(Reference for a preliminary ruling and a supplementary reference for a preliminary ruling from the Landgericht Baden-Baden)

(Directive 69/335/EEC – Indirect taxes on the raising of capital – National provisions which provide for notarial fees to be charged for the authentication of the transfer of shares in limited liability companies – Tax decision – Classification as a ‘duty similar to capital duty’ – Prior formality – Duties on the transfer of securities – Duties paid by way of fees or dues)

Opinion of Advocate General Geelhoed delivered on 16 June 2005

Opinion of Advocate General Trstenjak delivered on 8 March 2007

Judgment of the Court (First Chamber), 28 June 2007

Summary of the Judgment

Tax provisions – Harmonisation of laws – Indirect taxes on the raising of capital

(Council Directive 69/335, Arts 10(c) and 12(1)(a) and (e))

Article 10(c) of Directive 69/335 concerning indirect taxes on the raising of capital precludes the charging of notarial fees for the authentication of a transfer of shares in a company made as a contribution in the course of an increase in the share capital of a capital company, in a system characterised by the fact that notaries are employed as civil servants and that the fees are, at least in part, paid to the State to subsidise public expenditure.

The fact that notaries are themselves creditors of the fees in question and that the part which they have to transfer to the State is relatively moderate, has no effect on the classification of the fees as a ‘tax’ within the meaning of Directive 69/335.

Those fees cannot constitute a tax on the transfer of securities within the meaning of Article 12(1)(a) of Directive 69/335. That provision must be strictly interpreted and cannot be understood as extending to taxes other than ‘duties on the transfer of securities’ in the proper sense of the term.

Nor do those fees constitute ‘duties paid by way of fees or dues’ within the meaning of Article 12(1)(e) of Directive 69/335, since their amount increases directly, without limit, in proportion to the value of the shares transferred and thus to the underlying economic transaction. Only remuneration the amount of which is calculated on the basis of the cost of the service rendered can be qualified as ‘duties paid by way of fees or dues’. By contrast, where the amount payable is wholly unrelated to the cost of the service in question or is calculated, not by reference to the costs of the transaction for which it constitutes the consideration, but to all the operating and capital costs incurred by the administrative body, it must be regarded as a tax prohibited under Articles 10 and 11 of that directive.

(see paras 44, 46, 58-59, 62, 64-66, operative part)

28 June 2007 (*)

(Directive 69/335/EEC – Indirect taxes on the raising of capital – National provisions which provide for notarial fees to be charged for the authentication of the transfer of shares in limited liability companies – Tax decision – Classification as a ‘duty similar to capital duty’ – Prior formality – Duties on the transfer of securities – Duties paid by way of fees or dues)

In Case C‑466/03,

REFERENCE for a preliminary ruling and a supplementary reference for a preliminary ruling under Article 234 EC from the Landgericht Baden‑Baden (Germany), made by decisions of 20 October 2003 and 10 October 2005, received at the Court on 6 November 2003 and 31 October 2005 respectively, in the proceedings

Land Baden-Württemberg,

THE COURT (First Chamber),

composed of P. Jann (Rapporteur), President of the Chamber, K. Lenaerts, E. Juhász, M. Ilešič and E. Levits, Judges,

Advocates General: L.A. Geelhoed, subsequently V. Trstenjak,

Registrars: R. Grass, Registrar, subsequently B. Fülöp, Administrator,

having regard to the written procedure and further to the hearing on 9 November 2006,

after considering the observations submitted on behalf of:

– Albert Reiss Beteiligungsgesellschaft mbH, by A. Feber and H. Sandweg, Rechtsanwälte,

– the Land Baden-Württemberg, by K. Ehmann, M. Steindorfner and F. Mauch, acting as Agents,

– the Commission of the European Communities, by R. Lyal and K. Gross, acting as Agents,

after hearing the Opinions of the Advocates General at the sittings on 16 June 2005 and 8 March 2007,

gives the following

The reference for a preliminary ruling and the supplementary reference concern the interpretation of Articles 10 and 12 of Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital (OJ, English Special Edition 1969 (II), p. 412), as amended by Council Directive 85/303/EEC of 10 June 1985 (OJ 1985 L 156, p. 23) (‘Directive 69/335’).

