JUDGMENT OF 9.10.1984 — JOINED CASES 91 AND 127/83 HEINEKEN BROUWERIJEN / INSPECTEURS DER VENNOOTSCHAPSBELASTING, AMSTERDAM AND UTRECHT
In Joined Cases 91 and 127/83 REFERENCE to the Court under Article 177 of the EEC Treaty by the Gerechtshof [Regional Court of Appeal], Amsterdam, for a preliminary ruling in the cases pending before that court between
THE COURT (Fifth Chamber) composed of: O. Due, President of Chamber, C. Kakouris, U. Everling, Y. Galmot and R. Joliét, Judges, Advocate General: G. F. Mancini Registrar: D. Louterman, Administrator
gives the following
JUDGMENT
Facts and Issues
I — Facts and written procedure
A — Tke national legislation
1. The Wet Selectieve Investeringsregeling
2. The Wet Investeringsrekening
B — The history of the disputes and the procedure
II — Written observations submitted to the Court
(i) Preliminary observations
(ii) The first question
(iii) The second question
(iv) The third question
(v) The fourth question
Ill — Questions put to the Commission
IV — Oral procedure
Decision
The second question
The third question
The fourth question
Costs
I —. Facts and written procedure
A —. Tke national legislation
1. The Wet Selectieve Investeringsregeling
(a). the grant of planning permission for the erection of a building;
(b). the erection of plant.
2. The Wet Investeringsrekening
B —. The history of the disputes and the procedure
1. In 1978 and 1979 the plaintiff in the main proceedings, Heineken Brouwerijen BV, Zouterwoude, made two investments in the Randstad. Both.were eligible for the aid provided for by the Wet Investeringsrekening. However, for one of those investments the investment allowance was reduced pursuant to the transitional rule laid down in Article 36 of the Wet Investeringsrekening whilst the levy provided for by the Wet Selectieve Investeringsregeling was charged on the other investment.
2. Heineken's contentions before that court were that if the scheme set up by the Wet Selectieve Investeringsregeling and the Wet Investeringsrekening were considered as a whole, the measures had in fact introduced aid having the same effect as that originally envisaged by the Wetsontwerp Investeringsrekening to which the Commission had objected and against which it had commenced the procedure under Article 93 (2) of the Treaty; in particular, the Wet Selectieve Investeringsregeling, the amendments made to Article 5 (2) and 10 (2) of that Law, the differential rate contained in Article 36 of the Wet Investeringsrekening and the actual effect of that Law together with that of the Wet Selectieve Investeringsregeling had to be considered, individually or jointly, as aid, with the meaning of Article 92 of the EEC Treaty, introduced without prior notification under Article 93 (3) of the Treaty.
3. The Tax Inspectors rejected those contentions.
4. The Gerechtshof stayed the proceedings and referred the following questions to the Court for a preliminary ruling:
5. In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Economic Community, written observations were submitted to the Court by the plaintiff in the main proceedings, Heineken Brouwerijen BV, represented by F. Salomonsen, of the Amsterdam Bar, and A. E. R. Crollius, tax consultant, Rijwijk, by the Netherlands Government, represented by I. Verkade, Secretary General at the Ministry of Foreign Affairs, by the Italian Government, represented by P. G. Ferri, Avvocato dello Stato, acting as Agent, and by the Commission, represented by B. van der Esch, acting as Agent.
6. By order of 1 February 1984 the Court decided to join the two cases for the purposes of the oral procedure and judgment.
7. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure after asking the Commission the questions set out below in Part III.
8. By order of 28 May 1984 the Court decided to assign the two cases to the Fifth Chamber.
II —. Written observations submitted to the Court
(i). Preliminary observations
(ii). The first question
1. In Heineken's view, the reintroduction in June 1978 of the levies chargeable under the Wet Selectieve Investeringsregeling combined with the provisions of the Wet Investeringsrekening constitute aid within the meaning of Article 92 of the Treaty. In addition, the application of Article 36 of the Wet Investeringsrekening is in itself aid within the meaning of Article 92.
