ECJ Decision Research Articles

The Role of the Social Partners and the ‘Overall protection of temporary agency workers’: The ECJ decision in the TimePartner case and the legal and actual situation in Germany

This article critically examines the European Court of Justice's (ECJ) decision in the TimePartner case and its implications for labour market integration in the context of temporary agency work. The author supports the ECJ's position on the rule-exception relationship within Directive 2008/104/EC, emphasising equal treatment for temporary agency workers. The analysis explores the alignment between the ECJ's approach and the Directive's goal of creating a non-discriminatory, transparent, and proportionate framework for worker protection. Within the German legal landscape, where there has been reluctance to implement the Directive, complex collective agreements have led to substantial remuneration disparities between regular employees and temporary agency workers. The absence of statutory regulations on overall protection for temporary agency workers, coupled with reluctance on the part of courts to intervene in collective agreements, presents challenges for labour market integration. The article also addresses the assumption of an inherent warranted correctness of collective agreements and its potential implications for EU law enforcement, recognising this may limit the judicial review of collective agreements for compliance with EU Directives, potentially undermining EU law effectiveness. In conclusion, this analysis sheds light on the consequences of the ECJ's TimePartner case decision, particularly in Germany, and suggests the need for more detailed, industry-specific collective agreements to better meet the Directive's requirements.

VAT and the Concept of Fixed Establishment: The Cabot Plastics Belgium Case

In this article, the authors analyse an important ECJ decision in the Cabot case concerning the interpretation of the concept of fixed establishment for VAT purposes, and explain the practical consequences that this case has for taxable persons carrying out cross-border activities.

Group Taxation Regimes Across the European Union: A Domestic Tax Regime Beyond Borders?

In this note, the author discusses the impact of the freedom of establishment on group taxation rules across several EU Member States (France, Luxembourg and the Netherlands), The selection of these Member States was linked to the fact that they were involved in the ECJ case law highlighted as part of this note. in light of the recent ECJ decision in Manitou BF (C-407/22), FR: ECJ, 11 May 2023, Case C-407/22, Ministre de l’Economie, des Finances et de la Relance v. Manitou BF SA, ECLI:EU:C:2023:392, Case Law IBFD. as well as older ECJ case law. It also discusses practical examples that demonstrate the value of group taxation rules for taxpayers amid European and international tax developments.

Accessory Tax Obligations Imposed on Digital Service Providers, Opinion Statement ECJ-TF 2/2023 on the ECJ Decision of 22 December 2022 in Airbnb Ireland and Airbnb Payments UK (Case C-83/21)

In this CFE Opinion Statement, submitted to the EU Institutions in June 2023, the CFE ECJ Task Force comments on the ECJ decision in Airbnb Ireland and Airbnb Payments UK (Case C-83/21), wherein the Court decided, inter alia, that it was compatible with the freedom to provide services for the Italian tax authorities to impose tax obligations on service providers offering their intermediation services regarding real estate located in Italy, including the obligation to collect and report data and to withhold tax on the intermediated payments. It held, however, that it was disproportionate to request that they appoint a tax representative resident in Italy.

Opinion Statement ECJ-TF 1/2023 on the ECJ Decision of 16 February 2023 in Gallaher Limited (Case C-707/20), on the Taxation of Capital Gains in Intra-Group Transfers

In this CFE Opinion Statement, submitted to the EU Institutions in June 2023, the CFE ECJ Task Force comments on the ECJ decision in Gallaher Limited (Case C-707/20), which provides further clarity on the scope of the fundamental freedoms, the correct comparator in establishing discrimination and the proportionality of discriminatory taxation of capital gains.

The Final Ruling of the German BFH in W AG (Case C-538/20) Concerning Non-Deductibility of Treaty-Exempt Final PE Losses

This note critically examines the final ruling of the German Supreme Tax Court (BFH) in I R 35/12 (22 February 2023) on the ECJ decision in W AG (Case C-538/20) regarding a denial of consideration of final permanent establishment losses where there is a treaty exemption. Open questions and implications for the deduction of final losses under EU law are elaborated on. Furthermore, the effects of the W AG decision and the final ruling of the German BFH on the deduction of final losses from foreign subsidiaries are discussed.

Final Danish Decision on Beneficial Ownership with Respect to Dividends Following the ECJ Decision in the “Danish Cases”

This note describes the Danish Supreme Court’s final decision in the beneficial ownership cases with respect to dividends in response to the ECJ’s 2019 decisions in Skatteministeriet v. T Danmark (Case C-116/16) and Skatteministeriet v. Y Denmark (Case C-117/16).

