OPINION OF ADVOCATE GENERAL

delivered on 13 June 1996 (*1)

Introduction

1.As part of the common organization of the market in sugar, a number of levies were introduced which were payable by sugar producers. In Case C-19/94 SAFBA, (*1) the Court has already had occasion to rule as to when the liability to pay the so-called storage levy arises. The question on which the Court has been asked to rule in this case is when the liability to pay certain other levies arises and when certain of those levies fall due for payment.

2.The case concerns three different levies forming part of the common organization of the market in sugar: a production levy, an elimination levy and a special elimination levy.

3.The production levy was introduced to cover losses under the common organization of the market. The relevant rules are set out in Council Regulation (EEC) No 1785/81 of 30 June 1981 on the common organization of the markets in the sugar sector, (*2) as subsequently amended (‘the basic regulation’), Article 28(3) and (4) of which reads as follows:

‘3. When the recorded figures... result... in an estimated overall loss, that loss shall be divided by the estimated production of... sugar... attributable to the current marketing year. An amount equal to this quotient shall be charged on manufacturers as a basic production levy on their production of sugar...’

‘4. When the maximum permitted basic production levy does not fully cover the overall loss..., the uncovered balance shall be divided by the estimated production of... sugar... attributable to the marketing year in question. An amount equal to this quotient shall be charged on manufacturers as a levy on their production of... sugar...’

4.The elimination levy was introduced to cover further losses found under the common organization of the market in the period 1981/82 to 1985/86. The relevant provisions were inserted as Article 32a of the basic regulation by Council Regulation (EEC) No 934/86 of 24 March 1986 (the ‘elimination levy regulation’). (*3) Article 32a(1) provides:

‘an elimination levy, designed to eliminate the 400 million ECU deficit recorded following application of the quota arrangements in the period 1981/82 to 1985/86, shall be charged to manufacturers of sugar... during the 1986/87 [to] 1990/91 marketing years’.

In pursuance of Article 32a(6) of the basic regulation, Commission Regulation (EEC) No 3046/86 of 3 October 1986 (*4) (‘the implementing regulation’) laid down detailed rules concerning the collection of the elimination levy. Article 1(1) provides:

‘Member States shall collect the elimination levy, the amounts of which are fixed in Article 32a(2) and (3) of [the basic regulation], from manufacturers of sugar... in two instalments. Collection shall take place for each marketing year concerned before 15 December of the year in question for the first instalment which represents an advance payment, and before 15 December following the said year for the second instalment which represents the balance to be paid.’

5.The special elimination levy was introduced with a view to covering an estimated loss for the 1986/87 marketing year which would not be covered by producers' contributions toward the sugar market organization. The relevant provisions are in Council Regulation (EEC) No 1914/87 of 2 July 1987 (*5) (‘the special elimination regulation’), Article 1(2) of which provides:

‘2. The special elimination levy shall be calculated for each sugar producing undertaking... by multiplying the amount owed by the undertaking as a production levy for the 1986/87 marketing year by a coefficient to be determined....

The special elimination levy shall be paid before 15 December 1987’.

Commission Regulation (EEC) No 3061/87 of 13 October 1987 (*6) (‘the coefficient regulation’) laid down, pursuant to Article 1(4) of the special elimination regulation, rules on the coefficient for calculating the special elimination levy on sugar for the 1986/87 marketing year. Article 2 provides:

‘1. Member States shall collect the special elimination levy at the same time as the balance of the production levies provided for in Article 28 of [the basic regulation].

The facts of the case

6.Société Sucrière Agricole de Maizy (‘Maizy’) is engaged in the production of sugar and the distillation and sale of sugar processing residues. When its accounts were examined for corporation tax purposes, its taxable income was reassessed. Some of the changes related to the elimination levy for the 1985/86 and 1986/87 financial years and stock valuations.

7.Under the French tax system, the Community elimination levies are a charge which companies show in their profit and loss accounts. The levies are therefore taken into account when calculating taxable profit, which under the Code Général des Impôts (General Tax Code) is determined as follows:

‘The net profit is the difference between the value of the net assets at the close and at the opening of the period for which the surplus constitutes the taxable income, with the deduction of additional contributions and the addition of amounts withdrawn by the owners or members in that period. Net assets are the amount by which the assets exceed that portion of total liabilities comprising third party liabilities, verifiable depreciation and provisions.’

