delivered on 3 June 2021 (1)

Case C‑437/19

État luxembourgeois

(Request for a preliminary ruling from the Cour administrative (Higher Administrative Court, Luxembourg))

(Reference for a preliminary ruling – Tax law – Directive 2011/16/EU – Administrative cooperation in the field of taxation – Article 1(1) – Article 5 – Article 20 – Request for information from the financial authority of another Member State – Information order made by the requested financial authority – Foreseeable relevance of the requested information – Group request for information – Identified or identifiable person – Minimum information – Charter of Fundamental Rights of the European Union – Article 47 – Right to an effective remedy before a tribunal – Statement of reasons of the information order – Disclosure of minimum information)

1.As a result of the increasing exchange of information between the tax administrations of the Member States pursuant to the Administration Cooperation Directive (‘Directive 2011/16’), questions are repeatedly raised as regards the interpretation of that directive and the rights of the persons concerned in the light of the Charter of Fundamental Rights of the European Union (‘the Charter’). The present request for a preliminary ruling is closely linked in that sense to the judgments of the Court in Berlioz Investment Fund (2) and État luxembourgeois (Right to bring an action against a request for information in tax matters). (3)

2.The Court has previously ruled in those proceedings that the ‘foreseeable relevance’ of the information requested for the purposes of taxation in the requesting State is a condition which the request for information must satisfy. Now it has occasion to clarify whether a request fulfils that requirement also where information is requested only on a group of taxpayers whose identity is ascertainable but who are not identified individually or by name. Primarily, it has to clarify how specific and precise the request must be in relation to the taxpayers so that the requested tax authority can assess the ‘foreseeable relevance’ of the requested information to the tax proceedings in the other Member State.

3.It must also specify the legal protection afforded to the person concerned. One question that arises here is whether, based on Article 47 of the Charter, the requested State must set a period of time for the review of the decision requiring the requested information to be provided (also referred to as ‘information order’) before imposing an administrative penalty. This question is particularly pressing where, as here, the addressee of the information order obtains disclosure of the minimum information referred to in Article 20(2) of Directive 2011/16 only during the course of the judicial proceedings.

II. Legal context

4.Article 47 of the Charter (‘Right to an effective remedy and to a fair trial’) states:

‘Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article. Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. Everyone shall have the possibility of being advised, defended and represented. …’

5.Recital 9 of Directive 2011/16 (4) states:

‘… The standard of “foreseeable relevance” is intended to provide for exchange of information in tax matters to the widest possible extent and, at the same time, to clarify that Member States are not at liberty to engage in “fishing expeditions” or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer. While Article 20 of this Directive contains procedural requirements, those provisions need to be interpreted liberally in order not to frustrate the effective exchange of information.’

6.Article 1(1) establishes the subject matter of Directive 2011/16:

‘This Directive lays down the rules and procedures under which the Member States shall cooperate with each other with a view to exchanging information that is foreseeably relevant to the administration and enforcement of the domestic laws of the Member States concerning the taxes referred to in Article 2.’

7.Article 5 of Directive 2011/16 provides for the procedure for the exchange of information on request:

‘At the request of the requesting authority, the requested authority shall communicate to the requesting authority any information referred to in Article 1(1) that it has in its possession or that it obtains as a result of administrative enquiries.’

8.Article 20(2) of Directive 2011/16 (‘Standard forms and computerised formats’) states:

‘The standard form referred to in paragraph 1 shall include at least the following information to be provided by the requesting authority:

(a)the identity of the person under examination or investigation;

(b)the tax purpose for which the information is sought.

The requesting authority may, to the extent known and in line with international developments, provide the name and address of any person believed to be in possession of the requested information as well as any element that may facilitate the collection of information by the requested authority. …’

9.The Council of the Organisation for Economic Cooperation and Development (OECD) adopted, on 30 July 1963, a Recommendation concerning the Avoidance of Double Taxation (‘the OECD Model Tax Convention’). (5) Article 26(1) of the OECD Model Tax Convention concerning the exchange of information provides as follows:

‘The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political subdivisions or local authorities, in so far as the taxation thereunder is not contrary to the Convention. …’

10.The information was requested at a time when the tax convention between Luxembourg and France of 1 April 1958, as amended on 24 November 2006, 3 June 2009 and 5 September 2014, was in force. Article 22(1) of the tax convention regulating the exchange of information is identical to Article 26(1) of the OECD Model Tax Convention.

11.Luxembourg transposed Directive 2011/16 by means of the Law of 29 March 2013. (6) Article 6 of the Law of 29 March 2013 reads as follows:

‘At the request of the requesting authority, the Luxembourg requested authority shall communicate to it the information that is foreseeably relevant for the administration and application of the domestic legislation of the requesting Member State relating to the taxes referred to in Article 1 that it has in its possession or that it obtains as a result of administrative enquiries.’