The Concept of Final Losses under EU Law and Its Scope of Application

In the context of the recent ECJ decision in W AG (Case C-538/20), this article examines whether the ECJ has possibly, de facto, abandoned the legal concept of final losses or whether it wants to see it continue to be applied as a restrictive ultima ratio exception (based on its long line of case law) in accordance with the principle of proportionality. In this respect, the ECJ’s line of case law will be analysed, including the recent decision in W AG on final losses from permanent establishments exempt under a tax treaty.

Opinion Statement ECJ-TF 4/2022 on the ECJ Decision of 22 September 2022 in W AG (Case C-538/20) on the Deductibility of Foreign Final Losses

In this CFE Opinion Statement, submitted to the EU Institutions in November 2022, the CFE ECJ Task Force comments on the ECJ decision of 22 September 2022 in W AG (Case C-538/20), on the deductibility of foreign final losses.

Privacy vs. Shareholder Transparency: Did the ECJ Decision in WM and Sovim SA Impair the Global Fight Against Money Laundering?

Privacy vs. Shareholder Transparency: Did the ECJ Decision in WM and Sovim SA Impair the Global Fight Against Money Laundering?

The ECJ’s Decision in A SCPI (C-342/20) – A Missing Piece of One Puzzle and a New Piece of Another?

In this article, the author reflects on the ECJ decision in A SCPI (Case C-342/20), wherein the Court struck down the Finnish rules awarding the benefits of the Finnish fund taxation system to domestic funds as well as foreign funds that happen to also fulfil the criteria for the domestic system.

Bauer and Beyond: The Changing Interpretation of Article 8 of Directive 2008/94/EC and Its Impact on EU Member State (and UK) Pension Protection Arrangements on Employer Insolvency

In this article, the interpretation of the Court of Justice of the European Union (ECJ) of Article 8 of Directive 2008/94/EC (protecting employee pension rights on employer insolvency) (‘Art. 8’) over the last 14 years is reviewed. In six cases the ECJ has ruled on the correct transposition of Article 8: Robins, Hogan, Webb-Sämann, Hampshire, Bauer and TMD. Initially the ECJ decided that Article 8 required a 50% minimum level of protection of the value of pensions. This raised a lot of further questions. More recently it decided, in Bauer, to add a further underpin based on the Eurostat at-risk-of-poverty threshold. The Bauer decision, in the authors’ view, makes two possible errors, discussed in this article, which might create legal uncertainty as to how the additional underpin can, in practice, be administered. The Bauer underpin was unforeseeable and suggests possible (excessive) judicial activism. Our review of the Article 8 ECJ case law identifies continuing gaps in compliance in the UK (the lack of protection for unfunded pension schemes) and in the Netherlands (if an employer has agreed to provide additional funding to make good benefit shortfalls). In contrast, we identify that Article 8 does not require the protection of early retirement benefits (or invalidity benefits) in contrast to the ECJ decision in Beckmann. We discuss the use, in an English case (Hughes), of an age discrimination argument to remove a compensation cap in the UK Pension Protection Fund (PPF) for those below normal pension age using Article 21 of the EU Charter of Fundamental Rights and Article 14 of the European Convention on Human Rights. Our review may help identify potential areas of noncompliance with the transposition of Article 8 in other Member States.

Taxation of Corporate-Based Investment Funds in Finland – A SCPI (Case C-342/20) as an Example of Discriminatory Treatment Based on Legal Form

This article analyses the decision handed down by the ECJ in Case C-342/20, which pertains to the tax treatment of a French investment fund in Finland. The Finnish withholding tax regime applied to foreign investment funds has been challenged in several tax disputes since Aberdeen in 2009. In 2020, the Finnish legislator enacted new legislation on the tax treatment of foreign investment funds. The compatibility of this legislation with the free movement of capital is at the centre of the ECJ decision discussed in this article. The ECJ ruling in Case C-342/20 follows closely the way paved by earlier ECJ case law where unfavourable tax treatment of non-resident investors has been found to be widely incompatible with the fundamental freedoms. After this decision, it should be clear that cross-border payments of dividends and other investment income from EU Member States cannot be subject to disadvantageous tax treatment solely based on the legal form of the non-resident investors.

Opinion Statement ECJ-TF 1/2022 on the ECJ Decision of 25 November 2021 in État Luxembourgeois v. L (Case C-437/19) on the Conditions for Information Requests and Taxpayer Remedies

In this CFE Opinion Statement, the CFE ECJ Task Force comments on the ECJ decision in État luxembourgeois v. L (Case C-437/19) of 25 November 2021. This decision brings further clarification on the rights of information holders in respect of cross-border exchange of information, as well as on the concept of “foreseeable relevance”.

