13 October 2022 (*1)

(Reference for a preliminary ruling – Freedom of establishment and freedom to provide services – Corporation tax – Determination of the taxable income of companies – Transactions featuring foreign elements – Obligation to provide fiscal documentation of business relations between parties with a relationship of interdependence – Estimate of the taxable income and surcharge by way of a penalty)

In Case C‑431/21,

REQUEST for a preliminary ruling under Article 267 TFEU from the Finanzgericht Bremen (Finance Court, Bremen, Germany), made by decision of 7 July 2021, received at the Court on 15 July 2021, in the proceedings

Finanzamt Bremen,

THE COURT (Ninth Chamber),

composed of L.S. Rossi, President of the Chamber, J.‑C. Bonichot (Rapporteur) and S. Rodin, Judges,

Advocate General: N. Emiliou,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

–the German Government, by J. Möller and R. Kanitz, acting as Agents,

–the European Commission, by W. Roels and V. Uher, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

This request for a preliminary ruling concerns the interpretation of Articles 43 and 49 EC and of Articles 49 and 56 TFEU.

The request has been made in proceedings between X GmbH Co. KG and the Finanzamt Bremen (Tax Office, Bremen, Germany) concerning a surcharge on the taxable income applied by the latter (‘the tax surcharge’) for failure to comply with the tax obligation to keep documents concerning cross-border business relations between related companies.

Legal context

European Union law

Directive 2011/92

Recitals 7 to 9 of Directive 2011/92 state:

‘(7) Development consent for public and private projects which are likely to have significant effects on the environment should be granted only after an assessment of the likely significant environmental effects of those projects has been carried out. …

(8) Projects belonging to certain types have significant effects on the environment and those projects should, as a rule, be subject to a systematic assessment.

ECLI:EU:C:2025:140

(9) Projects of other types may not have significant effects on the environment in every case and those projects should be assessed where the Member States consider that they are likely to have significant effects on the environment.’

Article 2(1) of that directive provides:

‘Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in Article 4.’

Under Article 3(1) of that directive:

‘The environmental impact assessment shall identify, describe and assess in an appropriate manner, in the light of each individual case, the direct and indirect significant effects of a project on the following factors:

…

(b) biodiversity, with particular attention to species and habitats protected under [Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), as amended by Council Directive 2013/17/EU of 13 May 2013 (OJ 2013 L 158, p. 193) (“Directive 92/43”)] and Directive 2009/147/EC [of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ 2010 L 20, p. 7)];

…’

Article 4 of Directive 2011/92 provides:

‘1. Subject to Article 2(4), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.

(a) a case-by-case examination;

(b) thresholds or criteria set by the Member State.

Member States may decide to apply both procedures referred to in points (a) and (b).

Where a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account. Member States may set thresholds or criteria to determine when projects need not undergo either the determination under paragraphs 4 and 5 or an environmental impact assessment, and/or thresholds or criteria to determine when projects shall in any case be made subject to an environmental impact assessment without undergoing a determination set out under paragraphs 4 and 5.

Where Member States decide to require a determination for projects listed in Annex II, the developer shall provide information on the characteristics of the project and its likely significant effects on the environment. The detailed list of information to be provided is specified in Annex IIA. The developer shall take into account, where relevant, the available results of other relevant assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The developer may also provide a description of any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

The competent authority shall make its determination, on the basis of the information provided by the developer in accordance with paragraph 4 taking into account, where relevant, the results of preliminary verifications or assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The determination shall made available to the public and:

(a) where it is decided that an environmental impact assessment is required, state the main reasons for requiring such assessment with reference to the relevant criteria listed in Annex III; or

(b) where it is decided that an environmental impact assessment is not required, state the main reasons for not requiring such assessment with reference to the relevant criteria listed in Annex III, and, where proposed by the developer, state any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

Member States shall ensure that the competent authority makes its determination as soon as possible and within a period of time not exceeding 90 days from the date on which the developer has submitted all the information required pursuant to paragraph 4. In exceptional cases, for instance relating to the nature, complexity, location or size of the project, the competent authority may extend that deadline to make its determination; in that event, the competent authority shall inform the developer in writing of the reasons justifying the extension and of the date when its determination is expected.’

Annex II.A of that directive contains the list of ‘information to be provided by the developer on the projects listed in Annex II’. That list reads as follows:

‘1. A description of the project, including in particular:

(a) a description of the physical characteristics of the whole project and, where relevant, of demolition works;

(b) a description of the location of the project, with particular regard to the environmental sensitivity of geographical areas likely to be affected.

