EN

Official Journal of the European Union

C 432/30

(Case C-788/19)

(2019/C 432/35)

Language of the case: Spanish

Parties

Applicant: European Commission (represented by: N. Gossement and C. Perrin, acting as Agents)

Defendant: Kingdom of Spain

Form of order sought

The applicant claims that the Court should:

—declare that

—by establishing consequences of the failure to fulfil the obligation to provide information in respect of overseas assets and rights or the late submission of ‘Modelo 720’ (‘Form 720’), which include the classification of those assets as unjustified capital gains which are not subject to the statute of limitation;

—by automatically imposing a fixed penalty payment of 150 % applicable in the event of the failure to fulfil the obligation to provide information in respect of overseas assets and rights or the late submission of ‘Modelo 720’; and

—by applying fixed penalty payments in respect of the failure to fulfil the obligation to provide information in respect of overseas assets and rights or the late submission of ‘Modelo 720’, the level of which is higher than that of the penalties laid down by the general rules on similar infringements;

—the Kingdom of Spain has failed to fulfil its obligations under Articles 21, 45, 56 and 63 TFEU, and Articles 28, 31, 36 and 40 of the EEA Agreement;

—order the Kingdom of Spain to pay the costs.

Pleas in law and main arguments

Spanish tax legislation imposes an obligation on tax residents in Spain to declare certain overseas assets and rights by means of a tax declaration form (‘Modelo 720’). Specific penalty provisions are to be applied if that obligation is not fulfilled or is fulfilled improperly.

The Commission concludes that penalties involving the classification of such assets as capital gains, the non-application of the normal rules on limitation periods and fixed penalty payments constitute a restriction of the fundamental freedoms under the TFEU and the EEA. Although in principle those measures may be appropriate for the purposes of achieving the aims pursued — which are to prevent and counter tax avoidance and tax evasion — they are disproportionate.