The Logistics Service Providers’ Pre-tax Deduction of Import VAT Is Still a Pipe Dream and the Recent ECJ Decision Hasn’t Changed That: Or Has It?

According to general opinion in Germany and further EU Member States, all questions regarding pre-tax deduction of import VAT by a logistics service provider (‘LSP’) have been settled: there is no right to deduction without power of disposition at the time of the import. As LSPs typically become debtor of the import VAT, but do not dispose of the imported goods, they have been excluded from pre-tax deduction in the past. Besides causing costs for involved companies in millions of Euro, this clearly violates the principle of neutrality as one of the core principles of the EU VAT directive, still no steps have been taken to rectify the situation. The requirement of power of disposition is mainly derived from the cost formula test the Court of Justice of the European Union ECJ has been traditionally applying to VAT cases. In its recent Weindel-order of 10 October 2020, C- 621/19, the ECJ has – for the first time – amended the cost formula with regard to import VAT specific aspects. This article investigates whether in the light of Weindel, power of disposition can still be made an obligatory requirement of the right to pre-tax deduction of import VAT. Value added tax, VAT, pre-tax deduction, indirect representative, logistics service provider, cost-formula test, principle of neutrality of VAT, Council Directive 2006/112/EC, VAT-directive, upstream import cost, power of disposition

Opinion Statement ECJ-TF 3/2021 on the ECJ Decision of 19 March 2021 in MK v. Autoridade Tributária e Aduaneira (Case C-388/19) on the Option of Taxpayers to Avoid Discriminatory Taxation of Capital Gains

In this CFE opinion statement, the CFE ECJ Task Force comments on the ECJ decision in MK v. Autoridade Tributária e Aduaneira (Case C-388/19) of 18 March 2021. The Court confirmed its previous case law and held that the Portuguese (optional) regime for taxation of capital gains from immovable property of non-residents was contrary to the free movement of capital under article 63 of the TFEU since non-residents were taxed less favourably than residents.

Das grundfreiheitliche Gebot „Du sollst nicht diskriminieren“

Using the example of the ECJ's decision on the German infrastructure use charge for passenger vehicles (C-591/17), the article addresses methodological questions of indirect discrimination in the context of the EU`s fundamental freedoms. In doing so, the question is raised whether the construction of the passenger vehicle use charge is – due to the controversy – a legal example of what can be described as a reversible figure. The central thesis is that this impression only arises due to a certain methodological perspective. The impression of a reversible figure can be dissolved as a mere illusion if one broadens the methodological perspective for the understanding of indirect discrimination. Figuratively speaking, one has to take a step back and not only focus on the discriminatory character of the vehicle use charge.

Opinion Statement ECJ-TF 4/2022 on the ECJ Decision of 22 September 2022 in Case C-538/20, W AG, on theDeductibility of Foreign Final Losses

Opinion Statement ECJ-TF 4/2022 on the ECJ Decision of 22 September 2022 in Case C-538/20, W AG, on theDeductibility of Foreign Final Losses

Opinion Statement ECJ-TF 2/2021 on the ECJ Decision of 25 February 2021 in Société Générale (Case C-403/19) on the Calculation of the Maximum Amount of a Foreign Direct Tax Credit

In this CFE Opinion Statement, submitted to the EU Institutions in September 2021, the CFE ECJ Task Force comments on the ECJ decision in Société Générale (Case C-403/19), which reinforces established case law that EU law neither prohibits juridical double taxation nor does it put an obligation on the residence Member State to prevent the disadvantages that could arise from the exercise of competence thus attributed by the two Member States.

The Complexities of VAT Grouping

This article deals with developments in 2021 in respect of the impact of VAT grouping on the VAT treatment of intercompany transactions. The main development in 2021 was the ECJ decision in Danske Bank in which it was ruled that a transaction between a Danish VAT group and a Swedish branch was in scope of VAT. The decision makes it more important to determine whether a VAT fixed establishment is in place and whether a VAT group is in place. The Italian tax authorities appear to be going even one step further by also treating transactions between a local fixed establishment and a non-EU VAT group as being in scope of VAT. The implementation of a VAT grouping regime in France also broadens the implications of Danske Bank. A pending case at the Dutch Supreme Court may change this, as it is being questioned whether the current limitations under the concept of VAT grouping may form a breach of fundamental EU principles on freedom of establishment, but proceedings have not been in the taxpayer’s favour so far.