(a) the expected residues and emissions and the production of waste, where relevant;

(b) the use of natural resources, in particular soil, land, water and biodiversity.

Annex III to that directive sets out the ‘criteria to determine whether the projects listed in Annex II should be subject to an environmental impact assessment’.

Directive 2014/52

Recitals 11 and 29 of Directive 2014/52 state:

‘(11) The measures taken to avoid, prevent, reduce and, if possible, offset significant adverse effects on the environment, in particular on species and habitats protected under [Directive 92/43] and Directive 2009/147 …, should contribute to avoiding any deterioration in the quality of the environment and any net loss of biodiversity, in accordance with the [European] Union’s commitments in the context of the [United Nations Convention on Biological Diversity, signed in Rio de Janeiro on 5 June 1992,] and the objectives and actions of the Union Biodiversity Strategy up to 2020 laid down in the [Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions] of 3 May 2011 entitled ‘Our life insurance, our natural capital: an EU biodiversity strategy to 2020’ [(COM(2011) 244 final)]

…

(29) When determining whether significant effects on the environment are likely to be caused by a project, the competent authorities should identify the most relevant criteria to be considered and should take into account information that could be available following other assessments required by Union legislation in order to apply the screening procedure effectively and transparently. In this regard, it is appropriate to specify the content of the screening determination, in particular where no environmental impact assessment is required. Moreover, taking into account unsolicited comments that might have been received from other sources, such as members of the public or public authorities, even though no formal consultation is required at the screening stage, constitutes good administrative practice.’

Directive 92/43

Article 6(3) of Directive 92/43 provides:

‘Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.’

Article 12(1) of that directive provides:

‘Member States shall take the requisite measures to establish a system of strict protection for the animal species listed in Annex IV(a) in their natural range, prohibiting:

(a) all forms of deliberate capture or killing of specimens of these species in the wild;

(b) deliberate disturbance of these species, particularly during the period of breeding, rearing, hibernation and migration;

(c) deliberate destruction or taking of eggs from the wild;

(d) deterioration or destruction of breeding sites or resting places.’

Point (a) of Annex IV to that directive mentions ‘all species’ of bats belonging to the suborder of ‘microchiroptera’.

Irish law

10That contract provides that Y’s remuneration is to take into account the costs and expenses actually incurred, with the exception of Y’s shareholder’s costs (‘the reimbursable costs’).

11Y is required to establish documents concerning the reimbursable costs and a detailed annual account. It is apparent from the order for reference that Y did not, however, provide such an account.

12X was the subject of a tax audit for the tax years 2007 to 2010 relating, in particular, to the management fees paid to Y. The documentation that X was invited to provide under the obligation set out in Paragraph 90(3) of the Tax Code (‘the obligation to provide fiscal documentation’) was held to be insufficient by the German tax authorities.

13On 7 January 2016, the Netherlands tax authorities, at X’s request, informed the German tax authorities that Y had invoiced X for all its costs, including costs which were not reimbursable costs.

14On 17 March 2016, X and the German tax authorities entered into a transaction with the participation of Y in which it was agreed that part of X’s payments to Y during the period at issue, amounting to EUR 400000 per year and for a total amount of EUR 1.6 million, had been incorrectly entered in the accounts as operating expenses.

15In their report of 10 June 2016, the German tax authorities stated that the documents submitted by X in respect of the obligation to provide fiscal documentation were unusable.

16Consequently, on 8 November 2016, those authorities ordered X to pay a tax surcharge, corresponding to 5% of X’s additional income, estimated by those authorities at EUR 20000 per year, making a total amount of EUR 80000.

17On 9 December 2016, X lodged a complaint against that decision with those authorities, which rejected it.

18On 27 December 2017, X brought an action against that decision before the Finanzgericht Bremen (Finance Court, Bremen, Germany), in which it claimed that Paragraph 162(4) of the Tax Code, on the basis of which the tax surcharge was imposed on it, infringed the freedom of establishment.

19The Finanzgericht Bremen (Finance Court, Bremen) states that the Bundesfinanzhof (Federal Finance Court, Germany) has held that the obligation to provide fiscal documentation constitutes a restriction on the freedom of establishment which may be regarded as justified by overriding reasons in the public interest and, in particular, by the need to ensure the preservation of the allocation of powers of taxation between the Member States and to allow effective fiscal inspection, but has not ruled on the compatibility with EU law of the tax surcharge that may be imposed in the event of an infringement of that obligation. According to the referring court, that surcharge may go beyond what is necessary to achieve those objectives.

