26 April 2018 (*1)

(Reference for a preliminary ruling — Regional tax on large retail establishments — Freedom of establishment — Protection of the environment and town and country planning — State aid — Selective measure — Letter from the Commission stating that no further action will be taken on a complaint — Existing aid)

In Case C‑233/16,

REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunal Supremo (Supreme Court, Spain), made by decision of 10 March 2016, received at the Court on 25 April 2016, in the proceedings

Generalitat de Catalunya,

THE COURT (First Chamber),

composed of R. Silva de Lapuerta, President of the Chamber, C.G. Fernlund, J.-C. Bonichot (Rapporteur), A. Arabadjiev and E. Regan, Judges,

Advocate General: J. Kokott,

Registrar: L. Carrasco Marco, Administrator,

having regard to the written procedure and further to the hearing on 6 July 2017,

after considering the observations submitted on behalf of

–the Asociación Nacional de Grandes Empresas de Distribución (ANGED), by J. Pérez-Bustamante Köster and F. Löwhagen, abogados, and by J.M. Villasante García, procurador,

–the Generalitat de Catalunya, by R. Revilla Ariet and R. Riu Fortuny, letrados, and by F. Velasco Muñoz Cuellar, procurador,

–the European Commission, by N. Gossement, P. Němečková and G. Luengo, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 9 November 2017,

gives the following

This request for a preliminary ruling concerns the interpretation of Articles 49 and 54 TFEU and Article 107(1) TFEU.

The request has been made in proceedings between the Asociación Nacional de Grandes Empresas de Distribución (ANGED) and the Generalitat de Catalunya (Regional Government of Catalonia, Spain) concerning the lawfulness of a tax on large retail establishments situated in the Autonomous Community of Catalonia.

Legal context

EU law

Article 1(b) and (d) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ 1999 L 83, p. 1) provides:

‘For the purposes of this Regulation:

…

(b)“existing aid” shall mean:

…

(ii)authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council;

(iv)aid which is deemed to be existing aid pursuant to Article 15;

(v)aid which is deemed to be an existing aid because it can be established that at the time it was put into effect it did not constitute an aid, and subsequently became an aid due to the evolution of the common market and without having been altered by the Member State. Where certain measures become aid following the liberalisation of an activity by Community law, such measures shall not be considered as existing aid after the date fixed for liberalisation;

…

(d)“aid scheme” shall mean any act on the basis of which, without further implementing measures being required, individual aid awards may be made to undertakings defined within the act in a general and abstract manner and any act on the basis of which aid which is not linked to a specific project may be awarded to one or several undertakings for an indefinite period of time and/or for an indefinite amount’.

Article 15 of Regulation No 659/1999 provides:

‘1. The powers of the Commission to recover aid shall be subject to a limitation period of ten years.

The foregoing provisions have been reproduced in identical form in Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ 2015 L 248, p. 9).

Spanish law

The Ley 16/2000 del Parlamento de Cataluña del impuesto sobre grandes establecimientos comerciales (Law 16/2000 of the Parliament of Catalonia on the tax on large retail establishments) of 29 December 2000 (DOGC No 3295 of 30 December 2000 and BOE No 20 of 23 January 2001, ‘Law 16/2000’) introduced a tax on large retail establishments (‘the IGEC’) within the territory of the Autonomous Community of Catalonia.

Article 2 of Law 16/2000 provides that that tax is chargeable on the exceptional financial capacity of large retail establishments which, on account of their large sales area, may acquire a dominant position and produce adverse effects on the territory and the environment, the cost of which they do not bear.

Article 3 of that law provides that revenue from the IGEC is to be used for the purpose of modernising local business in Catalonia and carrying out action plans in areas affected by the installation of large retail establishments.

Article 4 of that law provides that the chargeable event for the IGEC is the use of sales areas equal to or greater than 2500 m² by individual large retail establishments.

Under Article 5 of Law 16/2000, individual large retail establishments which pursue the business of a garden centre or of selling vehicles, construction materials, machinery or industrial supplies are exempt from that tax.

Article 6 of that law provides that a taxable person, for the purposes of the IGEC, is a natural or legal person who owns an individual large retail establishment, whether or not this is situated within a large collective retail establishment.

Article 8 of that law provides that the net taxable amount is reduced by 60% for retail establishments whose business concerns essentially the sale of furniture, sanitary ware, and doors and windows, and for do-it-yourself stores.

Article 11 of that law sets out detailed rules for calculating that tax, which take into account, inter alia, the number of inhabitants of the municipality in which the establishment is situated.

