CJEU, 4th chamber, December 17, 2015, No C-342/14

THE COURT (Fourth Chamber),

Judgment

1 This request for a preliminary ruling concerns the interpretation of Article 5 of Directive 2005-36-EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (OJ 2005 L 255, p. 22), as amended by Commission Regulation (EU) N° 623-2012 of 11 July 2012 (OJ 2012 L 180, p. 9; "Directive 2005-36"), of Article 16 of Directive 2006-123-EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36), and of Article 56 TFEU.

2 The request has been made in proceedings between X-Steuerberatungsgesellschaft ('X') and the Finanzamt Hannover-Nord (Hannover-Nord Tax Office; 'the tax office') concerning the latter's refusal to accept X as the authorised representative of a company within the context of a turnover tax assessment procedure.

Legal context

EU law

Directive 2005-36

3 Article 1 of Directive 2005-36, entitled "Purpose", provides:

"This Directive establishes rules according to which a Member State which makes access to or pursuit of a regulated profession in its territory contingent upon possession of specific professional qualifications (referred to hereinafter as the host Member State) shall recognise professional qualifications obtained in one or more other Member States ... and which allow the holder of the said qualifications to pursue the same profession there, for access to and pursuit of that profession."

4 Article 2 of that directive, entitled 'Scope', provides in paragraph 1:

"This Directive shall apply to all nationals of a Member State wishing to pursue a regulated profession in a Member State, including those belonging to the liberal professions, other than that in which they obtained their professional qualifications, on either a self-employed or employed basis."

5 Article 5 of the directive, entitled "Principle of the free provision of services", is included in Title II of the directive, entitled "Free provision of services". Article 5 states:

"1. Member States shall not restrict, for any reason relating to professional qualifications, the free provision of services in another Member State:

(a) if the service provider is legally established in a Member State for the purpose of pursuing the same profession there (hereinafter referred to as the Member State of establishment), and

(b) where the service provider moves, if he has pursued that profession in the Member State of establishment for at least two years during the 10 years preceding the provision of services when the profession is not regulated in that Member State. The condition requiring two years' pursuit shall not apply when either the profession or the education and training leading to the profession is regulated.

2. The provisions of this title shall only apply where the service provider moves to the territory of the host Member State to pursue, on a temporary and occasional basis, the profession referred to in paragraph 1."

Directive 2006-123

6 Article 16 of Directive 2006-123, entitled "Freedom to provide services", provides in paragraphs 1 and 2:

"1. Member States shall respect the right of providers to provide services in a Member State other than that in which they are established.

The Member State in which the service is provided shall ensure free access to and free exercise of a service activity within its territory.

2. Member States may not restrict the freedom to provide services in the case of a provider established in another Member State by imposing any of the following requirements:"

7 Article 17 of that directive, entitled 'Additional derogations from the freedom to provide services", provides:

"Article 16 shall not apply to:

(6) matters covered by Title II of Directive [2005-36], as well as requirements in the Member State where the service is provided which reserve an activity to a particular profession;"

German law

8 Under Paragraph 80(5) of the Tax Code (Abgabenordnung), in the version in force during the period at issue in the main proceedings ('the Tax Code'), representatives and advisers who provide professional assistance in tax matters without being authorised to do so are not to be allowed to represent or assist their principals or customers before the tax authority.

9 Pursuant to the first sentence of Paragraph 2 of the Law on Tax Consultancy (Steuerberatungsgesetz, BGBl. 1975 I, p. 2735), in the version in force during the period at issue in the main proceedings ('the Law on Tax Consultancy'), professional assistance in tax matters may be provided only by persons or associations which are authorised for that purpose.

10 Paragraph 3 of the Law on Tax Consultancy states:

"The following persons shall be authorised to provide professional assistance in tax matters:

1. tax advisers, tax representatives, lawyers, established European lawyers, accountants and certified auditors,

2. professional partnerships in which the partners are exclusively persons referred to in subparagraph 1 above,

3. tax consultancy companies, firms of lawyers, firms of accountants and firms of auditors."

11 Temporary and occasional assistance in tax matters is governed by Paragraph 3a of the Law on Tax Consultancy, which seeks to implement Directive 2005-36 so far as concerns professional assistance in tax matters in Germany by persons and associations of another Member State. That paragraph is worded as follows:

"1. Persons who are professionally established in another Member State of the European Union or in another State Party to the Agreement on the European Economic Area [of 2 May 1992 (OJ 1994 L 1, p. 3)] or in Switzerland and who are authorised there to provide professional assistance in tax matters in accordance with the law of the State of establishment shall be authorised to provide, on a temporary and occasional basis, professional assistance in tax matters in the territory of the Federal Republic of Germany. The scope of the authorisation to provide assistance in tax matters in Germany shall be determined by the scope of that authorisation in the State of establishment. In their activities in Germany those persons shall be subject to the same professional rules as the persons specified in Paragraph 3. If neither the profession nor the training for the profession is regulated in the State of establishment, the authorisation to provide professional assistance in tax matters in Germany shall be valid only if the person has practised the profession in the State of establishment for at least 2 years during the preceding 10 years.

2. Professional assistance in tax matters under subparagraph (1) shall be permitted only if the person gives written notification to the competent authority before the first provision of a service in Germany.