20In those circumstances, the Finanzgericht Bremen (Finance Court, Bremen) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Must Article 43 EC and Article 49 TFEU, which guarantee the freedom of establishment (or, respectively, Article 49 EC and Article 56 TFEU, which guarantee the freedom to provide services), be interpreted as precluding national legislation under which, in situations involving transactions with a foreign element, the taxpayer must keep records on the nature and content of his, her or its business relations with related parties, including the economic and legal bases for an arm’s-length agreement on prices and other terms and conditions with the related parties, and under which, where the taxpayer fails to submit those records when requested to do so by the tax authority, or where the records submitted are fundamentally unusable, not only is there a rebuttable presumption that his, her or its income subject to tax domestically, which such records serve to determine, is higher than the income that he, she or it has declared, and, if in such cases the tax authority is required to make an estimate and such income can be determined only within a certain range, in particular only on the basis of price bands, the upper value of that range may be taken as the basis to the detriment of the taxpayer, but, in addition, a surcharge is to be imposed which is at least 5% and at most 10% of the excess income determined, but not less than EUR 5000, and which, in the event that usable records are submitted late, is up to EUR 1000000, but not less than EUR 100 for each full day of delay, whereby the imposition of a surcharge is to be waived only if the non-compliance with the record-keeping obligations appears to be excusable or if any fault involved is only minor?’

Consideration of the question referred

Preliminary observations

21As a preliminary point, it should be noted that it is apparent from the actual wording of the order for reference and from the wording of the question referred that it is necessary to provide guidance on the interpretation of EU law which will enable the referring court to assess the compatibility with EU law not only of the tax surcharge penalising failure to comply with the obligation to provide fiscal documentation, but also of that obligation itself.

22By contrast, it does not appear necessary, for the purposes of the dispute in the main proceedings, to provide the referring court with answers enabling it to assess the compatibility with EU law of the aspects of the German legislation referred to by that court relating to the tax surcharge applicable in the event that the applicable fiscal documentation is submitted late.

Applicable freedom of movement

23It should be noted that, although the question referred for a preliminary ruling concerns the provisions of the EC and FEU Treaties on the freedom of establishment and the freedom to provide services, it is necessary to determine the freedom applicable in the main proceedings.

24In that regard, according to established case‑law, in order to determine whether national legislation comes within the scope of one or other of the freedoms of movement, the purpose of the legislation concerned must be taken into consideration (judgment of 21 January 2010, SGI, C‑311/08, EU:C:2010:26, paragraph 25 and the case-law cited).

25Furthermore, national legislation intended to apply only to those shareholdings which enable the holder to exert a definite influence on a company’s decisions and to determine its activities come within the scope of freedom of establishment (judgment of 31 May 2018, Hornbach-Baumarkt, C‑382/16, EU:C:2018:366, paragraph 28 and the case-law cited).

26In this respect, it should be noted that the obligation to provide fiscal documentation concerns only cross-border business transactions between ‘related’ undertakings within the meaning of national law, that link being defined by the existence of a relationship of interdependence, in capital or other aspects, which, it appears in each case, characterises a definite influence of one over the other. That is in any event the case where that relation is defined by the fact, which is the situation in the main proceedings, that a party has a shareholding corresponding directly or indirectly to at least one quarter of the taxpayer’s capital. Y indirectly holds, through a company established in the Netherlands, 100% of the capital of X, established in Germany.

27In the light of the foregoing, it is necessary to examine the national legislation at issue exclusively in the light of the freedom of establishment.

28Moreover, although the referring court has referred, in its question, to the freedom of establishment enshrined in Articles 43 EC and 49 TFEU, respectively, reference will be made only to Article 49 TFEU, the interpretation, in any event, also being applicable to Article 43 EC.

29Consequently, the view must be taken that, by its question, the referring court asks, in essence, whether Article 49 TFEU must be interpreted as precluding legislation under which, in the first place, the taxpayer is subject to an obligation to provide documentation on the nature and content of, as well as on the economic and legal bases for, the prices and other terms and conditions of his, her or its cross-border business transactions, with parties with which he, she or it has a relationship of interdependence, in capital or other aspects, enabling that taxpayer or those parties to exercise a definite influence over the other and which provides, in the second place, in case of infringement of that obligation, not only that his, her or its taxable income in the Member State concerned is rebuttably presumed to be higher than that which has been declared, and the tax authorities may carry out an estimate to the detriment of the taxpayer, but also that a surcharge of an amount equivalent to at least 5% and at most 10% of the excess income determined is imposed, with a minimum amount of EUR 5000, unless non-compliance with that obligation is excusable or if the fault involved is minor.