1.1. Heineken points out that, instead of the scheme originally envisaged by the Wet Investeringsrekening, consisting of a basic allowance for the whole country and a general regional allowance for investments outside the Randstad, the basic allowance has been increaseed to a rate equal to the total of the original basic allowance plus the general regional allowance. In order to achieve the regional differentiation sought, the levy system provided for by the Wet Selectieve Investeringsregeling was reintroduced at the same time whilst the rates of the basic allowances and levies have been fixed in such a way that the result is the same as that of the scheme rejected by the Commission. In this regard Heineken refers in particular to the Supplementary Statement of Reply submitted by the Government to the Netherlands Parliament on 16 March 1978 in which it is explained by means of tables and rate calculations that the combined financial effect of the levy provided for by the Wet Selectieve Investeringsregeling and the new basic allowance provided for by the Wet Investeringsrekening was the same as that of the basic allowance and general regional allowance originally envisaged.
1.2. On the question of Article 36 of the Wet Investeringsrekening, Heineken observes in particular that by virtue of Article 3 (a) (2) of the Wet Selectieve Investeringsregeling no levy is payable on buildings as a result of the reintroduction of the levy chargeable under that Law if the application for planning permission was lodged before the date of the reintroduction of the levy. During the parliamentary debates on the two pieces of legislation the situation was examined with regard to undertakings which applied for planning permission before the date of reintroduction of the levy, were not liable to pay the levy due under the Wet Selectieve Investeringsregeling but which were eligible for the basic allowance available under the Wet Investeringsrekening, which was 23% throughout the country. Such a situation would have thwarted the aim of the combination of the Wet Investeringsrekening and Wet Selectieve Investeringsregeling, i.e. regional differentiation.
2. The Netherlands Government observes first of all that the levy imposed by the Wet Selectieve Investeringsregeling is an instrument of broad application which by its nature cannot be considered aid within the meaning of Article 92 of the Treaty. After consulting the Commission the Netherlands Government considered, and still considers, that the Wet Selectieve Investeringsregeling raises no objections in Community law.
2.1. Finally, on the question of Article 36 of the Wet Investeringsrekening, the Netherlands Government points out that this article makes provision for a reduction of the basic allowance available under the Law only in a few very specific cases and applies to investments made between 23 May and 28 June 1978. It is therefore a transitional provision designed to prevent any improper use of the Wet Investeringsrekening and since it is meant to reduce a general basic allowance it cannot by its nature be treated as a measure that is contrary to Article 92 of the Treaty.
3. In its written observations the Italian Government does not express any opinion on the substance of the first question. In its view that question cannot be related to the interpretation of Article 92 of the Treaty. To classify State intervention as aid under that provision has no practical sense if this is done separately from the assessment of its compatibility with the common market, which is a matter falling within the exclusive jurisdiction of the Commission.
4. In the Commission's view, it is going too far to regard a levy designed to curb development in certain areas as indirect aid to activities in other areas. The reason is clear: an undertaking which decides to remove its business entirely or partly from the Randstad owing to the existence of such a levy has the entire common market to choose from. It is therefore quite impossible to predict whether the undertaking will establish or extend its business elsewhere in the Netherlands. That is why the Commission has never regarded the Wet Selectieve Investeringsregeling as aid. At the time._in. question it moreover stated in an unofficial administrative communication that it considered Articles 92 and 93 inapplicable.
(iii). The second question
1. In Heineken 's view, in a case such as this, it must be clear from the parliamentary documents or a notice in the Staatscourant [Official Gazette] that aid has been notified. Disclosure is of fundamental importance for undertakings since notification determines whether the implementation of aid is valid in law.
2. The Netherlands Government points out that the purpose of notifying aid to the Commission in accordance with Article 93 of the Treaty is to enable the Commission to supervise compliance by the Member States with the Treaty provisions on aid. It cannot therefore be inferred from Article 93 (3) of the Treaty or from the relevant previous decisions of the Court that a Member State has an obligation to give immediate notice in some form or another to every interested party of plans to introduce or amend aid notified to the Commission.
