Tesco-Global Áruházak Zrt. v Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága.

• Jurisdiction: European Union
• Celex Number: 62018CJ0323
• ECLI: ECLI:EU:C:2020:140
• Docket Number: C-323/18
• Date: 03 March 2020
• Court: Court of Justice (European Union)

Provisional text

JUDGMENT OF THE COURT (Grand Chamber)

3 March 2020(*)

(Reference for a preliminary ruling — Freedom of establishment — Turnover tax in the store retail trade sector — Progressive tax having a greater impact on undertakings owned by natural or legal persons of other Member States than on national undertakings — Progressive tax bands applicable to all taxable persons — Neutrality of the amount of turnover as a criterion of differentiation — Ability to pay of taxable persons)

In Case C‑323/18,

REQUEST for a preliminary ruling under Article 267 TFEU from the Fővárosi Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court, Budapest, Hungary), made by decision of 19 March 2018, received at the Court on 16 May 2018, in the proceedings

Tesco-Global Áruházak Zrt.

v

Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága,

THE COURT (Grand Chamber),

composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice-President, J.‑C. Bonichot (Rapporteur) and E. Regan, Presidents of Chambers, P.G. Xuereb, L.S. Rossi, I. Jarukaitis, E. Juhász, M. Ilešič, J. Malenovský, L. Bay Larsen, K. Jürimäe and N. Piçarra, Judges,

Advocate General: J. Kokott,

Registrar: R. Şereş, administrator,

having regard to the written procedure and further to the hearing on 29 April 2019,

after considering the observations submitted on behalf of:

– Tesco-Global Áruházak Zrt., by Sz. Vámosi-Nagy, ügyvéd,

– the Hungarian Government, by M.Z. Fehér, G. Koós and D.R. Gesztelyi, acting as Agents,

– the Polish Government, by B. Majczyna, M. Rzotkiewicz and A. Kramarczyk, acting as Agents,

– the European Commission, by W. Roels, V. Bottka, P.‑J. Loewenthal, R. Lyal and A. Armenia, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 4 July 2019,

gives the following

Judgment

1 This request for a preliminary ruling concerns the interpretation of Articles 18, 26, 49, 54 to 56, 63, 65, 107, 108 and 110 TFEU and of the principles of the effectiveness and primacy of EU law, and of the principle of procedural equivalence.

2 The request has been made in proceedings between Tesco-Global Áruházak Zrt. (‘Tesco’) and the Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága (Resources Directorate of the National Tax and Customs Administration, Hungary; ‘the Resources Directorate’) concerning payment of a turnover tax in the store retail trade sector (‘the special tax’).

Hungarian law

3 The preamble of the egyes ágazatokat terhelő különadóról szóló 2010. évi XCIV. törvény (Law No XCIV of 2010 on the special tax on certain sectors; ‘the law on the special tax on certain sectors’) states:

‘In the context of the correction of budgetary balance, the Parliament enacts this law on the establishment of a special tax imposed on taxpayers whose ability to contribute to the costs of public expenditure exceeds the general obligation to pay tax.’

4 Paragraph 1 of the law on the special tax on certain sectors provides:

‘For the purposes of the present law, the following definitions shall apply:

1. store retail trade: in accordance with the uniform system for classification of economic activities, in force on 1 January 2009, the activities classified in sector 45.1, apart from wholesale trade in vehicles and trailers, in sectors 45.32, 45.40, apart from repairs of and wholesale trade in motorcycles, and in sectors 47.1 to 47.9,

…

5. net turnover: in the case of a taxable person subject to the law on accounting, the net turnover from sales within the meaning of the law on accounting; in the case of a taxable person subject to the simplified corporation tax and not covered by the law on accounting, turnover exclusive of value added tax in accordance with the law on the tax regime; in the case of a taxable person subject to the law on personal income tax, income exclusive of value added tax in accordance with the law on personal income tax.’

5 Paragraph 2 of the law on the special tax on certain sectors provides:

‘Tax shall be chargeable on:

(a) store retail trade

…’

6 Paragraph 3 of that law defines taxable persons as follows:

‘(1) Taxable persons are legal persons, other organisations within the meaning of the general tax code and self-employed persons who pursue an activity subject to tax within the meaning of Paragraph 2.

(2) Non-resident organisations and individuals shall also be subject to the tax with respect to the activities subject to the tax referred to in Paragraph 2, where they pursue those activities in the internal market through subsidiaries.’