Whether there is a restriction on the freedom of establishment

The obligation to submit a tax declaration

30According to settled case-law, freedom of establishment, conferred on EU nationals by Article 49 TFEU, entails, according to Article 54 TFEU, for companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the European Union, the right to exercise their activity in another Member State through a subsidiary, branch or agency (judgment of 8 October 2020, Impresa Pizzarotti (Unusual advantage granted to a non-resident company), C‑558/19, EU:C:2020:806, paragraph 21 and the case-law cited).

31The Court has in particular held that a restriction on freedom of establishment arises in the case of national legislation under which unusual or gratuitous advantages granted by a resident company to a company with which it has a relation of interdependence are added to the former company’s own profits only if the recipient company is established in another Member State (judgment of 8 October 2020, Impresa Pizzarotti (Unusual advantage granted to a non-resident company), C‑558/19, EU:C:2020:806, paragraph 24 and the case-law cited).

32In the present case, the obligation to provide fiscal documentation covers cross-border business transactions carried out between a resident company and another company with which it has a relationship of interdependence, in capital or other aspects, enabling the latter to exert a definite influence over the resident company. It is also apparent from the file submitted to the Court that resident companies are not subject to a comparable obligation in respect of business transactions concluded with resident companies.

33Such a difference in treatment is liable to constitute a restriction on freedom of establishment, within the meaning of Article 49 TFEU, since companies established in the State of taxation enjoy less favourable treatment in the case where the companies with which they have a relationship of interdependence are established in another Member State.

34A parent company, established in another Member State, might thereby be deterred from acquiring, creating or maintaining a branch in that first Member State (see, by analogy, judgment of 8 October 2020, Impresa Pizzarotti (Unusual advantage granted to a non-resident company), C‑558/19, EU:C:2020:806, paragraph 27 and the case-law cited).

35According to settled case-law, a tax measure which is liable to hinder the freedom of establishment is permissible only if it relates to situations which are not objectively comparable or if it can be justified by overriding reasons in the public interest recognised by EU law. It is further necessary, in such a case, that it is appropriate for ensuring the attainment of the objective in question and does not go beyond what is necessary to attain that objective (judgment of 8 October 2020, Impresa Pizzarotti (Unusual advantage granted to a non-resident company), C‑558/19, EU:C:2020:806, paragraph 28 and the case-law cited).

36In that regard, it follows from settled case-law that the comparability of a cross-border situation with an internal situation within a Member State must be examined having regard to the aim pursued by the national provisions at issue as well as to the purpose and content of those provisions (judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 69).

37However, the German Government essentially puts forward arguments relating to the need to guarantee the effectiveness of fiscal inspection of transfer pricing in order to determine whether the taxpayer’s cross-border transactions with related undertakings are compatible with market conditions, which relate less to the question of the comparability of situations than to that of the justification based on the need to guarantee the effectiveness of fiscal inspection in order to preserve the balanced allocation of the power of taxation between the Member States (see, by analogy, judgment of 31 May 2018, Hornbach-Baumarkt, C‑382/16, EU:C:2018:366, paragraph 40).

38It follows from the file submitted to the Court that such legislation, by simplifying fiscal inspection, pursues the objective of ensuring the balanced allocation of the power of taxation between Member States, which constitutes, as is apparent from the case-law of the Court, an overriding reason in the public interest (see, to that effect, judgments of 12 July 2012, Commission v Spain, C‑269/09, EU:C:2012:439, paragraph 63).

and of 8 October 2020, Impresa Pizzarotti (Unusual advantage granted to a non-resident company), C‑558/19, EU:C:2020:806, paragraph 31.

39The need to maintain a balanced allocation of the power of taxation between the Member States may be capable of justifying a difference in treatment where the system in question is designed to prevent conduct liable to jeopardise the right of a Member State to exercise its power of taxation in relation to activities carried out within its territory (judgment of 31 May 2018, Hornbach-Baumarkt, C‑382/16, EU:C:2018:366, paragraph 43).