The references were made in the context of a dispute between Albert Reiss Beteiligungsgesellschaft mbH (‘Reiss mbH’) and the Land Baden-Württemberg concerning the payment of notarial fees for the authentication of a transfer of shares in a limited liability company to Reiss mbH, that transfer having been made as a contribution in the course of an increase in the capital of that company.

Legal context

Community law

Recitals 7 to 9 of Directive 69/335 state:

‘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. …

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

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:

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

Subject to Article 2(4), for projects listed in Annex II, Member States shall determine whether the project shall be made subject to an assessment in accordance with Articles 5 to 10. Member States shall make that determination through:

(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.

The criteria of Annex III shall be taken into account, where relevant, when compiling the information in accordance with points 1 to 3.’

Directive 2014/52

Recitals 11 and 29 of Directive 2014/52 state:

‘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)]’

…

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

charge for the authentication of documents pursuant to mandatory requirements of company law.

The main proceedings and the questions referred

20On 30 July 2002 Reiss mbH decided to increase its company capital, by means of a non‑cash capital contribution, to EUR 100 000. To that effect, the sole shareholder of the company, Mr Reiss, transferred, by notarial act of 30 July 2002 (drawn up by a notary employed as a civil servant in the jurisdiction of the Oberlandesgericht Karlsruhe) to Reiss mbH, the sole shareholding which he held in another limited liability company, namely Arku Maschinenbau GmbH (‘Arku GmbH’).

21The increase in capital was entered in the commercial register at the Amtsgericht (Local Court) Baden‑Baden (Germany) on 4 November 2002. Apart from other charges, the civil servant in charge of levying duty demanded from Reiss mbH payment of notarial fees in the amount of EUR 11 424 for the authentication of the transfer of the sole shareholding in Arku GmbH. That amount was calculated on the basis of a transaction value of EUR 3 763 443.90.

22Reiss mbH brought an action challenging the validity of that taxation in the light of Community law.

23The Amtsgericht Baden‑Baden having dismissed that action, Reiss mbH brought an appeal against that decision before the referring court.

24In those circumstances, the Landgericht (Regional Court) Baden‑Baden decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Does Article 10(c) of … Directive 69/335 … also encompass charges for the notarially attested transfer of shares in a private limited company?’

25In considering this case, the Court initially decided to give its ruling by reasoned order under Article 104(3) of its Rules of Procedure. However, following objections by the Land Baden‑Württemberg that certain aspects of the answer to the preliminary question could not be clearly deduced from existing case‑law, it reconsidered and decided to give a judgment on the reference for a preliminary ruling.

26On 10 October 2005 the Landgericht Baden-Baden referred a supplementary question to the Court, in order to take account of the legislative amendment brought about by the Law of 28 July 2005:

‘Do the notarial charges cease to constitute a tax for the purposes of Directive 69/335 if the State waives its claim to the portion of the charges due to it in respect of the legal transaction and therefore leaves the charges – minus a sum to recoup expenditure, at the flat rate of 15%, for the State – to the notary in the civil service himself, but the notary otherwise remains integrated into the administrative organisation and is remunerated by the State for the performance of public duties?’

28Reiss mbH seeks the reopening of the oral procedure so that the findings made by Advocate General Trstenjak in her Opinion on the economic risk and the liability of notaries employed as civil servants can be ascertained.

29In that regard, it should be noted that the Court may, of its own motion, on a proposal from the Advocate General or at the request of the parties, order the reopening of the oral procedure in accordance with Article 61 of the Rules of Procedure, if it considers that it lacks sufficient information or that the case should be decided on the basis of an argument which has not been discussed between the parties (Case C‑309/99 Wouters and Others [2002] ECR I‑1577, paragraph 42, and Case C-210/03 Swedish Match [2004] ECR I‑11893, paragraph 25).

30In the present case, however, the Court takes the view, after hearing the Advocate General, that it has all the information necessary for it to answer the questions referred. The application for the oral procedure to be reopened must therefore be rejected.

31In those circumstances, the application for measures of inquiry to be prescribed must also be rejected.