12.This was followed by the Law of 25 November 2014 laying down the procedure applicable to the exchange of information on request in tax matters. (7) Article 1(1) of that law provides as follows:

‘This Law shall apply from its entry into force to requests for exchange of information in tax matters made by the competent authority of a requesting State pursuant to: …

4.the amended Law of 29 March 2013 on administrative cooperation in the field of taxation …’

13.Article 2(1) and (2) of the Law of 25 November 2014 states:

‘1. Tax administrations shall be authorised to request information of any kind required in order to implement the exchange of information provided for by Conventions and laws from the holder of that information.

14.Article 3(1) and (3) of the Law of 25 November 2014, in the version applicable at the time, reads as follows:

‘1. The competent tax administration shall verify that the request for exchange of information is in order. A request for exchange of information shall be considered to be in order if it states the legal basis, identifies the competent authority making the request and contains the other information prescribed by Conventions and laws.

15.Article 5(1) of the Law of 25 November 2014 provides as follows:

‘If the information requested is not provided within 1 month of notification of the decision requiring the requested information to be provided, the holder of the information may be subject to an administrative fine of a maximum of EUR 250000. The amount of the fine shall be fixed by the director of the competent tax administration or his or her authorised representative.’

16.Article 6 of the Law of 25 November 2014 provides as follows:

‘1. No action may be brought against a request for exchange of information or a decision requiring the requested information to be provided as referred to in Article 3(1) and (3).

17.The Law of 1 March 2019 amending the Law of 25 November 2014 (8) entered into force on 9 March 2019. That law amended, in particular, Articles 3(1) and 6(1) of the Law of 25 November 2014.

18.Article 3(1) of the Law of 25 November 2014, as amended by the Law of 1 March 2019, states:

‘The competent tax administration shall verify that the request for exchange of information is in order. A request for exchange of information shall be considered to be in order if it states the legal basis, identifies the competent authority making the request and contains the other information prescribed by Conventions and laws. The competent tax administration shall satisfy itself that the requested information is not devoid of any foreseeable relevance in view of the identity of the person concerned by the request for exchange of information, the identity of the holder of the information, and the requirements of the tax procedure in question.’

19.Article 6(1) of the Law of 25 November 2014, as amended by the Law of 1 March 2019, provides as follows:

‘An action before the administrative court for annulment of the decision requiring the requested information to be provided referred to in Article 3(3) shall be available to the holder of the information. …’

III. Main proceedings

20.The main proceedings are based on a request for information addressed to the Luxembourg tax administration by the French tax administration, which the French tax administration has based on the tax convention between Luxembourg and France of 1 April 1958 and Directive 2011/16.

21.The French authorities indicated in their request for information of 27 April 2017 that they wished to conduct an investigation into F, a company established in France and alleged to be carrying on the activity of leasing a property in a municipality in France. The company L, resident in Luxembourg, was alleged to be not only the indirect parent company of F (via a company incorporated under Dutch law), but also the direct owner of another property situated in the same French municipality. The French authorities explained that individuals directly or indirectly owning immovable property situated in France are required to declare that property for the purposes of a property tax, and that they wished to know who were the shareholders and beneficial owners of the company L.

By letter of 28 February 2018 (‘decision requiring the requested information to be provided’ or ‘information order’), the Luxembourg tax administration ordered L to provide certain information as follows:

‘… The competent French authorities have sent us, dated 27 April 2017, a request for information pursuant to Directive 2011/16 … and to the tax convention between Luxembourg and France …

The legal person to which the request relates is F, a company established [in France].

Please provide us with the following information and documents in relation to the period from 1 January 2012 to 31 December 2016 …:

–Please disclose the names and addresses of L’s shareholders, together with the names and addresses of those beneficially interested, whether directly or indirectly and regardless of the type of intervening structure, in the company and the distribution of capital;

–Please provide a copy of L’s shareholder registers. …’

L brought an administrative appeal against the information order, even though Article 6 of the Law of 25 November 2014 did not provide for any remedy against that order. By decision of 4 June 2018, that appeal was dismissed as inadmissible. L brought an action against that decision, which is now pending before the tribunal administratif (Administrative Court, Luxembourg).

On 6 August 2018, the Luxembourg tax administration imposed a fine on L for failure to comply with the information order. On 5 September 2018, L lodged an action against that fine with the tribunal administratif (Administrative Court). L is relying in particular on the fact that the information requested by the French tax administration is not of ‘foreseeable relevance’ and the information order did not state the tax purpose for which the information was requested.

By judgment of 18 December 2018, the tribunal administratif (Administrative Court) upheld the action and annulled the decision of 6 August 2018 imposing a fine, as the information order was of itself invalid. The court held, in essence, that the information order was invalid on the basis that there was a conflict between the identity of the taxpayer as stated in that document, dated 28 February 2018, and the explanations given by the French authorities as to the purpose of the request for information, such that doubts persisted as to the identity of the taxpayer to whom the request for information related. More specifically, that court stated that the explanations in the request for information of 27 April 2017 tended to indicate that the investigation that was under way related not to F, even though F was mentioned in the request for exchange of information as the person under investigation in France, or the taxation of F, but to the natural persons who are the beneficial owners of L, who are alleged to be under an obligation, under French law, to declare their ownership of properties situated in France.