8.When closing its accounts for the 1985/86 financial year (on 30 June 1986), Maizy set aside the sum of FF 4 Oil 830, equivalent to the estimated elimination levy the company would have to pay, and the sum of FF 3149290 to cover the special elimination levy. As the elimination levy had to be divided as to one-fifth for each of the production years 1986/87 to 1990/91, the provision was reduced on 30 June 1987 by the amount actually paid for the 1986/87 production year, FF 802366. The current value of the provision was determined accordingly and a further FF 170064 set aside.

9.The tax authorities made a number of adjustments as follows: as regards the elimination levy, the liability which was deducted from the accounts for 1985/86 (FF 4011830) and further provisions made after calculating the current value in 1986/87 (FF 170064) were included when calculating the company's taxable earnings. That portion of the provision which had been booked in respect of the levy for the 1986/87 financial year (FF 802366) was accepted as a charge on the profits, as it had been reincluded by the company. As far as the special elimination levy was concerned, the tax authorities ruled that no provision could be made for this in the accounts for the 1985/86 financial year, since that levy was to be regarded as covering the aggregate loss for the 1986/87 production year. The authorities therefore adjusted the books, which led to an alteration in the company's tax assessment, as the rate of corporation tax had changed between 1986 and 1987.

Lastly, Maizy had not allowed for the elimination and production levies in its inventory, as it was assumed that those levies related to the marketing of sugar. The tax authorities disagreed, resulting in an adjustment to the accounts of FF 8 292 457.

10.Maizy then appealed to the Directeur Regional des Impôts claiming that it was not liable to pay the additional corporation tax demanded from it in that regard, alleging that the altered assessments were based on a misinterpretation of Community rules forming the basis for the liability to storage levy, production levy and elimination levy.

The questions referred for a preliminary ruling

11.By application lodged on 14 November 1990, Maizy brought an action against the Directeur Régional des Impôts before the Tribunal Administratif d'Amiens. According to the information given, the Société Sucrière de Berneuil-sur-Aisne has taken over the proceedings.

In its judgment of 22 May 1995, the Tribunal Administratif stayed the proceedings and referred the case to the Court of Justice for interpretation of the relevant Community-law rules. The judgment of the national court did not formulate the questions on which it sought a preliminary ruling. Article 1 of the judgment reads as follows:

‘Proceedings on the application by Société Sucrière de Maizy are stayed pending a ruling from the Court of Justice of the European Communities on the questions outlined in the grounds of the present judgment.’

The relevant grounds appear to be as follows:

‘The decision to be given is dependent on the interpretation of the abovementioned Community provisions regarding the chargeable event for the storage levy.’

‘The decision to be given depends on the interpretation of the abovementioned Community provisions regarding the period in respect of which the elimination levies are payable.’ (It follows from the other grounds that the point concerns the elimination levy and the special elimination levy.)

‘The decision to be given depends on the interpretation of the abovementioned Community provisions regarding the chargeable event in respect of the levies at issue.’ (It follows from the previous ground that the point concerns the production levies and the two elimination levies.)

The first ground concerns the question when the obligation to pay the storage levy arises. As stated above, the Court has already ruled on this question in the SAFBA case, in which it interpreted Article 8(2) of the basic regulation and held that the prescribed conditions for materialization of the obligation to pay the storage levy are satisfied when the sugar is disposed of. In view of this, the Registrar of the Court of Justice sent its judgment in SAFBA to the Tribunal Administratif d'Amiens and asked whether, in the light of that judgment, the national court wished to maintain its question. By letter of 30 August 1995, the registrar of the Tribunal Administratif d'Amiens replied that Case C-19/94 dealt only with the question of the storage levy, so that it was still necessary for the Court to answer the other questions.

I therefore find that there are no grounds for answering the question on the liability to the storage levy.

It might be considered whether the other questions are formulated in such imprecise terms as to make an examination of the merits impossible. There are not in my view sufficient grounds for dismissing the case, however, since in the light of the order for reference as a whole it is sufficiently clear what questions the national court would like the Court to rule on, such that by reformulating the questions it is possible usefully to give an answer to the national court.

What the national court is really asking the Court to rule on are two questions, as follows:

When does the obligation to pay the production levy, elimination levy and special elimination levy materialize?

When do the elimination levy and special elimination levy fall due for payment?

The first question

Let me say at the outset that, as the Court ruled in the SAFBA case, the term ‘le fait générateur’(the chargeable event) for the storage levy to which the national court refers is not a term used in the Community rules concerned, but rather a term used in French tax law. It is not for the Court to give a ruling on the meaning of a term of national law. However, within the framework of its cooperation with national courts, the Court must interpret the relevant provisions of Community law in order to specify the time at which the conditions prescribed in those provisions for materialization of the obligation to pay the levy are satisfied. It is then for the national court to apply its national tax law on the basis of the Court's interpretation.