The questions referred

32By its questions, which need to be examined together, the referring court asks, in substance, whether Directive 69/335 precludes the charging of notarial fees for the authentication of a transfer of shares in a company, made as a contribution in the course of an increase in the capital of a capital company, in a system characterised by the fact that the notaries are employed as civil servants and that the fees are, at least in part, paid to the State to subsidise public expenditure.

33Maintaining that the first question should be answered in the negative, namely that the fees in dispute in the main proceedings do not fall within the field of application of Directive 69/335 and in particular Article 10(c) thereof, the government of the Land Baden‑Württemberg submits that, in reality, the referring court has no need of an answer to the supplementary question and that it is therefore inadmissible.

34In that regard, it must be recalled that a reference from a national court may be refused only if it is quite obvious that the interpretation of Community law sought bears no relation to the actual facts of the main action or to its purpose, or where the problem is hypothetical or the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see, in particular, Case C‑344/04 IATA and ELFAA [2006] ECR I‑403, paragraph 24 and the case‑law cited).

35However, that is not the situation in the case in the main proceedings. It is not quite obvious that the fees in dispute are outside the field of application of Directive 69/335 and that, consequently, the supplementary question should be regarded as being unrelated to the subject‑matter of the case in the main proceedings.

36The question whether those fees fall within the field of application of Directive 69/335 is not, furthermore, a question of admissibility but of substance and must be examined in that context.

37The supplementary question therefore must be answered.

Substance

38It must, first, be examined whether fees, such as those in dispute in the main proceedings, constitute a ‘tax’ for the purposes of Directive 69/335, then, whether those fees fall within the prohibition in Article 10 of Directive 69/335, and finally, if so, whether they could possibly come under one of the provisions laid down in Article 12 of that directive.

The meaning of ‘tax’ for the purposes of Directive 69/335

39It is apparent from the case‑law that, in the light of the objectives pursued by Directive 69/335, the meaning of ‘tax’ for the purposes of that directive must, in principle, be broadly interpreted (see, to that effect, Case C‑426/98 Commission v Greece [2002] ECR I‑2793, paragraph 25, and Case C‑22/03 Optiver and Others [2005] ECR I‑1839, paragraphs 30 and 31).

40According to the case‑law, notarial fees must be classed as ‘tax’ for the purposes of Directive 69/335 where they are charged for a transaction covered by that directive by notaries who are employed as civil servants and are, at least in part, paid to the State to subsidise public expenditure (see, to that effect, the order of the Court in Case C‑264/00 Gründerzentrum [2002] ECR I‑3333, paragraph 27; Case C‑165/03 Längst [2005] ECR I‑5637, paragraph 37; and Case C‑193/04 Organon Portuguesa [2006] ECR I‑7271, paragraph 17).

41As regards the fees in dispute in the main proceedings, it should be recalled that the Court has already held that those conditions were met in the context of the system previously in force in the jurisdiction of the Oberlandesgericht Karlsruhe, of which the Amtsgericht Baden‑Baden is part, where notaries were employed as civil servants and where the duties charged to notarially attest an act were paid in part to the State to finance its official business (see, to that effect, the order in Gründerzentrum, paragraph 28).

42The changes made to that system by the Law of 28 July 2005 are not such as to justify a different conclusion in the case in the main proceedings.

43The notaries remain civil servants employed by the State. Moreover, they are still required to pay part of those fees to the State. In addition, that law states explicitly that the fees and the costs relating to the activity of notaries are levied for the benefit of the State treasury.

44That finding cannot be invalidated by the fact that notaries employed as civil servants in the jurisdiction of the Oberlandesgericht Karlsruhe are, since the Law of 28 July 2005, now themselves creditors of the fees in question and that the part which they have to transfer to the State is relatively moderate, namely 15% of the total fees.

45First, in the cases which gave rise to the judgments referred to above, namely Case C‑56/98 Modelo (‘Modelo I’) [1999] ECR I‑6427, paragraphs 19 and 23; Case C‑19/99 Modelo (‘Modelo II’) [2000] ECR I‑7213, paragraphs 19 and 23; and Längst and Organon Portuguesa (see, respectively, paragraphs 41 to 43 and paragraphs 11 and 17), the fees in question were also initially made by notaries who were civil servants, and then transferred in part to the State.