3. The Italian Government considers that a negative reply to the second question may be based quite simply on Article 93 (3) which does not lay down any duty to inform the public in the sense implied by the question.
4. The Commission considers that its answer to the first question renders the other questions of the Gerechtshof purposeless. With that reservation it observes that Article 93 (3) of the Treaty does not require all the parties concerned to be informed about plans to introduce or alter aid. In particular, the giving of notice to the parties concerned to submit their comments, as provided for in the first subparagraph of Article 93 (2), concerns the cases in which the Commission considers that it must commenee the procedure provided for by that article.
(iv). The third question
1. Heineken observers that even if the levy scheme provided for by the Wet Selectieve Investeringsregeling was notified to the Commission during the passage of that Law through parliament in 1973 and 1974, fresh notification ought to have been given in 1978 of the reintroduction of the levy and the adaptation of the Wet Selectieve Investeringsregeling to the Wet Investeringsrekening. However, in the correspondence between the Commission and the Netherlands Government no mention is made of a reintroduction of the levy chargeable under the Wet Selectieve Investeringsregeling in conjunction with the amended draft of the Wet Investeringsrekening. Furthermore, the Commission terminated the procedure commenced under Article 93 (3) of the Treaty in April 1978 whereas Article 36 of the Wet Investeringsrekening was not discussed by the government and the Netherlands Parliament until May and June 1978. Heineken concludes from this that the aid was not duly notified to the Commission.
2. The Netherlands Government considers that any notification by a Member State to the Commission of plans to introduce or alter aid must also cover substantive amendments of the bill to introduce aid if these are made during the bill's passage through parliament.
3. The Italian Government considers that an affirmative reply to the third question, to the effect that notification by the Member State must also cover amendments made to the bill during its passage through parliament, seems to be based on a too formalistic view of the relations which ought to exist between the Member State and the Commission. Those relations ought to consist in genuine collaboration on the part of the Member State so as to guarantee through a useful dialogue the efficient performance of the duties regarding the implementation of Article 92 allocated to the Community institution. That result can actually be achieved without undue strictness or burdensome procedures which appear alien to the spirt and rationale of Article 93 of the Treaty.
4. The Commission states that the matters to be notified by the Member States naturally include amendments made during the parliamentary reading of a bill to introduce aid.
(v). The fourth question
1. The Netherlands Government considers that if an amendment to a measure granting aid which is about to be introduced is not notified to the Commission, whereas the draft measure to which the amendment is made has been notified to the Commission, the prohibition in the last sentence of Article 93 (3) of the Treaty against the implementation of such measures must be considered to apply in principle to the part of the measure adopted in that amendment. This does not preclude the Commission from regretting the entire measure in question if it finds that the amendment alters the measure in such a way that the aid can no longer be granted.
2. The Italian Government points out that Article 93 (3) of the Treaty clearly distinguishes the preliminary stage, consisting of an informal exchange of views between the Commission and the Member State, from the possible commencement thereafter of the formal procedure which is contentious in nature and ends in the adoption of a decision. It is to that procedure to which the last sentence of Article 93 (3) clearly and. unequivocally refers when providing that the proposed measure is to be suspended until the Commission has reached a final decision. It follows that a duty not to implement aid cannot arise if the aforesaid procedure, which is only contingent and not necessarily the result of the notification of proposed aid, has not been formally commenced by the Commission. Moreover, the Commission may not commence the procedure unless it has good reason to believe that the proposed measure or amendment thereof, even if not notified, will be declared incompatible with the common market.
3. In the Commission's view, it is clear from the first sentence of Article 93 (3) that the last sentence of paragraph (3) is applicable to all planned measures to introduce or amend aid.