The dispute in the main proceedings and the questions referred for a preliminary ruling

By Law 16/2000, a regional tax on large commercial establishments was introduced throughout the Autonomous Community of Catalonia in order to offset the potential impact of those large retail establishments on the territory and the environment. By decreto 342/2001 por el que se aprueba el Reglamento del impuesto sobre grandes establecimientos comerciales (Decree 342/2001 approving the regulations on the tax on large retail establishments) of 24 December 2001 (DOGC No 3542 of 28 December 2001), the Regional Government of Catalonia implemented that tax.

In 2002, the ANGED, a national association of large distribution companies, brought an action for annulment of that decree before the Tribunal Superior de Justicia de Cataluña (High Court of Justice, Catalonia, Spain) on the ground that it was incompatible with the principle of freedom of establishment and with the law on State aid. That court reserved its decision pending the outcome of an action brought by the Spanish Government before the Tribunal Constitucional (Constitutional Court, Spain) against that legislation. Following the dismissal of that action by the Tribunal Constitucional (Constitutional Court) on 5 June 2012, the Tribunal Superior de Justicia de Cataluña (High Court of Justice, Catalonia) also dismissed the action brought by the ANGED. That association then appealed against that ruling before the Tribunal Supremo (Supreme Court, Spain).

The ANGED had also filed a complaint with the Commission concerning the introduction of the IGEC and the claim that it amounted to State aid. Further to a request for further information submitted to the Spanish authorities, the Commission informed those authorities by letter of 2 October 2003 that it had closed its investigation and would take no further action on the complaint. It had concluded, after analysing the features of the IGEC in the light of Article 87(1) EC, that that tax was compatible with the law on State aid, as the revenue from the tax was not intended to be used to support specific businesses or business sectors.

However, following a new complaint filed by the ANGED in 2013, the Commission informed the Spanish authorities by letter of 28 November 2014 that, further to a new preliminary assessment of the IGEC system, the exemption granted to small retail establishments and to certain specialist establishments could be regarded as State aid incompatible with the internal market, and requested the Kingdom of Spain to withdraw or amend that tax.

In those circumstances, the Tribunal Supremo (Supreme Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Must Articles 49 and 54 TFEU be interpreted as precluding a regional tax imposed on the use of individual large retail spaces with sales areas covering 2500 m² or more due to their potential effect on planning, the environment and urban retailing patterns in the region, but which, as a matter of law, applies irrespective of whether or not such retail establishments are actually situated in a consolidated urban area and in practice usually affects undertakings from other Member States, given that:

(a) it does not affect traders who own several retail establishments, each with sales areas of less than 2500 m², whatever the total sales area of all of those establishments together;

(b) it exempts collective large retail establishments;

(c) it excludes individual retail establishments which are garden centres and those selling vehicles, building materials, machinery and industrial supplies; and;

(d) retail establishments given over essentially to the sale of furniture, sanitary ware and doors and windows and those that are do-it-yourself stores are required to pay the tax on only 40% of the relevant net tax base?

(2) Must Article 107(1) TFEU be interpreted as meaning that the following constitute State aid prohibited under that provision:

(a) the full exemption from the IGEC of individual retail establishments whose sales areas are less than 2500 m², of collective retail establishments and of individual retail establishments which are garden centres and those selling vehicles, building materials, machinery and industrial supplies; and

(b) the partial exemption from the IGEC of individual retail establishments given over essentially to the sale of furniture, sanitary ware and doors and windows and of do-it-yourself stores?

(3) If those full and partial exemptions from the IGEC constitute State aid within the meaning of Article 107(1) TFEU, what would the scope ratione temporis of such a finding be, in the light of the [letter of the Commission dated 2 October 2003]?’

Consideration of the questions referred

Admissibility

The Regional Government of Catalonia claims that the request for a preliminary ruling is inadmissible on the ground that the order for reference does not state sufficient reasons and does not set out in detail the factual and legal context of the dispute in the main proceedings.

However, the order for reference contains all the facts and points of law necessary to enable the Court to provide useful answers to the referring court on the questions asked.

However, the order for reference contains all the facts and points of law necessary to enable the Court to provide useful answers to the referring court on the questions asked.

The Regional Government of Catalonia also argues that the request for a preliminary ruling is inadmissible as regards the part of the request concerning freedom of establishment, on the ground that the situation in the main proceedings is a purely internal one.

21The Regional Government of Catalonia also argues that the request for a preliminary ruling is inadmissible as regards the part of the request concerning freedom of establishment, on the ground that the situation in the main proceedings is a purely internal one.