By application lodged on 21 December 2018, the Grand Duchy of Luxembourg lodged an appeal against that judgment with the Cour administrative (Higher Administrative Court, Luxembourg). Luxembourg submits in particular that the information requested by the French tax administration satisfies the condition of ‘foreseeable relevance’; that the French request contains the information required under Article 20(2) of Directive 2011/16; and, moreover, that the requirements of Article 47 of the Charter have been fulfilled, as L has taken legal action against both the information order and the decision imposing the fine.

In those circumstances, the Cour administrative (Higher Administrative Court) stayed the proceedings by order of 23 May 2019 and referred the following questions to the Court of Justice for a preliminary ruling pursuant to Article 267 TFEU:

(1) Must Article 20(2)(a) of Directive 2011/16 be interpreted as meaning that where a request for exchange of information formulated by an authority of a requesting Member State designates the taxpayers to which it relates simply by reference to their status as shareholders and beneficial owners of a company, without those taxpayers having been identified by the requesting authority in advance, individually and by name, the request satisfies the identification requirements laid down by that provision?

(2) If the answer to the first question is in the affirmative: Must Article 1(1) and Article 5 of that directive be interpreted as meaning that the standard of foreseeable relevance may be met, if the requesting Member State, in order to establish that it is not engaged in a fishing expedition, despite the fact that it has not individually identified the taxpayers concerned, provides a clear and sufficient explanation evidencing that it is conducting a targeted investigation into a limited group of persons, and not simply an investigation by way of general fiscal surveillance, and that its investigation is justified by reasonable suspicions of non-compliance with a specific legal obligation?

(3) Must Article 47 of the Charter of Fundamental Rights of the European Union be interpreted as meaning that, where

a person who has had imposed upon him [or her] by the competent authority of a Member State an administrative financial penalty for non-compliance with an administrative decision, requiring him [or her] to provide information in connection with an exchange of information between national tax authorities pursuant to Directive 2011/16, where the national law of the requested Member State does not make provision for an action to be brought against the latter decision, and where the person concerned has challenged the legality of that decision within an action brought against the financial penalty, and

has only obtained disclosure of the minimal information referred to in Article 20(2) of Directive 2011/16 in the course of the judicial procedure set in motion by the bringing of that action,

that person is entitled, in the event of a definitive incidental finding upholding the validity of the decision requiring the requested information and of the decision imposing a fine on him [or her], to a period of grace for the payment of that fine, so that he [or she] has an opportunity, having thus been given disclosure of the material supporting the contention – definitively accepted by the competent court – that the test of foreseeable relevance is met, to comply with the decision requiring the requested information?

The proceedings were initially stayed by order of 15 January 2020, pending delivery of the judgment in Joined Cases C‑245/19 and C‑246/19 on 6 October 2020. On 19 November 2020, the proceedings were resumed in dialogue with the referring court.

In addition to L, the Grand Duchy of Luxembourg, the French Republic, the Kingdom of Spain, the Hellenic Republic, the Republic of Poland, the Republic of Finland, Ireland, the Italian Republic and the Commission submitted written observations and answered questions put by the Court in the preliminary ruling proceedings.

By its first two questions referred, the referring court wishes to know, in essence, whether and subject to what requirements regarding the concept of ‘foreseeable relevance’ in Article 1(1) and Article 5 and the provision of Article 20(2) of Directive 2011/16 a request for information can concern a group of persons whose identity is ascertainable but who are not identified individually.

The present case presents two specific characteristics. First, the request by the French tax administration concerns a group of persons, rather than a single individual. Second, that group of persons is not identified by name or other criteria (such as an official photo ID card number, tax registration number or account number) and their identity is ascertainable only by common characteristics (shareholders and beneficial owners of L). It is identification by name that is the precise purpose of the request for information.

The identity of the taxpayers was known in each of the previous cases adjudicated by the Court concerning the concept of ‘foreseeable relevance’. (9) Additional information was requested to enable the requesting State to levy the correct taxes on or to verify the details provided by the taxpayer in the requesting State. In this case, per contra, there is a clear basis for taxation in the requesting State (property in France). What is unclear, however, is the identity of the persons who have to comply with the tax obligations in connection with the property. The present case differs in that respect from the previous cases adjudicated by the Court.

The first two questions referred relate exclusively to the request for information from the French authority, not to the Luxembourg tax administration’s information order. However, the answers to the questions will enable the referring court to give judgment on the legality of the administrative penalty imposed. That is because the legality of the penalty imposed by Luxembourg depends in turn on the legality of its information order. That presupposes that the request for information from the French authorities was lawful.

As the second question referred has been raised as a logical consequence of the first question referred and both essentially seek interpretation of the provisions of Directive 2011/16, they can be answered together.