Ill —. Questions put to the Commission
(a). the original draft of the Wet Selectieve Investeringsregeling :
(b). the possibility of bringing that Law back into force, at the. same time as the entry into force of the Wet Investeringsrekening ;
(c). the transitional problems which Article 36 of the Wet Investeringsrekening was meant to resolve.
(a). The draft of the Wet Selectieve Investeringsregeling itself was not discussed with the Netherlands Government. However, official consultations took place on a specific aspect of the bill which was the application of the levy to be charged under the new Law to undertakings in the European Coal and Steel Community. During those consultations the officers of the Commission indicated that they did not consider the Wet Selectieve Investeringsregeling aid within the meaning of Article 92 of the EEC Treaty;
(b). The suspension of the Wet Selectieve Investeringsregeling concerned only the levy. The possible reintroduction of the levy chargeable under the Wet Selectieve Investeringsregeling was notified to the Commission during ministerial discussions on the Commission's objections to certain aspects of the Wet Investeringsrekening in its original form. Like the original draft measure, the reintroduction of the levy was not considered aid either.
(c). In view of the transitional nature of Article 36 of the Wet Investeringsrekening the Commission considered at the time that it did not need to adopt any specific position with regard to that provision.
IV —. Oral procedure
1. By two judgments of 13 April 1983, which were received at the Court on 24 May and 7 July 1983, the Gerechtshof [Regional Court of Appeal], Amsterdam, referred to the Court for a preliminary ruling pursuant to Article 177 of the EEC Treaty four questions concerning the interpretation of Articles 92 and 93 of the Treaty.
2. The questions were raised in the course of two disputes between Heineken Brouwerijen BV, the plaintiff in the main proceedings, and the Inspecteurs der Vennootschapsbelasting [Inspectors of Corporation Taxes] of Amsterdam and of Utrecht, concerning tax payable by Heineken for the period 1977 to 1979.
3. In 1972, in order to alleviate the problems arising from the congestion of urban regions situated in the western part of the Netherlands, known as the Randstad-Nederland, the Netherlands Government submitted to Parliament a bill entitled the Wet Selectieve Investeringsregeling [Law enacting a selective investment scheme], which introduced a levy on most new investments in those regions. The Wet Selectieve Investeringsregeling was adopted in 1974, but by the time it was brought into force its scope had been severely restricted, and it was suspended in 1976.
4. On 16 February 1977 the Netherlands Government tabled before the Parliament a bill entitled The Wet Investeringsrekening [Law setting up an investment fund], which provided for a system of investment allowances in the form of tax relief. In principle those allowances included a basic allowance, accorded for all investments, and selective allowances, including a general regional allowance, to be granted only for investments made outside the Randstad.
5. By a letter of 18 February 1977 the Netherlands Government notified to the Commission the draft of the Wet Investeringsrekening pursuant to Article 93 (3) of the Treaty. By a letter of 26 May 1977 the Commission replied that it had initiated the procedure provided for in Article 93 (2) of the Treaty against that draft law, in respect of the system of selective allowances and, in particular, the general regional allowance, on the ground that it did not specify the region to which it applied. Following discussions between the Commission and the Netherlands Government, the government decided not to introduce the general regional allowance and incorporated it in the basic allowance. It informed the Commission of that decision by a letter of 16 March 1978 and, on the following 21 April, the Commission notified the Netherlands Government that the procedure initiated with regard to the Wet Investeringsrekening had been terminated.
6. In the course of the Wet Investeringsrekening's passage through parliament, it was decided to bring back into force the levy provided for by the Wet Selectieve Investeringsregeling. To that end, certain amendments to the Wet Selectieve Investeringsregeling intended to coordinate the two sets of rules were inserted in the Wet Investeringsrekening. In addition it was provided in Article 36 of the Wet Investeringsrekening that, for a transitional period pending the reintroduction of the levy imposed under the Wet Selectieve Investeringsregeling, investment allowances granted in the form of tax relief were to be reduced in respect of investments made in the Randstad. The Wet Investeringsrekening was adopted on 29 June 1978 and came into force with retroactive effect from 24 May 1978. The suspension of the Wet Selectieve Investeringsregeling was revoked as from 29 June 1978.