22Nonetheless, as observed by the Advocate General in point 21 of her Opinion, as the referring court has been seised in proceedings for the annulment of provisions which apply not only to its own nationals but also to those of other Member States, the decision of the referring court that will be adopted following the present ruling will also have effects on nationals of other Member States, so that the Court must give an answer to the questions put to it in relation to the provisions of the Treaty, even though the dispute in the main proceedings is confined in all respects within a single Member State (see, to that effect, judgments of 8 May 2013, Libert and Others, C‑197/11 and C‑203/11, and of 15 November 2016, Ullens de Shooten, C‑268/15).

Nonetheless, as observed by the Advocate General in point 21 of her Opinion, as the referring court has been seised in proceedings for the annulment of provisions which apply not only to its own nationals but also to those of other Member States, the decision of the referring court that will be adopted following the present ruling will also have effects on nationals of other Member States, so that the Court must give an answer to the questions put to it in relation to the provisions of the Treaty, even though the dispute in the main proceedings is confined in all respects within a single Member State (see, to that effect, judgments of 8 May 2013, Libert and Others, C‑197/11 and C‑203/11, EU:C:2013:288, paragraph 35, and of 15 November 2016, Ullens de Shooten, C‑268/15, EU:C:2016:874, paragraph 51).

23As for the objection of inadmissibility raised by the Regional Government of Catalonia to the effect that measures such as those at issue in the main proceedings do not affect trade between Member States and do not distort competition, given the local nature of retail trade business, it suffices to note that it is a question on the interpretation of Article 107(1) TFEU, which cannot lead to the request for a preliminary ruling being declared inadmissible.

As for the objection of inadmissibility raised by the Regional Government of Catalonia to the effect that measures such as those at issue in the main proceedings do not affect trade between Member States and do not distort competition, given the local nature of retail trade business, it suffices to note that it is a question on the interpretation of Article 107(1) TFEU, which cannot lead to the request for a preliminary ruling being declared inadmissible.

24During the proceedings, the Regional Government of Catalonia also argued that the request for a preliminary ruling should be dismissed as inadmissible, as the dispute in the main proceedings has become devoid of purpose following the amendment of Law 16/2000.

During the proceedings, the Regional Government of Catalonia also argued that the request for a preliminary ruling should be dismissed as inadmissible, as the dispute in the main proceedings has become devoid of purpose following the amendment of Law 16/2000.

25However, the referring court informed the Court, by letter of 1 June 2017, received at the Court on 7 June 2017, that the dispute in the main proceedings had, in its view, retained its purpose, despite the amendment of the legislation at issue. In addition, that court maintained its request for a preliminary ruling.

However, the referring court informed the Court, by letter of 1 June 2017, received at the Court on 7 June 2017, that the dispute in the main proceedings had, in its view, retained its purpose, despite the amendment of the legislation at issue. In addition, that court maintained its request for a preliminary ruling.

Finally, it should be noted that although the illegality, under the law on State aid, of a tax exemption does not affect the legality of the tax itself, so that the persons liable to pay that tax cannot plead that it is unlawful in order to avoid payment of that tax (see judgment of 27 October 2005, Distribution Casino France and Others, C‑266/04 to C‑270/04, C‑276/04 and C‑321/04 to C‑325/04, EU:C:2005:657, paragraph 44), the dispute in the main proceedings does not concern an application to be exempted from the contested tax, but the legality of the rules relating to that tax as a matter of EU law. It is therefore by no means obvious that the second and third questions are not of genuine interest for the purpose of ruling on the dispute before the referring court (see, by analogy, judgment of 15 June 2006, Air Liquide Industries Belgium, C‑393/04 and C‑41/05, EU:C:2006:403, paragraph 25).

Finally, it should be noted that although the illegality, under the law on State aid, of a tax exemption does not affect the legality of the tax itself, so that the persons liable to pay that tax cannot plead that it is unlawful in order to avoid payment of that tax (see judgment of 27 October 2005, Distribution Casino France and Others, C‑266/04 to C‑270/04, C‑276/04 and C‑321/04 to C‑325/04), the dispute in the main proceedings does not concern an application to be exempted from the contested tax, but the legality of the rules relating to that tax as a matter of EU law. It is therefore by no means obvious that the second and third questions are not of genuine interest for the purpose of ruling on the dispute before the referring court (see, by analogy, judgment of 15 June 2006, Air Liquide Industries Belgium, C‑393/04 and C‑41/05).

27The request for a preliminary ruling is therefore admissible in its entirety.

The request for a preliminary ruling is therefore admissible in its entirety.

Substance

Substance

The first question

The first question

By its first question, the referring court asks, in essence, if Articles 49 and 54 TFEU should be interpreted as precluding a tax levied on large retail establishments, such as that in the main proceedings.