46Second, in those same cases and in the case which gave rise to the order in Gründerzentrum, the fees at issue were classed as ‘tax’ for the purposes of Directive 69/335 irrespective of the amount of the part transferred to the State. Although it may be inferred from the facts described in Längst that the State received approximately 66% of the fees, the Court did not find that fact to be relevant for the purposes of that classification. Similarly, none of the other judgments cited above specifies the amount of the part transferred to the State. Consequently, the question of the specific amount to be transferred to the State by a notary employed as a civil servant has no bearing, a priori, on whether fees may be classified as ‘tax’.

47It follows that, in the light of the case‑law cited above, fees such as those at issue in the main proceedings constitute a ‘tax’ for the purposes of Directive 69/335.

The prohibition of taxes akin to capital duty (Article 10(c) of Directive 69/335)

48It should be recalled at the outset that Article 10 of Directive 69/335, read in the light of the last recital in the preamble to the directive, prohibits taxes with the same characteristics as a capital duty (see, in particular, Joined Cases C‑71/91 and C‑178/91 Ponente Carni and Cispadana Costruzioni [1993] ECR I‑1915, paragraph 29, and Case C‑2/94 Denkavit Internationaal and Others [1996] ECR I‑2827, paragraph 23).

49Article 10(c) of Directive 69/335 thus encompasses, inter alia, taxes in any form which are payable in respect of registration or any other formal requirement before the commencement of business, to which a company may be subject by reason of its legal form.

50That prohibition is in addition to those set out in Article 10(a) and (b) of that directive, which refer to the scenarios described in Article 4 of the directive, and is justified by the fact that, even though the taxes in question are not imposed on capital contributions as such, they are nevertheless imposed on account of essential formalities connected with the company’s legal form, in other words on account of the instrument employed for raising capital, so that their continued existence might also frustrate the aims of that directive (see, to that effect, Case C‑264/04 Badischer Winzerkeller [2006] ECR I‑5275, paragraph 19, and the case‑law cited).

51The Court inferred from that that Article 10(c) of Directive 69/335 must, in principle, be broadly interpreted as including not only procedures which are formally required before the capital company commences business, but also the formalities which are necessary for carrying on the business of that company (see, to that effect, Case C‑188/95 Fantask and Others [1997] ECR I‑6783, paragraph 22; Case C‑347/96 Solred [1998] ECR I‑937, paragraph 22; and Badischer Winzerkeller, paragraph 25).

52In this regard, the Court has held many times that where a transaction carried out by a capital company, such as, for example, the increase of its company capital, the amendment of its statutes or the acquisition of immoveable property following a merger, is subject to legal formalities under national law, that formality is necessary for carrying on that company’s business (see, to that effect, Badischer Winzerkeller, paragraphs 26 and 27, and the case‑law cited).

53Thus, the Court has, for example, held to be unlawful for the purposes of Article 10(c) of Directive 69/335 taxes on the registration of a new company (Ponente Carni and Cispadana Costruzioni, paragraphs 30 and 31, and Fantask and Others

paragraph 22), on the authentication of the formation of a new company (the order in <i>Gründerzentrum</i>, paragraph 30), on the recording of an increase in share capital (<i>Fantask and Others</i>, paragraph 22; Case C‑134/99 <i>IGI</i> [2000] ECR I‑7717, paragraph 25; and Case C‑206/99 <i>SONAE</i> [2001] ECR I‑4679, paragraph 31), on the authentication of an increase in share capital (<i>Modelo I</i>, paragraph 26), and on the authentication of the payment of the amount of the share capital not yet paid up (<i>Solred</i>, paragraph 23).

54In the case in the main proceedings, as also pointed out by Advocate General Geelhoed in points 20 to 23 of his Opinion, the fees in dispute were charged for the authentication of the transfer of shares in a company (Arku GmbH), made in the form of a contribution in kind in the course of an increase in the share capital of a capital company (Reiss mbH). The authentication in question thus attests a transaction on which the increase in the capital of a capital company is dependent. Since, under German law, such share transfer transactions must be authenticated, that authentication must be regarded as a formality which is necessary for carrying on the business of the capital company in question (Reiss mbH).

