The ECJ issued the facts and questions in the case C-733/23 (Beach and bar management)
Article in the EU VAT Directive
Charter of Fundamental Rights of the European Union (Charter): Articles 47, 49(3) and 50;
Treaty on the Functioning of the European Union: Article 325;
Article 273 of the EU VAT Directive 2006/112/EC
Article 273
Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.
The option under the first paragraph may not be relied upon in order to impose additional invoicing obligations over and above those laid down in Chapter 3.
Facts
The applicant in the main proceedings is ‘Beach and bar management’ EOOD (hereinafter: management), which operates a business premises of a bar with restaurant. Tax inspectors examined the area, after which they drew up a report stating that no tax receipts were issued with the tax devices present in the restaurant for eighty-five payment transactions. The administrative authority has imposed two administrative coercive measures, the sealing of a business premises and an entry ban. The authority has also imposed eighty-five fines. An objection has been raised against this.
Consideration:
The referring court has doubts as to whether the adoption of the administrative coercive measures and the imposition of eighty-five fines are contrary to Article 325 TFEU and Article 273 of the VAT Directive. The measure was ordered for a total of eighty-five violations without the scope of the measure imposed for each violation being individualized. As a result, the proportionality of the measures and the ‘deterrent effect’ within the meaning of Article 325 TFEU cannot be examined. According to the referring court, the administrative coercive measure is not repressive, but restrictive. The referring court also doubts whether the right to an effective remedy is violated, because there is no defense mechanism for each individual violation.
Questions
1) Should Article 325 of the Treaty on the Functioning of the European Union, Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and Article 50 of the Charter of the fundamental rights of the European Union be interpreted as authorizing national legislation under which a general measure (‘sealing of business premises and ban on access’) may be ordered for multiple infringements of tax obligations, if the sole purpose of that measure is to reduce the adverse effects, including the extent of damage to the financial interests of the European Union, but not to punish the offender, without this measure restricting the possibility of initiating independent proceedings of a repressive nature against the latter for each of these violations of tax obligations to impose a measure in the form of a fine on the taxable person, requiring the national court to examine in each individual case and determine which of the two objectives is pursued by the previously ordered general administrative coercive measure ‘sealing of a business premises and ban on access’ – a preventive-restrictive or a repressive objective?
2) Should Article 325 of the Treaty on the Functioning of the European Union, Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and Article 49(3) of the Charter of Fundamental Rights of the European Union be interpreted as precluding a sanctions regime such as that at issue in the main proceedings which, regardless of the nature and gravity of the infringements, sets a high minimum limit for the sanction in the form of a fine, without providing for the possibility that a sanction below the legal minimum will be imposed or that it will be replaced by a lighter sanction?
3) Should Article 325 of the Treaty on the Functioning of the European Union, Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, Article 47, first paragraph, Article 48(1) and Article 49(3) of the Charter of Fundamental Rights of the European Union be interpreted as precluding national legislation under which a general measure (‘sealing of a business premises and access ban”) can be ordered and, before it becomes final, can be provisionally enforced, without the judge or the offender himself having the opportunity to assess its proportionality to the seriousness of each individual administrative violation?
Similar ECJ Cases
- C-97/21(MV-98) – Judgment – Sealing of business premises together with administrative penalty is not proportionate for failing to issue fiscal receipts
- C-489/10
- C-617/10 (Åkerberg Fransson) – A Member State can impose a tax penalty and a criminal penalty
Source
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