40In that regard, the Court has already held that permitting subsidiaries of non-resident companies to transfer their profits in the form of unusual advantages to their parent companies may well undermine the balanced allocation of the power of taxation between Member States and that it would be liable to undermine the very system of the allocation of the power of taxation between the Member States, because the Member State of the subsidiary granting such advantages would be forced to renounce its right, in its capacity as the State of residence of that subsidiary, to tax that subsidiary’s income in favour, possibly, of the Member State in which the recipient parent company has its registered office (see, to that effect, judgment of 8 October 2020, Impresa Pizzarotti (Unusual advantage granted to a non-resident company), C‑558/19, EU:C:2020:806, paragraph 32 and the case-law cited).

41Consequently, by requiring the taxpayer, in this case the subsidiary resident in the Member State of taxation, to provide documentation relating to his, her or its cross-border business transactions with undertakings with which he, she or it has a relationship of interdependence and concerning both the nature and conditions of those transactions and the economic and legal bases for agreements on prices and other terms and conditions, the obligation to provide fiscal documentation enables that Member State to monitor more effectively and with greater precision whether those transactions were concluded in accordance with market conditions and to exercise its power of taxation in relation to activities carried out within its territory (see, by analogy, judgment of 8 October 2020, Impresa Pizzarotti (Unusual advantage granted to a non-resident company), C‑558/19, EU:C:2020:806, paragraph 33).

42Therefore, national legislation such as that providing for the obligation to furnish fiscal documentation, which ensures that a taxpayer’s fiscal inspection is more effective and precise, and which seeks to prevent profits generated in the Member State concerned from being transferred outside the tax jurisdiction of that Member State by means of transactions that are not in accordance with market conditions, without being taxed, is appropriate for ensuring the preservation of the allocation of the power of taxation between Member States (see, by analogy, judgment of 8 October 2020, Impresa Pizzarotti (Unusual advantage granted to a non-resident company), C‑558/19, EU:C:2020:806, paragraph 34).

43Nevertheless, it is important that such legislation does not go beyond what is necessary to attain the objective pursued.

44That will be the case if the taxpayer is given an opportunity, without being subject to undue administrative constraints, to produce relevant evidence relating to cross-border business transactions with undertakings with which the taxpayer has a relationship of interdependence (see, by analogy, judgment of 8 October 2020, Impresa Pizzarotti (Unusual advantage granted to a non-resident company), C‑558/19, EU:C:2020:806, paragraph 36).

45In the present case, it is apparent from the very wording of the question referred that the obligation to provide fiscal documentation concerns ‘the nature and content’ of business relations, but also ‘the economic and legal bases for an … agreement on prices and other terms and conditions’. Paragraph 90(3) of the Tax Code states, however, that the nature, content and scope of the records to be kept must be specified by an implementing decree the content of which is not specified in the order for reference and with regard to which it is for the referring court to determine whether it is not such as to give rise to excessive administrative constraints for the taxpayer.

46It is also apparent from the order for reference that the tax authority should, as a general rule, require those documents to be submitted only in order to carry out a fiscal inspection and that, in principle, such submission is to take place within 60 days, a period which may, in duly justified cases, be extended.

47Consequently, subject to the verifications to be made in that regard by the referring court, it does not appear that such an obligation to provide fiscal documentation goes beyond what is necessary to attain the objective pursued.

48It follows that Article 49 TFEU does not, in principle, preclude such an obligation.

The tax surcharge

49With regard to the tax surcharge, which penalises failure to comply with the obligation to provide fiscal documentation, it should be noted that, although systems of penalties in the field of taxation come within the powers of the Member States in the absence of harmonisation at EU level, such systems should not have the effect of jeopardising the freedoms provided for by the FEU Treaty (see, to that effect, judgment of 3 March 2020, Google Ireland, C‑482/18, EU:C:2020:141, paragraph 37 and the case-law cited).

50In the present case, since the tax surcharge penalises failure to comply with the obligation to provide fiscal documentation, which is capable of constituting a restriction on freedom of establishment, that surcharge is itself capable of constituting such a restriction.

51However, as has been pointed out in paragraph 35 of the present judgment, such a restriction may be permissible if it is justified by overriding reasons in the public interest and in so far as, in such a case, its application is appropriate for securing the attainment of the objective pursued and does not go beyond what is necessary in order to attain it.

52The Court has also held that the imposition of penalties, including criminal penalties, may be considered to be necessary in order to ensure compliance with national rules, subject, however, to the condition that the nature and amount of the penalty imposed is, in each individual case, proportionate to the gravity of the infringement which it is designed to penalise (judgment of 3 March 2020, Google Ireland, C‑482/18, EU:C:2020:141, paragraph 47 and the case-law cited).

