the power to charge `duties paid by way of fees or dues'. The Østre Landsret seeks guidance on the scope of that expression and also asks the Court whether, in the light of the ruling in Emmott, (3) a Member State can rely upon a limitation period in proceedings brought against it even though it has failed to implement a directive properly.

Relevant Community rules

2 The Directive has the aim of promoting the free movement of capital by harmonizing the taxation payable on the contribution of capital to companies and firms and by abolishing stamp duty on securities as well as other indirect taxes with the same characteristics as capital duty or stamp duty. Article 3 of the Directive specifies the companies and firms in respect of which capital duty is payable, which are referred to in the Directive as `capital companies', and Article 4 specifies the transactions which may attract the duty. By virtue of Article 7 of the Directive, which was most recently amended by Article 1(2) of Council Directive 85/303, Member States must either exempt such transactions from capital duty or charge duty at a single rate not exceeding one per cent.

3 As the eighth recital in the preamble to the Directive states:

`... the retention of other indirect taxes with the same characteristics as ... capital duty or the stamp duty on securities might frustrate the purpose of the measures provided for in this Directive and those should therefore be abolished'.

4 Article 10 of the Directive accordingly provides:

`Apart from capital duty, Member States shall not charge, with regard to companies, firms, associations or legal persons operating for profit, any taxes whatsoever:

...

(c) in respect of registration or any other formality required before the commencement of business to which a company, firm, association or legal person operating for profit may be subject by reason of its legal form.'

5 However, by virtue of Article 12(1):

`Notwithstanding Articles 10 and 11, Member States may charge:

...

(e) duties paid by way of fees or dues:

...'.

6 The Court had occasion to consider the scope of Articles 10 and 12(1)(e) in its judgment in Ponente Carni. (4) In issue in that case were Italian charges payable on the first registration of a company and annually thereafter. The level and structure of the charges were amended several times during the material period. The charges were invariably higher for public limited companies than for private limited companies and, during one period, varied according to a public limited company's capital. The charges were substantial; for 1988, for example, they were fixed at LIT 15 000 000 for public limited companies and LIT 3 500 000 for private limited companies.

7 The Court held first that charges such as those in issue fell within the scope of Article 10. That was so even though the revenue from the charge contributed to the financing of the department responsible for keeping the register. If Member States were able to impose, without any limitation under Community law, a charge other than capital duty on capital companies in respect of one of the essential formalities for their formation, that would run counter to the objectives of the Directive. (5)

8 The Court then went on to consider the scope of Article 12 of the Directive. Distinguishing its case-law on the Treaty provisions on charges having an equivalent effect to customs duties, the Court held that Article 12 permitted the charging of fees or dues representing `the consideration for a transaction required by law for an object of public interest. That may be precisely the case with a charge required as consideration for a transaction such as the registration of capital companies which is required by national law, in accordance with Community law, in the interest of both third parties and of the companies themselves.' (6)

9 Turning to the calculation of the fees or dues, the Court observed:

`The distinction between taxes prohibited by Article 10 of the Directive and duties paid by way of fees or dues implies that the latter cover only payments collected on registration or annually, the amount of which is calculated on the basis of the cost of the service rendered.

A payment the amount of which had no link with the cost of the particular service or was calculated not on the basis of the cost of the transaction for which it is a consideration but on the basis of all the running and capital costs of the department responsible for that transaction would have to be regarded as a tax falling solely under the prohibition of Article 10 of the Directive.

For certain transactions such as, for example, the registration of a company, it may be difficult to determine their cost. In such case the assessment of the cost can only be on a flat-rate basis and must be fixed in a reasonable manner, taking account, in particular, of the number and qualification of the officials, the time they take and the various material costs necessary for carrying out the transaction.' (7)

10 The Court added that Member States were free to fix different amounts for public and private limited companies provided that `none of the amounts required for any of the companies exceeds the cost of the transaction of registration'. (8)

Relevant national rules

11 Law No 468 of 29 September 1917 and, more recently, Law No 370 of 13 June 1973 authorized the competent minister, and later the Danish Trade and Companies Office, to levy certain charges for registering the formation of public limited companies and increases in their capital. Corresponding provisions were introduced for private companies by Law No 371 of 13 June 1973.

12 Until 1 May 1992 the amounts charged comprised a basic fee plus a supplement calculated proportionally at the rate of DKR 1 per DKR 1 000 of the nominal value of the capital raised. The basic charge was itself variable (on a degressive scale according to capital raised) until 1 January 1974; from that date it was replaced by fixed basic charges which, during the period from 1 January 1974 to May 1992, ranged from DKR 500 to DKR 1 700 for notification of new public and private limited companies and from DKR 200 to DKR 900 for notification of increases in capital of existing public and private limited companies. From 1 February 1973 until 1 May 1992 the variable supplement was fixed at DKR 4 per DKR 1 000 of the value of the capital raised.

13 The Danish Audit Board (Danmarks Rigsrevision) published a report on 13 May 1992 concluding that the charges in question were in its experience the most remarkable example of a public authority more than covering its operating costs. The report questioned the national legal basis for levying the charges.

14 The report, an outline of which was released in advance of the official publication date, led to the abolition of the per mil supplement with effect from 1 May 1992. On the same date the fixed basic charge for notification of new companies was altered from DKR 1 700, applicable to both public and private companies, to DKR 2 500 for public companies and DKR 1 800 for private companies; at the same time the charge for increases in capital was reduced from DKR 900 to DKR 600.

The Trade and Companies Office

15 The Danish Companies Registry was set up in 1918 and on 1 January 1988 changed its name to the Trade and Companies Office (`the Office'). The Office comprises six divisions responsible for various matters relating to the administration and drafting of legislation in the fields of company and business law.

16 The order for reference contains two tables showing the operating expenses and income of the Office. The first table was prepared by the Audit Board and lists total operating expenses, total income and surpluses for the years 1980 to 1990. The Office considers that the figures in that table do not properly reflect its income and expenditure relating to the field of company law and has produced a different set of figures for the years 1987 to 1991. The table produced by the Audit Board shows surpluses ranging from DKR 4.9 million (1980) to DKR 139.4 million (1990). The table produced by the Office shows smaller surpluses ranging from DKR 12.0 million (1987) to DKR 90.2 million (1991).

17 The figures produced by the Office include its direct and indirect expenditure on administration of the company laws and also the Ministry of Trade's staff costs relating to preparation of company legislation and administration of the Office. The Office's expenditure on administration of the company laws includes the cost of registering company formations, conversions, increases in capital, mergers and other changes and of ensuring compliance with procedures concerning lists of major shareholdings and prospectuses for issue of shares. It also includes costs connected with matters such as: preparatory legal work on regulations in the field of company law and on annual...