OPINION OF ADVOCATE GENERAL

delivered on 12 October 1995 (*1)

1.This case arises out of delays in the reimbursement of value added tax to nonresident taxable persons by Spain. It is effectively undefended and an oral hearing has been dispensed with.

2.The Commission has brought the present application pursuant to Article 169 of the EC Treaty, seeking the following reliefs:

—a declaration that the Kingdom of Spain has failed to fulfil its obligations under the Treaty:

(a)by not respecting the six-month period allowed for the reimbursement of value added tax to taxable persons not established in the territory of the country, as required by Article 7(4) of the Eighth Council Directive 79/1072/EEC of 6 December 1979, concerning arrangements for the refund of value added tax to taxable persons not established in the territory of the country;

(b)by failing to comply with the duty of cooperation of Member States required by Article 5 of the Treaty;

to order the Kingdom of Spain to bear the costs of the proceedings.

3.Article 7(4) of the Eighth Council Directive 79/1072/EEC (the ‘Eighth Directive’) (1) provides as follows:

‘Decisions concerning applications for refund shall be announced within six months of the date when the applications, accompanied by all the necessary documents required under this Directive for examination of the application, are submitted to the competent authority referred to in paragraph 3. Refunds shall be made before the end of the abovementioned period, at the applicant's request, in either the Member State of refund or the State in which he is established. In the latter case, the bank charges for the transfer shall be payable by the applicant.

The grounds for refusal of an application shall be stated. Appeals against such refusals may be made to the competent authorities in the Member State concerned, subject to the same conditions as to form and time limits as those governing claims for refunds made by taxable persons established in the same State.’

4.The Commission does not dispute that, in principle, the provisions of the Eighth Directive have been correctly implemented by Royal Decree No 1624/92 (2) but, rather, its complaint concerns the extent to which the provisions of that Directive, though formally implemented into national law, are being applied in practice. The Commission's concern arises from the fact that from 1991 onwards it was in receipt of numerous complaints by undertakings established in other Member States to the effect that they were regularly failing to receive reimbursements within the six-month period and sometimes were subject to delays of up to twelve months. Furthermore, in many cases the Spanish tax authorities allegedly neglected even to inform those applicants, who had not been reimbursed at the end of the six-month period, of the state of advancement of their files.

5.In the light of this apparent failure to comply with the provisions of Article 7(4) of the Eighth Directive, the Commission decided to initiate the pre-contentious stage of proceedings under Article 169 of the Treaty. By way of a formal letter of 10 November 1992, the Spanish Government was invited to submit its observations concerning these delays within two months. At the request of the Spanish authorities, this period was extended by the Commission to 10 February 1993.

6.In the absence of any formal response from the Spanish Government to the formal letter, the Commission on 28 March 1994 sent a reasoned opinion pursuant to Article 169 of the Treaty requiring the Kingdom of Spain to comply with its terms within two months. Not having received a reply to that opinion within that two-month period, the Commission brought the present application which was registered at the Court on 18 January 1995.

7.Following the written procedure, the Court decided, with the consent of the parties pursuant to its powers under Article 44a of the Rules of Procedure, to dispense with the necessity for an oral hearing in this case.

8.On the basis of figures supplied by the Spanish authorities, at an informal meeting held with Commission officials on 14 July 1993, the Commission notes that since 1990 over 5000 files have been pending at the end of each year, with the figure for 1993 rising to 5479 of which 4915 concerned taxable persons resident within the Community. According to the figures given for Community residents, in more than 400 cases reimbursements were not made within the six-month period.

9.The Commission submits that these figures demonstrate that the Kingdom of Spain has manifestly failed to comply with its obligations under Article 7(4) of the Eighth Directive. It refers to the judgment of the Court in Commission v Italy (3) in which the Italian Republic was condemned for an identical violation of Community law. According to the Commission that case clearly established the principle that a Member State could not invoke defects in its administrative organization to shirk its obligations under the Eighth Directive.

10.The Kingdom of Spain does not dispute that an infringement has occurred. In its defence it points to the major efforts that it has been making over several years to conform with the requirements of the Eighth Directive regarding the six-month period for processing applications for refunds. It submits that recent statistics demonstrate that these efforts have borne fruit to the effect that at present the maximum delays amount only to two and a half months and the average delay to 52 days. (4) It distinguishes the present situation from that treated by the Court in its judgment in the Italian case: whereas in that case the failure to meet the deadline set by the Eighth Directive was systematic, in the present case the delays in payment are merely occasional and marginal affecting only a small percentage of files, in fact 11.4%, and that the quantitative effects of the delay both in time and amount are not significant.