Article 1(1) of Directive 2011/16 provides that the Member States are to cooperate with a view to exchanging information that is foreseeably relevant to the administration and enforcement of their domestic tax laws. According to Article 5 of the directive, that information alone is to be transmitted within the framework of the exchange of information on request.

It is therefore for the authority which is in charge of the investigation from which the exchange of information arises to assess, based on the circumstances of the case, whether the requested information is foreseeably relevant to that investigation on the basis of the progress made in the proceedings and, in accordance with Article 17(1) of Directive 2011/16, after having exhausted the usual sources of information.

Although the requesting authority has a discretion in that regard, it cannot request information that is of no relevance to the investigation concerned. Thus, the ‘foreseeable relevance’ of the requested information is a condition of a lawful request for information. (10)

Consequently, the concept of ‘foreseeable relevance’ must be interpreted in accordance with Article 5 of Directive 2011/16, read in conjunction with Article 1(1) thereof. This will depend primarily on an analysis of the wording and regulatory context (see section (a)) and the purpose (see section (b)). As the commentaries on the OECD Model Tax Convention were revised after the adoption of Directive 2011/16 and the wording of the directive was amended with effect from 22 March 2021 (see sections (c) and (d), respectively), the relevance of those amendments must also be examined in the present case.

(a) Wording and regulatory context of Article 1 of Directive 2011/16, read in conjunction with Article 5 and Article 20(2) thereof

As the Court has previously held, the expression ‘foreseeably relevant’ used in Article 1(1) of Directive 2011/16 is intended to enable the requesting authority to request and obtain any information that it may reasonably consider will prove to be relevant for the purposes of its investigation, without however authorising it manifestly to exceed the parameters of that investigation or to place an excessive burden on the requested authority. (11)

Article 5 of Directive 2011/16 refers to that information in providing that the requested authority is to communicate to the requesting authority any information referred to in Article 1(1) that it has in its possession or that it obtains as a result of administrative enquiries. Article 5 thus imposes an obligation on the requested authority.

It is apparent from the wording of those provisions that the words ‘foreseeably relevant’ describe a necessary characteristic of the requested information. The wording of Article 5 of Directive 2011/16, read in conjunction with Article 1(1) thereof, does not imply that the request for information must be limited to individual taxpayers identified by name.

The concept of ‘foreseeable relevance’ must also be interpreted in the light of recital 9 of Directive 2011/16, which states that the standard of ‘foreseeable relevance’ is intended to provide for exchange of information in tax matters to the widest possible extent and also clarifies that Member States are not at liberty to engage in ‘fishing expeditions’ or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer.

Nor does the expression ‘a given taxpayer’ imply that a request concerning a group of taxpayers is impermissible or that the taxpayers must be identified by name. Rather, what is crucial is that a given taxpayer, that is to say, a person with tax obligations in the requesting State, exists and the identity of that person is clearly ascertainable.

The expression ‘foreseeable relevance’ must also be interpreted in the light of the fact that the case-law of the Court requires the requested authority to verify whether the information sought is not devoid of any ‘foreseeable relevance’ to the investigation being carried out by the requesting authority. (12)

As the Court has previously ruled, reference must be made in that regard to Article 20(2) of the directive, which mentions matters that are relevant for the purposes of that review. (13) According to Article 20(2)(a) of Directive 2011/16, the standard form transmitted by the requesting authority is to include at least the ‘identity of the person’ under examination or investigation. The German version refers to ‘die Bezeichnung der Person’ and the French version refers to ‘l’identité de la personne’.

The terms ‘Bezeichnung’ or ‘identity/identité’ also refer, but not exclusively, to identification by name. It is not possible to infer from the wording of Article 20(2)(a) of Directive 2011/16 that a request for information must concern a single taxpayer. Nor is it possible to infer from the wording that the taxpayer must be identified by name.

Rather, the term ‘designation’ or ‘identity’ is to be interpreted as meaning that it encompasses all the characteristics or attributes that distinguish one person from another. However, a person can also be identified by characteristics other than their name, provided that they likewise preclude any confusion.

Thus, it suffices if the requesting State provides all the information, in terms of facts and characteristics, to enable the requested State to identify the taxpayers.

49.It is therefore apparent from the wording and regulatory context of Article 1(1) of Directive 2011/16, read in conjunction with Article 5 and Article 20(2)(a) thereof, that a request for information may also concern a group of taxpayers and that the taxpayer(s) must be identifiable from the information provided by the requesting authority, but not necessarily identified by name.

It is therefore apparent from the wording and regulatory context of Article 1(1) of Directive 2011/16, read in conjunction with Article 5 and Article 20(2)(a) thereof, that a request for information may also concern a group of taxpayers and that the taxpayer(s) must be identifiable from the information provided by the requesting authority, but not necessarily identified by name.