7. In 1978 and 1979 the plaintiff in the main proceedings made two investments in the Randstad district, both of which attracted the allowances provided for by the Wet Investeringsrekening. However, in respect of one of the investments, the allowance was reduced pursuant to the transitional rule contained in Article 36 of the Wet Investeringsrekening and, in respect of the other, the levy provided for by the Wet Selectieve Investeringsregeling was imposed.
8. Before the Gerechtshof, Heineken claimed that it was entitled to the full allowances for those two investments and that they should not be subject to the levy. It maintained that, taken together, the measures adopted had in fact introduced aid which had the same effect as that which had been envisaged initially in the Wet Investeringsrekening and in respect of which the Commission had raised objections. Consequently, in Heineken's view, the Wet Selectieve Investeringsregeling, the differential rate established under Article 36 of the Wet Investeringsrekening and the actual effects of that Law combined with those of the first must be regarded, individually or jointly, as an aid, within the meaning of Article 92 of the Treaty, put into effect without the prior notification required under Article 93 (3) of the Treaty.
9. The Gerechtshof took the view that, in order to give judgment, it required an interpretation, in that respect, of Articles 92 and 93 of the Treaty. It therefore stayed the proceedings and referred to the Court the following questions, which are the same in both cases:
10. In proceedings under Article 177 of the Treaty, the Court may not rule on the interpretation of national laws and regulations or on the conformity of such measures with Community law; it may only provide the national court wiht the criteria for interpretation based on Community law which will enable that court to solve the legal problem with which it is faced. In this instance, it is therefore necessary to provide the Gerechtshof with the criteria for interpretation which will enable it to decide whether the plaintiff in the main proceedings is justified in relying upon the Netherlands Government's failure to comply with the provisions of the Treaty on State aid in order to prevent the tax authorities from applying the laws in question to it.
11. Those provisions may be relied upon by individuals only if the national measures in question constitute aid within the meaning of Article 92 and if the procedure for review provided for in Article 93 (3) has not been complied with (judgment of 22 March 1977 in Case 78/76 Steinike and Weinlig [1977] ECR 595). Where it is apparent from the facts of the case that the procedural rules were followed, it is in any event unnecessary to inquire into the nature of the national measure concerned. Consequently, the Court considers it appropriate to examine in the first place the questions designed to establish whether the procedural rules laid down in Article 93 (3) of the Treaty were complied with.
12. By this question the Gerechtshof asks whether the notification to the Commission by a Member State of a plan to grant aid must be immediately and clearly made known to all the interested parties.
13. According to Article 93 (3) of the Treaty,
14. That text makes no reference to an obligation of the type mentioned in the second question and that is consistent with the objectives of the aforesaid provisions and the context within which they fall. The sole purpose of the first sentence of Article 93 (3) is to provide the Commission with the opportunity to review, in sufficient time and in the general interest of the Communities, any plan to grant or alter aid. At the same time, the interests of any individuals concerned are protected by Article 93 (2), which requires the Commission, when it initiates the procedure provided for in that paragraph, to give notice to the interested parties to submit their comments.
15. In reply to the second question it must therefore be stated that Article 93 (3) of the Treaty does not require that the notification to the Commission by a Member State of plans to grant or alter aid should be immediately made known to all the interested parties; such an obligation falls upon the Commission alone when it initiates the procedure provided for in Article 93 (2).
16. In this question the Gerechtshof asks whether the obligation to inform the Commission of plans to grant aid which is imposed on Member States by the first sentence of Article 93 (3) also applies to alterations made to such plans in the course of parliamentary debate.
17. It is sufficient to note that Article 93 (3) is not confined solely to the grant of aid, but also covers the alteration thereof, and that the aforesaid aim of the first sentence of that provision could not be achieved if the Commission were informed only of the initial plans and not of subsequent alterations. However, it must be added that such information may be supplied to the Commission in the course of the consultations which take place between the Commission and the Member State concerned following the initial notification.
