The ECJ issued the preliminary ruling in the case C-251/24 (Axpo Energy Romania).
Context: Action involving, as its principal claim, the payment of compensation for the loss allegedly suffered by the applicant Axpo Energy Romania SA in 2022 and 2023 following payment of the levy to the Energy Transition Fund in respect of its trading activity, plus interest, and the payment of compensation for the loss allegedly suffered by the applicant following the application of the price cap mechanism for natural gas and electricity supplied to final consumers.
Article in the EU VAT Directive
Article 401 of the EU VAT Directive 2006/112/EC.
Article 401 (Other taxes duties and charges)
Without prejudice to other provisions of Community law, this Directive shall not prevent a Member State from maintaining or introducing taxes on insurance contracts, taxes on betting and gambling, excise duties, stamp duties or, more generally, any taxes, duties or charges which cannot be characterised as turnover taxes, provided that the collecting of those taxes, duties or charges does not give rise, in trade between Member States, to formalities connected with the crossing of frontiers.
Facts & background
- 1 The applicant operates in the electricity and natural gas market. It is involved in the supply of energy to the final consumer and in trading – in other words, the purchase and wholesale of electricity and natural gas by means of financial and/or physical supply contracts.
- 2 For its trading activity, the applicant trades electricity and natural gas by entering into sales or purchase contracts on the wholesale market, thereby meeting the need for liquidity and stability of other energy market participants, who buy energy and natural gas from traders to make up for any shortages or to mitigate risks.
- 3 The applicant’s trading activity offers market participants medium and long-term protection against price volatility in the energy sector. Using market analyses and expert forecasts, the applicant enters into short, medium and long-term contracts for the sale or purchase of significant quantities of electricity, thereby meeting the need for stability of both producers and suppliers delivering electricity to consumers, wholesale electricity customers or other traders.
- 4 By contrast, the energy supply activity involves the sale of electricity or natural gas to final customers, as well as the wholesale purchase of volumes supplied to final customers.
- 5 In the former capacity, the applicant is subject to Government Emergency Order No 119/2022 and Government Emergency Order No 27/2022, by which the Romanian Government introduced measures aimed at protecting final consumers by setting a cap on the electricity prices they can be charged, while creating a special additional tax liability for traders and producers of electricity and natural gas.
- 6 By its action lodged on 5 December 2022, the applicant requested the Curtea de Apel București (Court of Appeal, Bucharest, Romania), the referring court in the present case, in proceedings brought against the Guvernul României (Romanian Government) and the Agenția Națională de Administrare Fiscală (Romanian National Tax Administration Agency; ‘ANAF’), defendants:
- to order the defendants to pay, by way of damages and following a preliminary assessment, the amount of 8 983 755 Romanian lei (RON) as compensation for the loss that the applicant suffered or claims to have suffered in 2022 and 2023 after paying the levy on trading, plus the statutory interest on that amount;
- to order the defendants to pay compensation for the loss that the applicant suffered or allegedly suffered in 2022 and 2023 following the introduction of the natural gas and electricity price cap mechanism for final consumers;
- to refer the plea of unconstitutionality of certain provisions of Government Emergency Order No 27/2022 to the Curțea Constituțională (Constitutional Court, Romania);
- to set aside Ordinul președintelui ANAF nr. 1635/2022 privind modificarea și completarea Ordinului președintelui ANAF nr. 587/2016 pentru aprobarea modelului și conținutului formularelor utilizate pentru declararea impozitelor și taxelor cu regim de stabilire prin autoimpunere sau reținere la sursă (Decree No 1635/2022 of the President of ANAF amending and supplementing Decree No 587/2016 of that president ratifying the model and content of the forms used for the tax return under the self-assessment or withholding tax system) (‘Decree No 1635/2022’), as a secondary act adopted for the implementation of allegedly unconstitutional national provisions and an administrative act adopted in breach of primary national legislation.
- 7 In their defence, the defendants raised several preliminary objections and, on the substance, contend that the action is unfounded and should be dismissed.
- 8 In the course of the proceedings, the applicant requested the referring court to
refer questions to the Court of Justice for a preliminary ruling.
Questions
- 1. Must the provisions of Article 3(1), (3) and (4) and Article 9(2) of Directive (EU) 2019/944, in conjunction with Article 101(1) TFEU, according to which Member States must ensure a level playing field and non-discriminatory conditions for electricity market participants, be interpreted as precluding a Member State from creating an additional tax liability, such as the levy on trading under Government Emergency Order No 27/2022, on a differentiated basis, solely for certain participants engaged in transactions on wholesale energy markets, such as suppliers involved in trading, and not other categories of participants, such as producers of electricity and heat from cogeneration, and producers whose production capacity was commissioned after 1 April 2022?
- 2. Must the provisions of Articles 101 and 102 TFEU, according to which Member States may not adopt measures preventing, restricting or distorting competition within the internal market, or limiting or controlling production or markets or applying dissimilar conditions to equivalent transactions with other trading parties, be interpreted as precluding a Member State from creating an additional tax liability, such as the levy on trading under Government Emergency Order No 27/2022, solely for certain participants engaged in transactions on wholesale energy markets, such as suppliers involved in trading, and not other categories of participants, such as producers of electricity and heat from cogeneration, and producers whose production capacity was commissioned after 1 April 2022, thereby placing those participants who are liable for the levy at a competitive disadvantage?
- 3. Must the provisions of Articles 107(1) and 108(3) TFEU on the requirement for Member States to notify State aid be interpreted as meaning that national legislation, such as the levy on trading under Government Emergency Order No 27/2022, constitutes State aid for those who are exempt from paying the levy, which is therefore subject to the notification requirement?
- 4. Must the provisions of Article 3(a), (b), (h) and (p) and Article 10(1), (4) and (5) of Regulation 2019/943, in conjunction with [recitals] 22 and 23 of the preamble to the Regulation, Article 5(1), (3) and (4) of Directive 2019/944 and Article 8 of Regulation 2022/1854, which govern the principles of price formation on the wholesale energy market, be interpreted as precluding a Member State from creating an additional tax liability such as the levy on trading under Government Emergency Order No 27/2022? In interpreting those provisions, can the levy be considered proportional if it does not take into account the operating expenses of market participants involved in trading? Furthermore, can the levy be considered non-discriminatory if it applies only to certain wholesale market participants who buy and sell energy?
- 5. Must the provisions of Articles 28, 30 and 35 TFEU, Article 3 of Regulation 2019/943 and Article 3 of Directive 2019/944, which prohibit the introduction of legislative barriers to cross-border electricity flows between Member States, be interpreted as precluding the creation by a Member State of an additional tax liability, such as the levy on trading under Government Emergency Order No 27/2022, which in the period between 1 September and 16 December 2022 provided for a more onerous formula for export transactions, in which no profit was recognised, whereas a theoretical 2% profit was recognised for domestic sales? In interpreting those provisions, does EU law preclude the creation of such a levy which, as of 16 December 2022, imposes the levy only on the sale of energy designated for export, and not on imported energy?
- 6. Do the provisions of Article 401 of Directive 2006/112, which prohibit Member States from imposing turnover taxes or charges in addition to value
added tax, preclude a Member State from creating an additional tax liability for market participants involved in trading, such as the levy on trading under Government Emergency Order No 27/2022?
Source
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