Spirit and purpose of the term ‘foreseeable relevance’

(b) Spirit and purpose of the term ‘foreseeable relevance’

50.This is corroborated by the spirit and purpose of the term ‘foreseeable relevance’. The Court has previously ruled with regard to the substantive relevance of the information that the requesting authority must be able, in the context of its investigation, to determine the information it considers that it would need, having regard to national law, in order properly to assess the taxes due. (14)

This is corroborated by the spirit and purpose of the term ‘foreseeable relevance’. The Court has previously ruled with regard to the substantive relevance of the information that the requesting authority must be able, in the context of its investigation, to determine the information it considers that it would need, having regard to national law, in order properly to assess the taxes due. (14)

(1) Distinction between a permissible group request and an impermissible fishing expedition

Distinction between a permissible group request and an impermissible fishing expedition

51.It follows from this that the purpose of a request for information under Article 1(1) of Directive 2011/16, read in conjunction with Article 5 thereof, need not necessarily be to obtain documents (e.g. contracts, invoices and payments). Moreover, the Court has previously found that information is not manifestly devoid of any ‘foreseeable relevance’ even where it relates to contracts, invoices and payments which, although not specifically identified, are defined by criteria. (15) That benchmark can also be applied to requests relating to persons.

It follows from this that the purpose of a request for information under Article 1(1) of Directive 2011/16, read in conjunction with Article 5 thereof, need not necessarily be to obtain documents (e.g. contracts, invoices and payments). Moreover, the Court has previously found that information is not manifestly devoid of any ‘foreseeable relevance’ even where it relates to contracts, invoices and payments which, although not specifically identified, are defined by criteria. (15) That benchmark can also be applied to requests relating to persons.

Consequently, the requesting State need not identify the persons concerned by name. A request is generally issued during the stage of the investigation the precise purpose of which is to gather information of which the requesting authority does not, by definition, have full and precise knowledge. Identification of the persons concerned is the precise purpose of the request for information. The effectiveness of the exchange of information (especially in the fight against tax fraud and tax evasion) would therefore be seriously limited if the request had to relate to persons already known by name. Although Switzerland was renowned in the past for its rather restrictive exchange of information, the Schweizerisches Bundesgericht (Swiss Federal Tribunal) itself takes the view that such group requests may therefore be permissible. (16)

52.Consequently, the requesting State need not identify the persons concerned by name. A request is generally issued during the stage of the investigation the precise purpose of which is to gather information of which the requesting authority does not, by definition, have full and precise knowledge. Identification of the persons concerned is the precise purpose of the request for information. The effectiveness of the exchange of information (especially in the fight against tax fraud and tax evasion) would therefore be seriously limited if the request had to relate to persons already known by name. Although Switzerland was renowned in the past for its rather restrictive exchange of information, the Schweizerisches Bundesgericht (Swiss Federal Tribunal) itself takes the view that such group requests may therefore be permissible. (16)

53.In contrast to that, it follows from the concept of ‘foreseeable relevance’ that the Member States may not engage in simple fishing expeditions. (17) Thus, there must be a certain connection to a specific case. The request may not be speculative.

In contrast to that, it follows from the concept of ‘foreseeable relevance’ that the Member States may not engage in simple fishing expeditions. (17) Thus, there must be a certain connection to a specific case. The request may not be speculative.

54.However, where the request for information relates to a group of unidentified taxpayers, there is a particularly high risk of fishing expeditions, namely because if they have not already been identified, the requesting State will generally be unable to refer to a specific taxation procedure against those persons.

However, where the request for information relates to a group of unidentified taxpayers, there is a particularly high risk of fishing expeditions, namely because if they have not already been identified, the requesting State will generally be unable to refer to a specific taxation procedure against those persons.

55.In order for the requested information to satisfy the condition of ‘foreseeable relevance’, or, in other words, for a group request to be permissible, the requesting State is required to state its reasons and specific facts. This is also necessary because, as the Court has previously ruled, (18) the requested authority must verify whether the information requested is not devoid of any ‘foreseeable relevance’ to the investigation being carried out by the requesting authority. The requirements for the duty to state reasons become more stringent as the scope and sensitivity of the requested information increase. (19)

In order for the requested information to satisfy the condition of ‘foreseeable relevance’, or, in other words, for a group request to be permissible, the requesting State is required to state its reasons and specific facts. This is also necessary because, as the Court has previously ruled, (18) the requested authority must verify whether the information requested is not devoid of any ‘foreseeable relevance’ to the investigation being carried out by the requesting authority. The requirements for the duty to state reasons become more stringent as the scope and sensitivity of the requested information increase. (19)

56.As I have previously explained elsewhere, (20) various factors have to be taken into account in order to establish a distinction between an impermissible fishing expedition and a permissible request for information. First of all, the subject matter of the requesting authority’s investigation and the allegation that it has made under tax law must be considered. A further significant factor is the previous conduct of the taxpayer. An exchange of information is justified by concrete evidence of a violation of tax obligations rather than by mere speculation.