53As regards the question whether the tax surcharge is appropriate for securing the objective pursued by the national legislature, it should be noted that the application of a surcharge of a sufficiently high amount appears capable of deterring taxpayers subject to the obligation to provide fiscal documentation from disregarding that obligation and, thus, of preventing the Member State of taxation being deprived of the possibility of monitoring cross-border transactions effectively between companies with a relationship of interdependence in order to ensure a balanced allocation of the power of taxation between the Member States.

54The argument put forward by the applicant in the main proceedings and by the European Commission that such a surcharge may not be necessary if there are already applicable, less severe penalties in comparable national situations appears, in actual fact, to refer more to the appropriateness of the amount of the tax surcharge. In any event, it should be noted that the existence of such penalties is not apparent from the file before the Court. Furthermore, it should be noted that the fact that German legislation allegedly provides for less severe penalties in the case where the taxpayer fails, in purely internal situations, to comply with the obligations of cooperation in the context of combating tax avoidance and unfair tax competition is a priori irrelevant for the purpose of assessing the necessity of the tax surcharge, which pursues a different objective, namely that of preserving the balanced allocation of the power of taxation between the Member States.

55As regards the proportionality of that surcharge, it must be held that the imposition of a penalty equal to at least 5% and at most 10% of the excess income resulting from the correction made by the tax authorities in the event of infringement of the obligation to provide fiscal documentation, without limitation of the absolute maximum amount, and with a minimum amount of EUR 5000, including where no excess income has ultimately been established by the tax authorities, does not appear, in itself, to be liable to lead to the imposition of a disproportionate penalty amount.

56As the Commission states, the setting of the amount of that penalty according to a percentage of the adjustment of taxable income makes it possible to establish a correlation between the amount of the fine and the seriousness of the failure to fulfil obligations. Providing for a minimum penalty of EUR 5000 also makes it possible to preserve the deterrent effect of the tax surcharge where its minimum amount is too low, while setting a ceiling of 10% ensures that the amount of that surcharge is not excessive.

57That analysis is supported by the fact that the tax surcharge is not applicable if the infringement of the obligation to provide fiscal documentation is excusable or if the fault is only minor.

58Finally, the fact that the German legislation also provides, in the event of infringement of the obligation to submit a tax declaration, for the adjustment of the taxable income of the taxpayer, which is then rebuttably presumed to be underestimated, cannot justify a different interpretation.

59Those rules are different in nature from that of the tax surcharge, since they are not intended to penalise failure to comply with the obligation to provide fiscal documentation but rather to correct the amount of the taxpayer’s taxable income.

60Consequently, Article 49 TFEU must be interpreted as meaning that it also does not preclude a tax surcharge such as that at issue in the main proceedings.

61In the light of the foregoing, the answer to the question referred is that Article 49 TFEU must be interpreted as not precluding national legislation under which, in the first place, the taxpayer is subject to an obligation to provide documentation on the nature and content of, as well as on the economic and legal bases for, prices and other terms and conditions of his, her or its cross-border business transactions, with parties with which he, she or it has a relationship of interdependence, in capital or other aspects, enabling that taxpayer or those parties to exercise a definite influence over the other, and which provides, in the second place, in the event of infringement of that obligation, not only that his, her or its taxable income in the Member State concerned is rebuttably presumed to be higher than that which has been declared, and the tax authorities may carry out an estimate to the detriment of the taxpayer, but also that a surcharge of an amount equivalent to at least 5% and at most 10% of the excess income determined is imposed, with a minimum amount of EUR 5000, unless non-compliance with that obligation is excusable or if the fault involved is minor.

Costs

62Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Ninth Chamber) hereby rules:

Article 49 TFEU must be interpreted as meaning that it does not preclude national legislation under which, in the first place, the taxpayer is subject to an obligation to provide documentation on the nature and content of, as well as on the economic and legal bases for, prices and other terms and conditions of his, her or its cross-border business transactions, with parties with which he, she or it has a relationship of interdependence, in capital or other aspects, enabling that taxpayer or those parties to exercise a definite influence over the other, and which provides, in the second place, in the event of infringement of that obligation, not only that his, her or its taxable income in the Member State concerned is rebuttably presumed to be higher than that which has been declared, and the tax authorities may carry out an estimate to the detriment of the taxpayer, but also that a surcharge of an amount equivalent to at least 5% and at most 10% of the excess income determined is imposed, with a minimum amount of EUR 5000, unless non-compliance with that obligation is excusable or if the fault involved is minor.

[Signatures]

* * *

(*1) Language of the case: German.