28By its first question, the referring court asks, in essence, if Articles 49 and 54 TFEU should be interpreted as precluding a tax levied on large retail establishments, such as that in the main proceedings.

29According to settled case-law, freedom of establishment aims to guarantee the benefit of national treatment in the host Member State to nationals of another Member State and to companies referred to in Article 54 TFEU by prohibiting any discrimination based on the place in which companies have their seat (see, inter alia, judgments of 12 December 2006, Test Claimants in Class IV of the ACT Group Litigation, C‑374/04, and of 14 December 2006, Denkavit Internationaal and Denkavit France, C‑170/05).

According to settled case-law, freedom of establishment aims to guarantee the benefit of national treatment in the host Member State to nationals of another Member State and to companies referred to in Article 54 TFEU by prohibiting any discrimination based on the place in which companies have their seat (see, inter alia, judgments of 12 December 2006, Test Claimants in Class IV of the ACT Group Litigation, C‑374/04, EU:C:2006:773, paragraph 43, and of 14 December 2006, Denkavit Internationaal and Denkavit France, C‑170/05, EU:C:2006:783, paragraph 22).

30The rules regarding equal treatment forbid not only overt discrimination based on the location of the seat of companies, but also all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result (judgment of 5 February 2014, Hervis Sport-és Divatkereskedelmi, C‑385/12).

The rules regarding equal treatment forbid not only overt discrimination based on the location of the seat of companies, but also all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result (judgment of 5 February 2014, Hervis Sport-és Divatkereskedelmi, C‑385/12, EU:C:2014:47, paragraph 30 and the case-law cited).

Moreover, a tax based on an apparently objective criterion of differentiation but that disadvantages in most cases, given its features, companies whose seat is in other Member States and that are in a comparable situation to companies whose seat is situated in the Member State where that tax is charged, constitutes indirect discrimination based on the location of the seat of the companies, which is prohibited under Articles 49 and 54 TFEU (see, to that effect, judgment of 5 February 2014, Hervis Sport-és Divatkereskedelmi, C‑385/12, EU:C:2014:47, paragraphs 37 to 41).

31Moreover, a tax based on an apparently objective criterion of differentiation but that disadvantages in most cases, given its features, companies whose seat is in other Member States and that are in a comparable situation to companies whose seat is situated in the Member State where that tax is charged, constitutes indirect discrimination based on the location of the seat of the companies, which is prohibited under Articles 49 and 54 TFEU (see, to that effect, judgment of 5 February 2014, Hervis Sport-és Divatkereskedelmi, C‑385/12).

In the case in the main proceedings, the legislation in question lays down a criterion relating to the sales area of the establishment which does not give rise to any direct discrimination.

32In the case in the main proceedings, the legislation in question lays down a criterion relating to the sales area of the establishment which does not give rise to any direct discrimination.

Nor does the evidence submitted to the Court show that that criterion disadvantages in most cases nationals from other Member States or companies whose seat is in another Member State.

33Nor does the evidence submitted to the Court show that that criterion disadvantages in most cases nationals from other Member States or companies whose seat is in another Member State.

More specifically, neither the information in the letter sent by the Commission to the Spanish authorities on 7 July 2004, referred to in the order for reference, from which it is apparent that undertakings from other Member States represent 61.5% of the area occupied by undertakings of over 2500 m² subject to the IGEC, nor the information provided by the ANGED in its written observations, from which it is apparent, inter alia, that 52% of tax paid by way of IGEC is borne by large retail establishments of other Member States, are sufficient, having regard, inter alia, to the level of those percentages, to show that that is the case.

34More specifically, neither the information in the letter sent by the Commission to the Spanish authorities on 7 July 2004, referred to in the order for reference, from which it is apparent that undertakings from other Member States represent 61.5% of the area occupied by undertakings of over 2500 m² subject to the IGEC, nor the information provided by the ANGED in its written observations, from which it is apparent, inter alia, that 52% of tax paid by way of IGEC is borne by large retail establishments of other Member States, are sufficient, having regard, inter alia, to the level of those percentages, to show that that is the case.

Consequently, the answer to the first question is that Articles 49 and 54 TFEU must be interpreted as not precluding a tax levied on large retail establishments, such as that in the main proceedings.

35Consequently, the answer to the first question is that Articles 49 and 54 TFEU must be interpreted as not precluding a tax levied on large retail establishments, such as that in the main proceedings.