As I have previously explained elsewhere, (20) various factors have to be taken into account in order to establish a distinction between an impermissible fishing expedition and a permissible request for information. First of all, the subject matter of the requesting authority’s investigation and the allegation that it has made under tax law must be considered. A further significant factor is the previous conduct of the taxpayer. An exchange of information is justified by concrete evidence of a violation of tax obligations rather than by mere speculation.

Requirement concerning the precision of the request for information

(2) Requirement concerning the precision of the request for information

Consequently, the question that arises here is how precise a request relating to a group of taxpayers not identified individually must be in order for the requested authority to comply with that obligation. This question has to be answered primarily through interpretation of Article 20(2) of Directive 2011/16, which lays down the minimum information that a request for information from the requesting State must contain.

57.Consequently, the question that arises here is how precise a request relating to a group of taxpayers not identified individually must be in order for the requested authority to comply with that obligation. This question has to be answered primarily through interpretation of Article 20(2) of Directive 2011/16, which lays down the minimum information that a request for information from the requesting State must contain.

According to Article 20(2)(a) of Directive 2011/16, the person under examination or investigation must be identified. As stated above, it is not necessary for the taxpayer(s) to be identified by name in order to be able to verify that the information requested is not devoid of any ‘foreseeable relevance’. Rather, what is crucial is that the description of the group of taxpayers is specific and detailed enough to enable the requested State to identify them unequivocally.

58.According to Article 20(2)(a) of Directive 2011/16, the person under examination or investigation must be identified. As stated above, it is not necessary for the taxpayer(s) to be identified by name in order to be able to verify that the information requested is not devoid of any ‘foreseeable relevance’. Rather, what is crucial is that the description of the group of taxpayers is specific and detailed enough to enable the requested State to identify them unequivocally.

59.Furthermore, Article 20(2)(b) of Directive 2011/16 requires the requesting State to include information on the tax purpose for which the information is sought. In other words, the tax obligations to which the group of taxpayers is subject in the requesting State and the facts on which the request is based must be apparent to the requested State.

Furthermore, Article 20(2)(b) of Directive 2011/16 requires the requesting State to include information on the tax purpose for which the information is sought. In other words, the tax obligations to which the group of taxpayers is subject in the requesting State and the facts on which the request is based must be apparent to the requested State.

It therefore follows that, in the case of a group request relating to as-yet-unidentified persons, the requesting Member State must show why there is reasonable suspicion that those persons have failed to comply with certain statutory obligations. Although, in principle, information is ‘foreseeably relevant’ irrespective of whether the person concerned has acted in compliance with the law, the purpose of exchanging information is often only to confirm that conduct has been compliant with the law.

60.It therefore follows that, in the case of a group request relating to as-yet-unidentified persons, the requesting Member State must show why there is reasonable suspicion that those persons have failed to comply with certain statutory obligations. Although, in principle, information is ‘foreseeably relevant’ irrespective of whether the person concerned has acted in compliance with the law, the purpose of exchanging information is often only to confirm that conduct has been compliant with the law.

61.However, a request concerning an unidentified group of taxpayers presents certain specific characteristics. First, the requesting State may be unable to identify the persons because they are not registered in the requesting State for the tax purposes in question. Second, as the information requested must be ‘foreseeably relevant’ for the purposes of taxation in the requesting State, the group must be subject to specific tax obligations in the requesting State. Both aspects together imply that the persons in the group have not acted in compliance with the law.

However, a request concerning an unidentified group of taxpayers presents certain specific characteristics. First, the requesting State may be unable to identify the persons because they are not registered in the requesting State for the tax purposes in question. Second, as the information requested must be ‘foreseeably relevant’ for the purposes of taxation in the requesting State, the group must be subject to specific tax obligations in the requesting State. Both aspects together imply that the persons in the group have not acted in compliance with the law.

62.As a result, requests relating to a group of taxpayers whose identity is ascertainable but who have not already been identified are permissible. However, the requesting State must (i) provide as specific and detailed a description of the group as possible; (ii) explain the tax obligations to which the group of taxpayers is subject in the requesting State and the facts on which the request is based; (iii) show why there is reason to believe that the group has not acted in compliance with the law.

As a result, requests relating to a group of taxpayers whose identity is ascertainable but who have not already been identified are permissible. However, the requesting State must (i) provide as specific and detailed a description of the group as possible; (ii) explain the tax obligations to which the group of taxpayers is subject in the requesting State and the facts on which the request is based; (iii) show why there is reason to believe that the group has not acted in compliance with the law.

The necessary distinction between a permissible group request and an impermissible fishing expedition must be made in the context of an overall assessment, taking into account all the circumstances of the individual case, and is therefore a matter for the referring court.

63.The necessary distinction between a permissible group request and an impermissible fishing expedition must be made in the context of an overall assessment, taking into account all the circumstances of the individual case, and is therefore a matter for the referring court.