55It follows that fees such as those in dispute in the case in the main proceedings fall within Article 10(c) of Directive 69/335, which means that the charging of such fees is, in principle, prohibited.

56It is still however necessary to assess whether such fees fall with the field of application of one of the provisions laid down in Article 12 of Directive 69/335.

The provision authorising the charging of duties on the transfer of securities (Article 12(1)(a) of Directive 69/335)

Article 12(1)(a) of Directive 69/335 states that Member States may charge duties on the transfer of securities.

58Since Article 12(1)(a) of Directive 69/335 limits the prohibitions laid down in Articles 10 and 11 of that directive, it must be strictly interpreted and cannot be understood as extending to taxes other than ‘duties on the transfer of securities’ in the proper sense of the term.

59It follows that, in so far as the fees at issue in the main proceedings do not constitute a duty on the transfer of securities, but, on the contrary, notarial fees which fall within Article 10(c) of Directive 69/335, they do not fall within the field of application of Article 12(1)(a) of Directive 69/335.

The derogation authorising duties paid by way of fees or dues (Article 12(1)(e) of Directive 69/335)

Article 12(1)(e) of Directive 69/335 states that Member States may charge duties paid by way of fees or dues.

61It should be pointed out, in that regard, that ‘duties paid by way of fees or dues’ are duties charged in consideration for a service provided (see, to that effect, Case C‑426/98 <i>Commission</i> v <i>Greece</i> [2002] ECR I‑2793, paragraph 36).

62Consequently, as stated by Advocate General Geelhoed in point 32 of his Opinion, only remuneration the amount of which is calculated on the basis of the cost of the service rendered can be qualified as ‘duties paid by way of fees or dues’ within the meaning of Article 12(1)(e) of Directive 69/335. By contrast, where the amount payable is wholly unrelated to the cost of the service in question or is calculated, not by reference to the costs of the transaction for which it constitutes the consideration, but to all the operating and capital costs incurred by the administrative body, it must be regarded as a tax falling exclusively within the prohibition laid down in Articles 10 and 11 of that directive (see, to that effect, <i>Ponente Carni and Cispadana Costruzioni</i>, paragraphs 41 and 42, and the order in <i>Gründerzentrum</i>, paragraph 31).

63Thus, a charge, the amount of which is determined in relation to the value of the underlying economic transaction and which increases directly, without limit, in proportion to that value, cannot, by its very nature, constitute ‘duties paid by way of fees or dues’ within the meaning of Article 12(1)(e) of Directive 69/335. Even though in some cases the complexity of a service rendered by the administrative body may be linked to the value of the underlying economic transaction, the amount of such a charge will generally bear no relation to the costs actually incurred by that administrative body (see, to that effect, <i>Modelo I</i>, paragraph 30, and <i>IGI</i>, paragraph 31).

64In the case in the main proceedings, the amount of the fees in dispute increases directly in proportion to the value of the shares transferred, thus, in proportion to the underlying economic transaction. In addition, given that those fees are charged without any limit having been put in place, they are capable of amounting to a considerable sum. The German Government has not even submitted that it corresponds to the costs of the service rendered.

65Accordingly, those fees are not paid by way of fees or dues within the meaning of Article 12(1)(e) of Directive 69/335.

66In the light of the above, the answer to the questions referred must be that Article 10(c) of Directive 69/335 precludes the charging of notarial fees for the authentication of a transfer of shares in a company made as a contribution in the course of an increase in the share capital of a capital company, in a system characterised by the fact that the notaries are employed as civil servants and that the fees are, at least in part, paid to the State to subsidise public expenditure.

Costs

67Since 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 (First Chamber) hereby rules:

Article 10(c) of Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital, as amended by Council Directive 85/303/EEC of 10 June 1985, precludes the charging of notarial fees for the authentication of a transfer of shares in a company made as a contribution in the course of an increase in the share capital of a capital company, in a system characterised by the fact that notaries are employed as civil servants and that the fees are, at least in part, paid to the State to subsidise public expenditure.

[Signatures]

*

Language of the case: German.