12.9.2009

EN

Official Journal of the European Union

C 220/27

(Case C-267/09)

2009/C 220/52

Language of the case: Portuguese

Parties

Applicant: Commission of the European Communities (represented by R. Lyal and G. Braga da Cruz, Agents)

Defendant: Portuguese Republic

Form of order sought

—a declaration that, by approving and maintaining in force statutory provisions contained in Article 130 of the Code of Personal Income Tax (Código do Imposto sobre o Rendimento das Pessoas Singulares, ‘the CIRS’), that require taxpayers not resident in Portugal to appoint a tax representative, the Portuguese Republic has failed to fulfil its obligations under Articles 18 and 56 of the EC Treaty and the corresponding articles of the EEA Agreement:

—an order that the Portuguese Republic should pay the costs.

Pleas in law and main arguments

The Commission considers that Article 130 of the Code of Personal Income Tax lays down a general obligation imposed on persons not resident in Portuguese territory to appoint a tax representative resident in Portugal, an obligation incompatible with Articles 18 EC and 56 EC and with the corresponding articles of the EEA Agreement:

(a)on the one hand, an obligation imposed on persons not resident in Portuguese territory who receive only income definitively taxed at source to appoint a tax representative resident in Portugal;

(b)on the other hand, an obligation imposed on persons not resident in Portuguese territory who receive income requiring the submission of a tax return to appoint a tax representative resident in Portugal.

According to the Commission, a general obligation such as that laid down in Article 130 of the CIRS is contrary to the principle of free movement of persons and capital enshrined in Articles 18 and 56 EC and in the corresponding articles of the EEA Agreement, for it is discriminatory (in relation to persons not resident in Portuguese territory) and at the same time it is disproportionate to the aim pursued.

It is discriminatory in that, in practice, that obligation represents a financial charge imposed on non-residents, given that in most cases such representatives will not offer their services free of charge. Moreover, even if the services of a tax representative are offered free of charge, the mere fact that it is mandatory to appoint one is, in itself, an impediment to the free movement of persons and capital, for it must –if that impediment is not to exist — be for the taxpayer himself to decide whether he wishes to appoint a tax representative.

In addition, even if the tax representative has no obligation or responsibility whatsoever to pay the tax, but must do no more than perform duties of a formal nature, the mere fact that it is compulsory to appoint a representative is, per se, an impediment to the free movement of persons and capital, for it must –if that impediment is not to exist — be for the taxpayer himself to decide whether he wishes to appoint a tax representative.

Nor is that obligation proportionate, for the objective pursued, that of ensuring effective fiscal control and of combating tax avoidance, while legitimate, might be attained by less restrictive methods.

On the one hand, Council Directive 2008/55/EC of 26 May 2008 on mutual assistance for the recovery of claims relating to certain levies, duties, taxes and other measures, codifying Council Directive 76/308/EEC of 15 March 1976, provides for mutual assistance in the recovery of claims relating to taxes, and so for income taxes (compare Article 2(g)), as is the case with the IRS (personal income tax). On the other hand, as provided in Council Directive 77/799/EEC of 19 December 1977 concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation, the competent authority of one Member State may always request the competent authority of another Member State to forward to it the information necessary to combat tax avoidance.

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(1) OJ 2008 L 150, p. 28.

(2) OJ 1977 L 336, p. 15.