Based on the facts put before the Court, the request for information from the French tax administration relates explicitly to the shareholders and beneficial owners of L, who can, in principle, be identified from that status. Moreover, it has to be borne in mind that the French authority has apparently explained in the request that L is the indirect parent company of F, which is alleged to own a property in France. In addition, L is alleged to own directly another property in France. Moreover, according to the information provided by the French authorities, natural persons who directly or indirectly own properties located in France must register them and this has apparently not yet been done. Thus, it appears, subject to an overall assessment to be carried out by the referring court, that the request for information satisfies the abovementioned requirements (see point 62).

64.Based on the facts put before the Court, the request for information from the French tax administration relates explicitly to the shareholders and beneficial owners of L, who can, in principle, be identified from that status. Moreover, it has to be borne in mind that the French authority has apparently explained in the request that L is the indirect parent company of F, which is alleged to own a property in France. In addition, L is alleged to own directly another property in France. Moreover, according to the information provided by the French authorities, natural persons who directly or indirectly own properties located in France must register them and this has apparently not yet been done. Thus, it appears, subject to an overall assessment to be carried out by the referring court, that the request for information satisfies the abovementioned requirements (see point 62).

65.Nor, for the rest, should there be any concerns as to the need for the request for information within the meaning of Article 17 of Directive 2011/16. In particular, as France has stated, the transparency register which Luxembourg was required to establish pursuant to Directives 2015/849 (21) and 2018/843 (22) had still not been established when the request for information was made and, therefore, the French tax authority was unable to identify the beneficial owners itself. The Court does not know whether an equally effective alternative method of collecting taxes on the property concerned might possibly have been available under French tax law, thereby perhaps obviating the need for the request for information.

Nor, for the rest, should there be any concerns as to the need for the request for information within the meaning of Article 17 of Directive 2011/16. In particular, as France has stated, the transparency register which Luxembourg was required to establish pursuant to Directives 2015/849 (21) and 2018/843 (22) had still not been established when the request for information was made and, therefore, the French tax authority was unable to identify the beneficial owners itself. The Court does not know whether an equally effective alternative method of collecting taxes on the property concerned might possibly have been available under French tax law, thereby perhaps obviating the need for the request for information.

Relevance of the commentaries on the OECD Model Tax Convention

(c) Relevance of the commentaries on the OECD Model Tax Convention

This interpretation, namely that a group request is foreseeably relevant only subject to the requirements set out in point 62, is confirmed by the revised commentary on Article 26 of the OECD Model Tax Convention.

66.This interpretation, namely that a group request is foreseeably relevant only subject to the requirements set out in point 62, is confirmed by the revised commentary on Article 26 of the OECD Model Tax Convention.

OECD Model Tax Conventions are not legally binding, multilateral conventions under international law; they are simply the unilateral acts of an international organisation in the form of recommendations to its member countries. (23) A fortiori, therefore, the commentaries on the OECD Model Tax Convention are not legally binding on the Court. Still, the authors of those commentaries reach the correct conclusion.

67.OECD Model Tax Conventions are not legally binding, multilateral conventions under international law; they are simply the unilateral acts of an international organisation in the form of recommendations to its member countries. (23) A fortiori, therefore, the commentaries on the OECD Model Tax Convention are not legally binding on the Court. Still, the authors of those commentaries reach the correct conclusion.

68.As rightly stated in paragraph 5.1 of the commentary on Article 26 of the OECD Model Tax Convention, a request for information does not constitute an impermissible fishing expedition solely because it does not provide the name or address of the taxpayer under investigation. In that case, the requesting State must simply provide additional information sufficient to enable the requested State to identify the taxpayer.

As rightly stated in paragraph 5.1 of the commentary on Article 26 of the OECD Model Tax Convention, a request for information does not constitute an impermissible fishing expedition solely because it does not provide the name or address of the taxpayer under investigation. In that case, the requesting State must simply provide additional information sufficient to enable the requested State to identify the taxpayer.

69.Furthermore, paragraph 5.2 of that commentary correctly states that the standard of ‘foreseeable relevance’ can be met both in cases dealing with one taxpayer and in cases of group requests. However, where the request relates to a group of taxpayers who cannot be identified individually, the requesting State must provide as specific and detailed a description of the group as possible and an explanation of the applicable law and the facts and circumstances that have led to the request for information.

Furthermore, paragraph 5.2 of that commentary correctly states that the standard of ‘foreseeable relevance’ can be met both in cases dealing with one taxpayer and in cases of group requests. However, where the request relates to a group of taxpayers who cannot be identified individually, the requesting State must provide as specific and detailed a description of the group as possible and an explanation of the applicable law and the facts and circumstances that have led to the request for information.

70.Finally, according to paragraph 5.2 of that commentary, the requesting State must explain why there is reason to believe that the group has been non-compliant with that law and show that the requested information would assist in determining compliance within the group. This is similar to the requirements addressed above (see point 62), which applied already before the commentaries on the OECD Model Tax Convention were revised in 2014. The fundamental concerns raised by the referring court as regards the subsequent extension of the statutory criterion of foreseeable relevance in the revised commentaries on the OECD Model Tax Convention are therefore inapplicable.