In the SAFBA case, (7) the Court also held, as regards the conditions required for the liability to pay a levy to arise, that:

‘Determination of the amount of the levy is also essential in order to circumscribe the exact scope of the obligation which cannot otherwise be regarded as having materialized.’

I will examine the relevant rules on each of the three levies below in order to determine when the conditions required for the levies to apply are satisfied under those rules.

The production levy

The French Government, the Greek Government and the Commission have stated that Article 28(3) and (4) of the basic regulation is to be interpreted as meaning that the liability to pay the levies imposed therein arises at the time the sugar is produced and not, as with the storage levy under Article 8(2) of the basic regulation, when the sugar is disposed of.

I would like to emphasize that under the terms of Article 28(3) of the basic regulation a production levy will be charged to producers on their production of sugar if an estimated overall loss results in a given marketing year. The levy is calculated by dividing that loss by the quantity of sugar which, under an estimate made before the end of each marketing year, is expected to be ‘attributable to the current marketing year’. Article 28(1), which lays down rules on the various findings required to estimate a potential loss, also refers to production in ‘the current production year’.

Article 28(4) of the basic regulation imposes an additional production levy on the production of sugar if the maximum permitted basic production levy is inadequate to cover the estimated overall loss. That additional levy is calculated by dividing the uncovered balance by the estimated production ‘attributable to the marketing year in question’.

In my opinion, therefore, it is the production of sugar as such which gives rise to the obligation to pay the production levies under Article 28(3) and (4) of the basic regulation. The obligation to pay the levies does not appear to be linked to any other conditions, and it is possible to calculate the amount of the levy at the end of each marketing year from the total estimated sugar production.

The elimination levy

The French Government, the Greek Government and the Commission are all of the opinion that the obligation to pay the elimination levy arises on the production of sugar in the marketing years 1986/87 to 1990/91.

The elimination levy was undoubtedly intended to absorb the shortfall which arose in the marketing years 1981/82 to 1985/86. But it is clear from the seventh and eighth recitals in the preamble to the elimination levy regulation, on the other hand, that this shortfall was to be spread over the next five marketing years, namely 1986/87 to 1990/91. The preamble refers to the principle of solidarity and fairness and the material impossibility of passing on the burden of the levy to individual producers on the basis of the advantages reaped in the past.

Under the terms of Article 32a of the basic regulation, the elimination levy was to be imposed on sugar producers ‘during the 1986/87 [to] 1990/91 marketing years... in respect of their production of... sugar’. It is apparent from a literal reading of the provisions on the introduction of an elimination levy that the obligation to pay that levy arose when sugar was produced in the marketing years 1986/87 to 1990/91.

Under Article 32a(l) and (2) of the basic regulation, the total production of the different regions of the Community provides the basis for the method of calculating the elimination duty laid down in those rules. If the revenue from the elimination levy is not in line with the estimates, Article 32a(4) allows for the levy to be adjusted. Article 1 of the implementing regulation specifies how the elimination levy is to be paid. It is to be paid in two instalments, the first being calculated by multiplying the total sugar quota of the undertaking concerned ‘during the marketing year in question’ by 80% of the amount of the elimination levy for the region concerned.

It is therefore the production of sugar in the years 1986/87 to 1990/91 which is decisive in calculating the elimination levy, while the individual sugar producers' output of sugar in the shortfall years 1981/82 to 1985/86 plays no part in that calculation. Using the method of calculation described above, the final amount of the elimination levy for the individual sugar producers could be determined at the end of each of the marketing years 1986/87 to 1990/91.

28.The prescribed conditions for materialization of the obligation to pay the elimination duty were therefore satisfied, in my view, when estimates of sugar production were drawn up at the end of each of the marketing years 1986/87 to 1990/91.

29.The French Government, the Greek Government and the Commission have all stated that the obligation to pay the special elimination levy arose when sugar was produced in the course of the 1986/87 marketing year.

30.The special elimination levy is intended to cover a forecast shortfall in the 1986/87 marketing year. Under Article 1(2) of the special elimination levy regulation, sugar producers are required to pay an additional percentage of the production levy for the year concerned. Article 2 of the coefficient regulation requires Member States to collect the levy at the same time as the balance of the production levies.

Since it was therefore an additional levy to the general production levy, it may be assumed to share the characteristics of that levy. As stated in point 22, the conditions required for the obligation to pay the production levy to arise were satisfied at the end of each marketing year when sugar production was estimated, so that the obligation to pay the special elimination levy to cover the shortfall in the 1986/87 marketing year must also be assumed to have arisen at the end of that marketing year.

