Report for the Hearing in Case C-162/91
I — Law
1. Community law
Article 2(5) of Council Regulation (EEC) No 797/85 of 12 March 1985 on improving the efficiency of agricultural structures provides as follows:
In its judgment in Case 312/85 VilL Banfi the Court interpreted a similar provision, Article 3(1) of Council Directive 72/159/EEC of 17 April 1972 on the modernization of farms, as meaning that Member States, when laying down the criteria to be fulfilled by a legal person in order to be regarded as a farmer practising farming as his main occupation, are not permitted to exclude certain types of legal person from the scope of the directive solely by reason of their legal form.
2. The Italian legislation
The sole text of the provisions on registration duty approved by Decree of the President of the Republic No 131, of 26 April 1986, provides (Tariff, Part one, Article one) for a registration duty of 8% to apply to measures effecting the transfer of immovable property for value. However, the rate is 15% for transfers of farm land and attached farm buildings to persons other than farmers practising farming as their main occupation, associations or cooperative societies as defined in Articles 12 and 13 of Law No 153 of 9 May 1975 on the implementation of the directives of the Council of the European Communities for the reform of agriculture.
The concept of farmer practising farming as his main occupation defined in those provisions covers only, apart from natural persons (Article 12), agricultural cooperatives and associations of farmers (Article 13) and excludes capital companies.
II — Facts and procedure
1. The main proceedings
The Stradella land registry considered that the acquisitions of land registered on 18 October 1988 by the company Tenuta il Bosco Sri should be taxed at the rate of 15% rather than 8% on the ground that the purchaser was a capital company (a limited liability company) and therefore did not fall within the categories provided for in Articles 12 and 13 of Law No 153.
Tenuto il Bosco appealed to the Commissione Tributaria di I Grado di Voghera against the notices of assessment, claiming that it was contrary to Article 2(5) of Regulation No 797/85 to exclude capital companies from the concept of farmer as did the Italian legislation.
2. The question referred for a preliminary ruling
Although of the opinion that the decision in Case 312/85 was effective erga omnes and represented a general principle which should be observed in interpreting the provision referred to, the Commissione Tributaria considered that the scope of the decision could not be extended to a provision other than the one it interpreted.
The national court therefore considered that a further reference to the Court of Justice of the European Communities was required in order to obtain from it a definitive interpretation of Article 2(5) of Regulation No 797/85.
The Commissione Tributaria observes that in similar cases the Tribunale Amministrativo Regionale (Regional Administrative Court) Umbria on 17 December 1984, and the Consiglio dello Stato (Court of Last Instance in Administrative Matters) on 21 November 1988 held that the description of farmer could not be limited to the cases envisaged by the Italian legislation since such a limitation would lead to a clear difference of treatment within the Community legal order between recipients of one and the same benefit.
The national court considers that, in the event that the interpretation given by the Court of Justice of Article 3(1) of the directive, which has the same wording as Article 2(5) of Regulation No 797/85, is confirmed, the national court would have to disapply the national provisions at issue, because they are contrary to higher-ranking Community legislation.
Accordingly, the Commissione Tributaria decided, by an order of 18 April 1991, that it was
3. Written procedure before the Court
The order for reference was received at the Court Registry on 19 June 1991.
Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were submitted by
Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry.
By decision of 25 February 1992, pursuant to Article 95(1) and (2) of the Rules of Procedure, the Court assigned the case to the Second Chamber.
III — Summary of the written observations submitted to the Court
The applicant in the main proceedings observes that the terms of the provision of Regulation No 797/85 at issue are exacdy the same as those of the corresponding provision of the directive interpreted by the Court in Case 312/85.
It considers that the reference for a preliminary ruling could therefore have been avoided, as the correct application of Community law is so obvious as to leave no scope for reasonable doubt. The mere fact that the case concerns a provision of a regulation rather than a directive only serves to support the argument that the provision is directly applicable and can therefore be relied on by a private person.
Not only does the regulation not exclude legal persons, but it expressly includes them within its scope if they satisfy the conditions laid down in Article 2 and the definition of farmer practising farming as his main occupation contained in it. The wording and the logic of the directive and the regulation make it abundandy clear that Article 2 of the regulation also does not permit Member States, when they define the criteria which persons other than natural persons must satisfy in order to be regarded as farmers practising farming as their main occupation, to exclude from the scope of the regulation any type of legal person solely on the ground of its legal form.
The Commission observes that the Court considered that the conditions laid down in Article 2 of Directive 72/159 were unrelated to the form in which a legal person was constituted and concluded that Article 3(1) of that directive did not permit Member States to exclude certain types of legal person from the scope of the directive solely by reason of their legal form.
Since the wording and context of Article 2(5) of Regulation No 797/85 are identical to those of Directive 72/159, the Commission has no doubt that the Article in question must be interpreted in the same way.
However, the concept of farmer as defined in Article 2(5) of the regulation applies, according to the wording, only for the purposes of this regulation, as was also the case with Directive 72/159. The definition was thus determined by the objectives pursued by the specific Community provision, and is not a general definition capable of being applied to any field.
The Commission observes that, as the Court's case-law confirms, the Treaty contains no precise definition of agriculture and still less of agricultural holding. It is therefore for the Community institutions to work out, where appropriate, for the purposes of the rules deriving from the Treaty such a definition of agricultural holding.
Although the words agricultural holding are used in various places in the Community texts adopted by the Council or the Commission in the sphere of agriculture, the definition of these words, far from being uniform throughout the texts, which are in any case fairly heterogenous, varies according to the specific objectives pursued by the Community rules in question.
The main proceedings are not in any way concerned with an aid or advantage provided for in Regulation 797/85 but only with the tax rules applying in Italy to the transfer of land. In that connection, the Commission emphasizes that Article 4(1) of Regulation No 797/85, and now Article 7(1) of Regulation No 2328/91, expressly exclude expenditure incurred in buying land from the system of aids for investment laid down by the regulation.
Consequently, as was stated in connection with social security in Case 85/77, mentioned above, the concept of agricultural holding which emerges from Regulation No 797/85 is not relevant to the field of taxation, which in principle falls within the competence of the Member States.
The Commission therefore suggests that the Court should reply to the national court that Article 2(5) of Regulation No 797/85 should be interpreted as meaning that it does not permit Member States, when they define the criteria which a person other than a natural person must satisfy in order to be regarded as a farmer practising farming as his main occupation, to exclude from the scope of the said regulation certain types of company solely on the ground of their legal form. The fiscal rules applicable to the transfer of land do not fall within the scope of the regulation.
1 Language of the case: Italian.
2 OJ 1985 L 93, p. 1.
3 [1986] ECR 4039.
4 OJ, English Special Edition 1972 (II), p. 324.
5 Gazzetta Ufficiale della Repubblica Italiana —Supplement No 99 of 30 April 1986, p. 22.
6 Gazzetta Ufficiale della Repubblica Italiana No 137 of 26 May 1975, p. 3298.
7 Il Foro Amministrativo 1988, No 11, Parte Prima, p. 3289 et seq.
8 See the judgment in Case 85/77 Santa Anna Azienda Avicola [1978] ECR 527.
9 Council Regulation (EEC) No 2328/91 of 15 July 1991 on improving the efficiency of agricultural structures (OJ 1991 L 218, p. 1).