Finally, according to paragraph 5.2 of that commentary, the requesting State must explain why there is reason to believe that the group has been non-compliant with that law and show that the requested information would assist in determining compliance within the group. This is similar to the requirements addressed above (see point 62), which applied already before the commentaries on the OECD Model Tax Convention were revised in 2014. The fundamental concerns raised by the referring court as regards the subsequent extension of the statutory criterion of foreseeable relevance in the revised commentaries on the OECD Model Tax Convention are therefore inapplicable.

(d) Amendment to Directive 2011/16 as of 22 March 2021

Amendment to Directive 2011/16 as of 22 March 2021

71.Nor does the subsequent insertion of Article 5a(3) of Directive 2011/16 change this interpretation. Council Directive (EU) 2021/514 of 22 March 2021 (24) introduced a new special legal basis for group requests in Article 5a(3) of Directive 2011/16. The Member States are required to transpose the amended directive into their national law by 31 December 2022. Thus, Article 5a(3) of Directive 2011/16, as inserted by Directive 2021/514, has no direct impact on the ruling in the present case.

Nor does the subsequent insertion of Article 5a(3) of Directive 2011/16 change this interpretation. Council Directive (EU) 2021/514 of 22 March 2021 (24) introduced a new special legal basis for group requests in Article 5a(3) of Directive 2011/16. The Member States are required to transpose the amended directive into their national law by 31 December 2022. Thus, Article 5a(3) of Directive 2011/16, as inserted by Directive 2021/514, has no direct impact on the ruling in the present case.

However, it follows from recital 4 of Directive 2021/514 that the new provision is intended to provide the tax administrations with a clear legal framework for the continuing use of group requests. It follows from this wording alone that this is a declaratory amendment to the directive and that group requests were therefore also permissible previously. The amendment was made for reasons of legal certainty and legal clarity, both for persons required to pay taxes and provide information and for the tax administrations.

72.However, it follows from recital 4 of Directive 2021/514 that the new provision is intended to provide the tax administrations with a clear legal framework for the continuing use of group requests. It follows from this wording alone that this is a declaratory amendment to the directive and that group requests were therefore also permissible previously. The amendment was made for reasons of legal certainty and legal clarity, both for persons required to pay taxes and provide information and for the tax administrations.

Thus, the insertion of a special provision for group requests in Article 5a(3) of Directive 2011/16, as amended by Directive 2021/514, also does not preclude the autonomous interpretation in EU law of the concept of ‘foreseeable relevance’ carried out above (see point 62).

73.Thus, the insertion of a special provision for group requests in Article 5a(3) of Directive 2011/16, as amended by Directive 2021/514, also does not preclude the autonomous interpretation in EU law of the concept of ‘foreseeable relevance’ carried out above (see point 62).

Conclusion

74.To conclude, Article 1(1) and Article 5 of Directive 2011/16, read in conjunction with Article 20(2) thereof, must be interpreted as meaning that a request for information may relate to a group of unidentified persons whose identity is, however, ascertainable from their status as shareholders and beneficial owners of a legal person.

To conclude, Article 1(1) and Article 5 of Directive 2011/16, read in conjunction with Article 20(2) thereof, must be interpreted as meaning that a request for information may relate to a group of unidentified persons whose identity is, however, ascertainable from their status as shareholders and beneficial owners of a legal person.

75.However, in order to satisfy the criterion of ‘foreseeable relevance’, the requesting State must, in the request for information, (i) provide as specific and detailed a description of the group as possible; (ii) explain the tax obligations to which the group of taxpayers is subject in the requesting State and the facts on which the request is based; (iii) show why there is reason to believe that the group has not acted in compliance with the law.

However, in order to satisfy the criterion of ‘foreseeable relevance’, the requesting State must, in the request for information, (i) provide as specific and detailed a description of the group as possible; (ii) explain the tax obligations to which the group of taxpayers is subject in the requesting State and the facts on which the request is based; (iii) show why there is reason to believe that the group has not acted in compliance with the law.

The third question referred

76.By its third question referred, the referring court wishes to know, in essence, whether the addressee of the information order (25) must be allowed a time limit for the payment of a fine imposed on the grounds of failure to comply with that order, following the conclusion of the proceedings initiated against the fine. This question arises for the referring court because the addressee had no direct legal remedy against the information order and obtained disclosure of the minimum information referred to in Article 20(2) of Directive 2011/16 only during the course of the judicial proceedings (see, in that regard, point 57 et seq., and especially point 62).

By its third question referred, the referring court wishes to know, in essence, whether the addressee of the information order (25) must be allowed a time limit for the payment of a fine imposed on the grounds of failure to comply with that order, following the conclusion of the proceedings initiated against the fine. This question arises for the referring court because the addressee had no direct legal remedy against the information order and obtained disclosure of the minimum information referred to in Article 20(2) of Directive 2011/16 only during the course of the judicial proceedings (see, in that regard, point 57 et seq., and especially point 62).