The second question

The second question

By its second question, the referring court asks, in essence, whether a tax such as that at issue in the main proceedings imposed on large retail establishments according, in essence, to their sales area, constitutes State aid within the meaning of Article 107(1) TFEU, to the extent that it exempts establishments whose sales area is less than 2500 m² and those which pursue the business of a garden centre or of selling vehicles, construction materials, machinery or industrial supplies and reduces by 60% the tax base of establishments selling furniture, sanitary ware and doors and windows and those that are do-it-yourself stores.

36By its second question, the referring court asks, in essence, whether a tax such as that at issue in the main proceedings imposed on large retail establishments according, in essence, to their sales area, constitutes State aid within the meaning of Article 107(1) TFEU, to the extent that it exempts establishments whose sales area is less than 2500 m² and those which pursue the business of a garden centre or of selling vehicles, construction materials, machinery or industrial supplies and reduces by 60% the tax base of establishments selling furniture, sanitary ware and doors and windows and those that are do-it-yourself stores.

EU:C:2016:981, paragraph 57 and the case-law cited).

It should also be recalled that the legal reference framework for the purpose of assessing the selectivity of a measure must not necessarily be determined within the territory of the Member State concerned, but may be that of the territory within which a regional or local authority exercises the powers conferred on it by the constitution or by law. Such is the case when that entity enjoys a legal and factual status which makes it sufficiently autonomous in relation to the central government of a Member State, with the result that, by the measures it adopts, it is that body and not the central government which plays a fundamental role in the definition of the political and economic environment in which undertakings operate (see, to that effect, judgment of 11 September 2008, UGT-Rioja and Others, C‑428/06 to C‑434/06, paragraphs 47 to 50 and the case-law cited).

A measure that differentiates between undertakings which, in the light of the objective pursued by the legal regime concerned, are in a comparable factual and legal situation and is, therefore, a priori selective, does not, however, constitute State aid within the meaning of Article 107(1) TFEU where the Member State concerned is able to demonstrate that the differentiation is justified since it flows from the nature or overall structure of the system of which it forms part (judgment of 21 December 2016, Commission v World Duty Free Group and Others, C‑20/15 P and C‑21/15 P, paragraph 58 and the case-law cited).

A measure which creates an exception to the application of the general tax system may be justified by the nature and overall structure of the tax system if the Member State concerned can show that the measure results directly from the basic or guiding principles of its tax system. In that connection, a distinction must be made between, on the one hand, the objectives attributed to a particular tax scheme and which are extrinsic to it and, on the other, the mechanisms inherent in the tax system itself, which are necessary for the achievement of those objectives (judgment of 6 September 2006, Portugal v Commission, C‑88/03, paragraph 81).

It should also be borne in mind that although, in order for a tax to be established as being selective, it is not always necessary that it should derogate from a tax system considered to be an ordinary tax system, the fact that it can be so characterised is highly relevant in that regard where its effect is that two categories of operators are distinguished and are subject, a priori, to different treatment, namely those who fall within the scope of the derogating measure and those who continue to fall within the scope of the ordinary tax system, although those two categories are in a comparable situation in the light of the objective pursued by that system (judgment of 21 December 2016, Commission v World Duty Free Group and Others, C‑20/15 P and C‑21/15 P, paragraph 77).

With regard to the legislation at issue in the main proceedings, it must first be noted that the question of whether the territorial reference framework should be the Autonomous Community of Catalonia has not been disputed before the Court.

Next, although the tax criterion relating to the sales area does not appear to formally derogate from a given legal reference framework, its effect is nonetheless to exclude retail establishments whose sales area is less than 2500 m² from the scope of that tax. Thus, the IGEC cannot be distinguished from a regional tax on retail establishments whose sales areas exceed a certain threshold.

Article 107(1) TFEU defines State interventions on the basis of their effects, independently of the techniques used (judgment of 22 December 2008, British Aggregates Association, C‑487/06 P, paragraph 89).

It cannot, therefore, be excluded a priori that such a criterion enables an advantage to be given, in practice, to ‘certain undertakings or the production of certain goods’ within the meaning of Article 107(1) TFEU by mitigating their tax burden in relation to those subject to the tax at issue in the main proceedings.

In that connection, it must therefore be determined whether the retail establishments thus excluded from the scope of that tax are in a comparable situation to the establishments that come within that scope.

In the context of that analysis, account must be taken of the fact that, in the absence of EU rules governing the matter, it falls within the competence of the Member States, or of infra-State bodies having fiscal autonomy, to designate bases of assessment and to spread the tax burden across the various factors of production and economic sectors (judgment of 15 November 2011, Commission and Spain v Government of Gibraltar and United Kingdom, C‑106/09 P and C‑107/09 P, paragraph 97).