CJEU rules on UK appeal against draft plans for FTT
1 May 2014 12:43 PM
The Court has dismissed the action brought by
the United Kingdom against the decision authorising eleven Member States to
establish enhanced cooperation in the area of financial transaction
tax.
The
arguments relied on by the United Kingdom are directed at the elements of a
future tax and not at the authorisation to establish enhanced
cooperation In this case, the United Kingdom has asked the Court of
Justice to annul a Council decision1
authorising eleven Member States2 to use the enhanced cooperation
procedure to set up a financial transaction tax
(‘FTT’).
That decision was adopted when, after three Council
meetings in June and July 2012 where a Commission 2011 proposal for a
directive was discussed, it became obvious that an FTT could not obtain
unanimous support within the Council in the foreseeable
future.
In
February 2013, after the adoption of the decision authorising enhanced
cooperation, the Commission adopted a
further proposal for a directive.
The United Kingdom considers that the contested
decision authorises the adoption of an FTT which produces extraterritorial effects. It further
maintains that, read together with other directives3 on
mutual assistance and administrative cooperation in the area of tax, the FTT
will impose costs on
non-participating Member States. The United Kingdom accepts that its action
might be regarded as premature and
that, rather than challenging the authorisation decision, it should contest, at
the appropriate time, the
implementing measure which will ultimately be adopted by the
participating States. Nonetheless,
it decided to bring, as a precaution, an action for the annulment of
the authorisation decision in order
to preserve its right to challenge such an implementing
measure.
By its judgment , the
Court dismisses the United Kingdom’s action.
The Court states that,
in the context of an action for the annulment of a decision which
authorises enhanced cooperation,
the Court’s review is related to the issue of whether the granting of
such authorisation is valid. That
review must not be confused with the review which may be
undertaken, in the context of a
subsequent action for annulment, of a measure adopted for the purposes of
the implementation of the
authorised enhanced cooperation.
In this case, the Court
finds that the contested decision does no more than authorise
the establishment of enhanced
cooperation, but does not contain any substantive element on the
FTT itself. The elements of a
future FTT challenged by the United Kingdom are in no way
constituent elements of the
contested decision. They are solely contained, at this stage, in the
Commission’s proposals of
2011 and 2013.
1
Council Decision 2013/52/EU of 22 January 2013 authorising enhanced
cooperation in the area of financial transaction tax (OJ 2013 L 22, p.
11).
2
Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria,
Portugal, Slovenia and Slovakia.
3
Council Directive 2010/24/EU of 16 March 2010 concerning mutual
assistance for the recovery of claims relating to taxes, duties and other
measures (OJ 2010 L 84, p. 1) and Council Directive 2011/16/EU of 15 February
2011 on administrative cooperation in the field of taxation and repealing
Directive 77/799/EEC
(OJ
2011 L 64, p. 1). www.curia.europa.eu
Likewise, the contested decision contains no provision
on the issue of expenditure linked to the implementation of enhanced
cooperation. That issue can therefore not be examined before
the introduction of the FTT.
That being the case, the Court considers that the two
arguments put forward by the United Kingdom are directed at elements of a
potential FTT and not at the authorisation to establish enhanced
cooperation, and consequently those arguments must be rejected and the action
must fttbe dismissed.
NOTE: An action for annulment seeks the annulment of acts of the institutions
of the European Union that are contrary to European Union law. The Member
States, the European institutions and individuals may, under certain
conditions, bring an action for annulment before the Court of Justice or the
General Court. If the action is well founded, the act is annulled. The
institution concerned must fill any legal vacuum created by the annulment
of the act.
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Justice.
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