18. In reply to the third question it must therefore be stated that the obligation provided for in the first sentence of Article 93 (3) to inform the Commission of plans to grant or alter aid does not apply solely to the initial plan, but also covers subsequent alterations to that plan; such information may be supplied to the Commission in the course of the consultations which take place following the initial notification.
19. The fourth question concerns the prohibition, laid down by the last sentence of Article 93 (3), on the putting into effect of the proposed measures before the procedures prescribed in Article 93 (2) and (3) have resulted in a final decision. The Gerechtshof asks whether that prohibition applies to a plan for aid which has been duly notified in its initial version but subsequently altered without the Commission being informed of the alteration and whether, in such a case, the prohibition applies solely to the part of the aid which has been introduced by that alteration.
20. As the Court has already emphasized, inter alia in its order of 20 September 1983 (Case 171/83 R Commission v France [1983] ECR 2621), the final sentence of Article 93 (3) is the means of safeguarding the machinery for review laid down by that article, which, in turn, is essential for ensuring the proper functioning of the common market. The prohibition laid down by that article is intended to ensure that the aid measures do not come into effect before the Commission has had a reasonable period in which to consider the plan in detail and, if necessary, to initiate the procedure provided for in Article 93 (2).
21. It follows that the prohibition applies to the aid programme in its entirety and in the final version adopted by the national authorities. If the initial plan has been altered, the last sentence of Article 93 (3) therefore applies to the plan as altered. Where the plan has been notified and the Commission has not raised any objections to it, but the Member State concerned has made alterations of which the Commission has not been informed, the provision precludes the putting into effect of the aid programme in its entirety. The position may be different only where the alteration in question is in actual fact a separate aid measure which should be assessed separately and which is therefore not such as to influence the assessment which the Commission has already made of the initial plan.
22. In reply to the fourth question it must therefore be stated that the prohibition on the putting into effect of aid measures, which is laid down in the last sentence of Article 93 (3), applies to the proposed aid programme in its entirety and in the final version adopted by the national authorities. If the plan initially notified has in the meantime undergone alterations of which the Commission has not been informed, the prohibition applies to the plan as altered, unless the alteration in question is in actual fact a separate aid measure which should be assessed separately and which is therefore not such as to influence the assessment which the Commission has already made of the initial plan; in that case, the prohibition applies only to the aid measure introduced by the alteration.
23. In the light of the replies given to the second, third and fourth questions, the Court takes the view that it is unnecessary to consider the first question.
24. The costs incurred by the Netherlands Government, by the Government of the Italian Republic and by the Commission, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties in the main proceedings are concerned, in the nature of a step in the proceedings before the national court, the decisions on costs is a matter for that court.
On those grounds, THE COURT (Fifth Chamber), in answer to the questions referred to it by the Gerechtshof, Amsterdam, by judgments of 13 April 1983, hereby rules:
1 Article 93 (3) of the Treaty does not require that the notification to the Commission by a Member State of plans to grant or alter aid should be immediately made known to all the interested parties; such an obligation falls upon the Commission alone when it initiates the procedure provided for in Article 93 (2).
2 The obligation provided for in the first sentence of Article 93 (3) to inform the Commission of plans to grant or alter aid does not apply solely to the initial plan, but also covers subsequent alterations to that plan; such information may be supplied to the Commission in the course of the consultations which take place following the initial notification.
3 The prohibition on the putting into effect of aid measures, which is laid down in the last sentence of Article 93 (3), applies to the proposed aid programme in its entirety and in the final version adopted by the national authorities. If the plan initially notified has in the meantime undergone alterations of which the Commission has not been informed, the prohibition applies to the plan as altered, unless the alteration in question is in actual fact a separate aid measure which should be assessed separately and which is therefore not such as to influence the assessment which the Commission has already made of the initial plan; in that case, the prohibition applies only to the aid measure introduced by the alteration.