7 Paragraph 4(1) of that law states:

‘the taxable amount is the net turnover of the taxable person resulting from the activities referred to in Paragraph 2, …’

8 Paragraph 5 of that law provides:

‘The applicable tax rate:

(a) on activities referred to in Paragraph 2(a), shall be set at 0% on the proportion of the taxable amount not exceeding 500 million [Hungarian forint (HUF)]; 0.1% on the proportion of the taxable amount in excess of HUF 500 million but not exceeding HUF 30 billion; 0.4% on the proportion of the taxable amount in excess of HUF 30 billion but not exceeding HUF 100 billion, and 2.5% on the proportion of the taxable amount in excess of HUF 100 billion,

…’

9 Paragraph 124/B of the adózás rendjéről szóló 2003. évi XCII. törvény (Law No XCII of 2003 on General Taxation) provides:

‘The tax authority shall give a decision on a supplementary return within 15 days of the filing date of that return, without carrying out any inspection, where the taxpayer has filed such a supplementary return claiming only that the legal provision on which the tax liability is based is unconstitutional or contrary to a binding legal act of the European Union or that a municipal decree is contrary to any other legal provision, provided that the Alkotmánybíróság [Constitutional Court, Hungary] the Kúria [Supreme Court, Hungary] or the Court of Justice of the European Union had not yet given a ruling on that issue at the time of filing of the supplementary return or that return does not comply with the terms of the published ruling. The decision adopted in relation to the supplementary return may be the subject of an administrative appeal or legal proceedings in accordance with the general provisions of this Law.’

10 Paragraph 128(2) of that law provides:

‘No tax adjustment should be made where taxes or public subsidies are not required to be adjusted by means of a supplementary return.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

11 Tesco is a public limited company governed by Hungarian law which is engaged in store wholesale and retail trade. As a member of a group that has its registered office in the United Kingdom, it is the retail chain that achieved the highest turnover in the Hungarian market in the period between 1 March 2010 and 28 February 2013.

12 Tesco was the subject of a tax inspection carried out by the Nemzeti Adó- és Vámhivatal Kiemelt Adózók Adóigazgatósága (National Tax and Customs Administration, Large Taxpayers Directorate, Hungary; ‘the first-tier tax authority’) concerning all the taxes paid and budget subsidies received in that period.

13 Following that inspection, the first-tier tax authority imposed on Tesco an adjustment of, inter alia, the special tax amounting to HUF 1 396 684 000 (approximately EUR 4 198 852), and found that Tesco had had the benefit of a surplus of HUF 17 900 000 (approximately EUR 53 811) with respect to that same tax. In total, there was held to be a tax shortfall of HUF 4 634 131 000 (approximately EUR 13 931 233), which gave rise to a tax penalty of HUF 873 760 000 (approximately EUR 2 626 260) and a late-payment surcharge of HUF 956 812 000 (approximately EUR 2 875 889).

14 The Resources Directorate, before which an administrative appeal was brought against the decision of the first-tier tax authority, upheld that decision in relation to the special tax. However, that decision was varied with respect to the tax surplus of which Tesco was held to have had the benefit, which was set at HUF 249 254 000 (approximately EUR 749 144), and the adjustment imposed on Tesco, which was set at HUF 3 058 090 000 (approximately EUR 9 191 226), of which HUF 3 013 077 000 (approximately EUR 9 070 000) was held to be the tax shortfall. In addition to that tax liability, the Resources Directorate ordered Tesco to pay HUF 1 396 684 000 (approximately EUR 4 198 378) with respect to the special tax and to pay a tax penalty of HUF 468 497 000 (approximately EUR 1 408 284), and a late-payment surcharge of HUF 644 890 000 (approximately EUR 1 938 416).

15 Tesco brought an action before the Fővárosi Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court, Budapest, Hungary) contesting the decision of the Resources Directorate. Tesco submits that the obligation to pay the special tax imposed on it has no legal basis, arguing that the legislation relating to that tax adversely affects freedom of establishment, the freedom to provide services and the free movement of capital. Further, that legislation is contrary to the principle of equal treatment, constitutes prohibited State aid and is contrary to Article 401 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1).

16 Tesco claims in particular that, because of the steeply progressive scale of the special tax and the structure of the Hungarian retail trade market, all the companies that fall within the lower bands are companies which are owned by Hungarian natural persons or legal persons, and which operate within franchise systems. Conversely, the companies that fall within the highest band are, with one exception, undertakings linked to companies that have their registered office in another Member State. Accordingly, the companies owned by foreign natural persons or legal persons bear a disproportionate share of the burden of that tax.

17 The referring...