CFE ECJ Task Force: Opinion Statement ECJ-TF 2/2022 on the CJEU decision of 27 January 2022 in Case C-788/19, European Commission v Kingdom of Spain (Form 720), on the lack of proportionality of the consequences derived from the failure to provide information concerning assets or rights held in other Member States of the European Union or the EEA

Eric Kemmeren, Alfredo García Prats, Werner Haslehner, Volker Heydt, Georg Kofler, Michael Lang, João Nogueira, Christiana HJI Panayi, Emmanuel Raingeard de la Blétière, Confedédération Européene, HEC – University Liège, Alexander Rust, Hogan Lovells

Research output: Contribution to journalArticleProfessional

Abstract

This is an Opinion Statement, submitted to the EU institutions in May 2022, of the CFE ECJ Task Force on Commission v. Spain (Case C-788/19) (also cited as the Form 720 case), in which the First Chamber of the Court of Justice of the European Union (ECJ) delivered its decision on 27 January 2022. The Court, in its decision, ruled in favour of the action brought by the Commission and did not fully follow the reasoning of Advocate General Saugmandsgaard Øe in his Opinion of 15 July 2021, who proposed only partially accepting the action brought by the Commission.

The Court held that the Kingdom of Spain had failed to fulfil its obligations under article 63 of the Treaty on the Functioning of the European Union (TFEU) (2007) and article 40 of the EEA Agreement (1992) [4.] by imposing disproportionate measures on the failure to duly comply with the obligation to provide information concerning assets and rights located abroad. The Spanish legislation provided for very serious economic consequences, such as the taxation of the value of not duly declared assets and rights as unjustified capital gains with no limitation period. The legislation also provided for a proportional fine of 150% of the tax calculated on amounts corresponding to the value of those assets or those rights, which could be applied concurrently with flat-rate fines. At the same time, such flat-rate fines were much higher than the penalties imposed in respect of similar infringements in a purely national context, which were not capped. Commission v. Spain is an important case, as it addresses a number of relevant issues regarding the limits that the Member States must respect when implementing measures to counteract international tax avoidance and evasion.
Original languageEnglish
Pages (from-to)304-310
Number of pages7
JournalEuropean Taxation
Volume62
Issue number7
Publication statusPublished - 2022

Keywords

  • European Tax Law
  • Disclosure
  • Exchange of information
  • Tax shelters
  • Tax Avoidance
  • Tax evasion
  • Free movement of capital

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