11.The Commission also initially maintained that the uncooperative attitude of the Spanish authorities, in not formally responding to either the formal letter or the reasoned opinion and in not readily making available, prior to the 14 July 1993 meeting, the data and information sought by the Commission in relation to its administrative practices, constituted a breach by the Kingdom of Spain of its duty of cooperation pursuant to Article 5 of the Treaty. The Spanish Government in its defence rejected this allegation. It pointed to the informal contacts which had occurred with the Commission and, particularly, to that 14 July meeting as evidence of its cooperation during the non-contentious phase of these proceedings.

12.In its reply the Commission rejects the submission advanced by the Spanish Government regarding the informal way in which it had cooperated with the Commission prior to the judicial phase of this case. Furthermore, in terms of the number of applications pending, the delays in their processing and the outstanding amounts involved, the Commission contradicts the Spanish contention that a significant improvement has taken place since 1993. None the less, the Commission, having regard to the explanations advanced by the Spanish Government in its defence, indicated that it was no longer necessary to maintain its application based on an infringement of Article 5 of the Treaty.

13.In its rejoinder the Spanish Government does not contest the less than enthusiastic interpretation of the recent figures advanced in its defence which is rendered by the Commission in the reply. While maintaining its formal plea that the application should be rejected, it notes the Commission's recognition of its efforts fully to comply with requirements of the Eighth Directive and declares its intention not only to continue but also to intensify these efforts.

14.The obligation imposed by Article 7(4) of the Eighth Directive is unconditional. Member States are obliged to ensure both the full and exact application of the provisions of any directive. (5) It follows, in my opinion, that a Member State may not seek to minimize its failure fully and exactly to comply with unambiguous obligations imposed by a directive by referring to the number of instances, albeit the majority, in which the national authorities have complied with the relevant provisions. It may well be, particularly in the light of the improvements which have been made, that the Spanish delays in reimbursing nonresident taxable persons do not amount to a systematic failure to comply with the terms of Article 7(4) of the Eighth Directive. At the same time the Commission is undoubtedly correct in submitting that a delay of 50 to 60 days over and above that permitted in the reimbursement of a not insignificant number of claims can only be regarded as a manifest infringement by the Kingdom of Spain of that article.

15.In my opinion, the Kingdom of Spain should be condemned to bear the costs of these proceedings pursuant to Article 69(2) of the Rules of Procedure. While the Commission subsequently decided not to pursue one of the initial aspects of its application to the Court and while the Kingdom of Spain has asked for its costs, I do not believe that the Commission acted unreasonably or vexatiously within the meaning of Article 69(3), second indent, of the Rules of Procedure in bringing that matter to the Court. Prior to the Commission's very reasonable decision to drop its request concerning Article 5 of the Treaty, neither the allegation regarding pre-July 1993 delays in obtaining data and information from the Spanish authorities nor the failure of the Spanish Government to respond formally to the Commission at any stage of the non-contentious phase of these proceedings was convincingly explained.

Conclusion

Accordingly I am of the opinion that the Court should:

(1)declare that

—by not respecting the six-month period allowed for the reimbursement of value added tax to taxable persons not established in the territory of the country as required by Article 7(4) of the Eighth Council Directive 79/1072/EEC of 6 December 1979, concerning arrangements for the refund of value added tax to taxable persons not established in the territory of the country,

the Kingdom of Spain has failed in its obligations under the Treaty;

(2)order the Kingdom of Spain to bear the costs of these proceedings.

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(1) Original language: English.

(2) OJ 1979 L 331, p. 11.

(3) The provisions of Article 7(4) are implemented by Article 31 of this Decree, which is dated 29 December 1992.

(4) Case C-287/91 [1992] ECR I-3515.

(5) The statistics provided by the Kingdom of Spain in its defence cover the period up to 20 February 1995.

(6) See, c. g., Cases 91/79 and 92/79 Commission v Italy [1980] ECR 1099 and 1115, paragraph 6 of both judgments.