31.On this basis, I consider that the prescribed conditions for the materialization of the obligation to pay the special elimination levy were satisfied when the estimated sugar production was determined at the end of the 1986/87 marketing year.

The answer to the first question must therefore be that the conditions for materialization of the obligation to pay the production levy were satisfied when the estimated sugar production was determined at the end of each marketing year. The conditions for the materialization of the obligation to pay the elimination levy were satisfied when the estimated sugar production was determined at the end of each of the marketing years 1986/87 to 1990/91. The conditions for the materialization of the obligation to pay the special elimination levy were satisfied when the estimated sugar production was determined at the end of the 1986/87 marketing year.

The second question

The elimination levy

33.The Commission has stated that the first instalment is due not later than 15 December of the marketing year in question, while the second instalment is due not later than 15 December of the year following the marketing year in question.

34.As stated above, it follows from Article 1(1) of the implementing regulation that the elimination levy is payable in two instalments. To this end, the Member States draw up a statement for each undertaking under Article 1(4) of the sum outstanding against it. For the first instalment, that statement is drawn up before 1 November of the marketing year in question, and for the second instalment, before 1 November of the year following the marketing year in question.

On the basis of those statements, under Article 1(1) of the implementing regulation, Member States collect the first instalment before 15 December of the marketing year concerned and the second instalment before 15 December of the year following that marketing year.

35.In my opinion, the first instalment of the elimination levy therefore fell due for payment on 15 December of each of the marketing years 1986/87 to 1990/91, and the second instalment of the elimination levy fell due for payment on 15 December of the year following the marketing year in question.

The special elimination levy

36.The Commission has stated that the special elimination levy was due by 15 December 1987 at the latest.

37.Under Article 2(2) of the coefficient regulation, the Member States were to draw up a statement for each undertaking for the 1986/87 marketing year. On the basis of that statement, under Article 2(1), the Member States were to collect the special elimination levy at the same time as the balance of the production levies. Under Article 7(2) of Commission Regulation (EEC) No 1443/82, as amended by Commission Regulation (EEC) No 2682/84 of 21 September 1984, the balance of the production levy and that of the additional production levy were to be paid before the following 15 December.

38.In my opinion, the special elimination levy therefore fell due for payment on 15 December 1987.

39.It follows that the answer to the second question must be that the first instalment of the elimination levy fell due for payment on 15 December in each of the marketing years 1986/87 to 1990/91 and the second instalment of the elimination levy fell due for payment on 15 December of the year following the marketing year in question. The special elimination levy fell due for payment on 15 December 1987.

Conclusion

I therefore propose that the Court answer the questions as follows:

1.The conditions for the materialization of the obligation to pay the production levies under Article 28(3) and (4) of Council Regulation (EEC) No 1785/81 of 30 June 1981 on the common organization of the markets in the sugar sector, as subsequently amended, are satisfied when the estimated production of the products referred to in the regulation is determined at the end of each marketing year. The conditions for the materialization of the obligation to pay the elimination levy under Article 32a(1) of Council Regulation (EEC) No 1785/81, as subsequently amended, are satisfied when the estimated production of the products referred to in the regulation is determined at the end of each of the marketing years 1986/87 to 1990/91. The conditions for the materialization of the obligation to pay the special elimination levy under Article 1 of Council Regulation (EEC) No 1914/87 of 2 July 1987 introducing a special elimination levy in the sugar sector for the 1986/87 marketing year were satisfied when the estimated production of the products referred to in the regulation was determined at the end of the 1986/87 marketing year.

2.The first instalment of the elimination levy under Article 32a(1) of Council Regulation (EEC) No 1785/81, as subsequently amended, fell due for payment on 15 December of each of the marketing years 1986/87 to 1990/91, and the second instalment of that elimination levy fell due for payment on 15 December of the year following the marketing year in question. The special elimination levy under Article 1 of Council Regulation (EEC) No 1914/87 fell due for payment on 15 December 1987.

*1 Original language: Danish.

1 Case C-19/94 SAFBA [1995] ECR I-1051.

2 OJ 1981 L 177, p. 4.

3 Amending Regulation (EEC) No 1785/81 on the common organization of the markets in the sugar sector (OJ 1986 L 87, p. 1).

4 OJ 1986 L 283, p. 15.

5 OJ 1987 L 183, p. 5.

(6) OJ 1987 L 290, p. 10.

(7) Paragraph 30.

(8) Regulation No 1443/82 of 8 June 1982 laying down detailed rules for the application of the quota system in the sugar sector (OJ 1982 L 158, p. 17).

(9) OJ 1984 L 254, p. 9.