The notification must contain the following:

(5) a certificate attesting that the person is legally established for the purposes of providing professional assistance in tax matters in a Member State of the European Union or in a State Party to the Agreement on the European Economic Area or in Switzerland and that, at the time of submission of the certificate, he is not prohibited, even temporarily, from carrying out that activity,

(6) evidence of professional qualifications,

(7) evidence showing that the person has pursued the profession in the State of establishment for at least 2 years during the previous 10 years, where neither the profession nor the training required for that profession are regulated in the State of establishment,"

12 The first sentence of Paragraph 5(1) of the Law on Tax Consultancy provides:

"Persons and associations other than those designated in Paragraphs 3, 3a ... may not provide professional assistance in tax matters, and in particular may not provide professional advice in tax matters."

13 Paragraph 32 of the Law on Tax Consultancy provides:

"(1) Tax advisers, tax representatives and tax consultancy companies shall provide professional assistance in tax matters in accordance with the provisions of this Law.

(2) Tax advisers and tax representatives must be appointed; they practise a liberal profession. Their activity is not a commercial activity.

(3) Tax consultancy companies shall require recognition. A precondition for recognition is that the company be managed by tax advisers acting autonomously."

14 According to the first sentence of Paragraph 35(1) of the Law on Tax Consultancy, only persons who have passed the examination as a tax adviser or who have been exempted from the examination may be appointed as tax advisers.

The facts of the dispute in the main proceedings and the questions referred for a preliminary ruling

15 According to the order for reference, X is a company incorporated and having its seat in the United Kingdom, with branches in Belgium and the Netherlands. Its business consists in finance consultancy, tax consultancy and accountancy. It is not recognised as a tax consultancy company within the meaning of the Law on Tax Consultancy.

16 X advises several principals established in Germany on tax matters and acts on their behalf in administrative procedures concerning tax. It named A Ltd, an office service company established in Germany, as its agent for taking delivery of postal items.

17 X assisted in the preparation of the turnover tax return for 2010 of C Ltd, a company established in Germany. That return was received by the tax office at the beginning of 2012. By decision of 12 March 2012, the tax office refused, on the basis of Paragraph 80(5) of the Tax Code, to accept X as the authorised representative of C Ltd for the turnover tax assessment procedure for 2010. The reason given was that X was not authorised to provide professional assistance in tax matters.

18 X brought the case before the Finanzgericht Niedersachsen (Finance Court of Lower Saxony), which dismissed its action.

19 Hearing an appeal on a point of law brought by X, the referring court finds that the conditions of Paragraph 80(5) of the Tax Code justifying X not being allowed to act as an authorised representative before the tax authority are fulfilled. According to the referring court, X is not authorised to provide professional assistance in tax matters under Paragraph 3(3) of the Law on Tax Consultancy or under Paragraph 3a thereof. However, since X relies in particular on Article 5 of Directive 2005-36, Article 16 of Directive 2006-123 and Article 56 TFEU, the referring court is uncertain whether X may successfully rely directly on those provisions.

20 That court explains that it is unsure about the position of a tax consultancy company formed in accordance with the legal provisions of a Member State, which draws up, in the Member State where it has its establishment and where tax consultancy work is not regulated, a tax return on behalf of a recipient of services in another Member State and sends that tax return to the tax authority of that other Member State, in which tax consultancy work is regulated by national law.

21 The referring court states that the Finanzgericht Niedersachsen (Finance Court of Lower Saxony) has not yet ascertained whether X did in fact provide the service at issue in the Member State of its establishment, that is the Kingdom of the Netherlands, or whether it is also established in the Member State of the recipient of that service, that is the Federal Republic of Germany.

22 However, the referring court considers that that fact does not preclude the reference for a preliminary ruling. Irrespective of the fact that the referring court cannot itself make the missing findings of fact, it is possible that, following this stage of the proceedings, the Finanzgericht Niedersachsen (Finance Court of Lower Saxony), which is responsible for finding the facts, will find that X provided the service at issue in the Netherlands and is not established in Germany. The replies given by the Court to the questions of law raised will subsequently make it possible to determine whether the Finanzgericht Niedersachsen must make findings and, if so, what those findings concern.

23 As regards Article 5 of Directive 2005-36, the referring court is uncertain, first, whether that provision is actually applicable to a company that provides services. It could be precluded by the fact that Article 2(1) of that directive provides that that directive is to apply only to nationals and not to companies. However, it is possible that account must be taken in that regard of the persons who are accountable for the management of the company concerned.

24 Secondly, the referring court is uncertain whether a service which is provided in the exercise of a profession regulated in the host Member State, but which is performed without physical crossing of the border by the persons acting for the company concerned, falls under Article 5 of that directive.

25 As regards Article 16 of Directive 2006-123, the referring court observes that, if the tax consultancy company provides the service in the Member State of its establishment, the application of that article can be ruled out on the basis of the actual wording of Article 16. In accordance with that article, Member States are to respect the right of providers to provide services in a Member State other than that in which they are established. Consequently, services provided in the territory of the Member State of establishment are not to be covered by that article.

26 If, by contrast, a tax consultancy company provides services in a Member State other than that in which it is established, Article 16 of Directive 2006-123 may, by virtue of Article 17(6) of the directive, not be applicable to those services, since tax consultancy work in the Member State where the service is provided is reserved for members of a particular profession.

27 As regards Article 56 TFEU, the referring court considers that the legislation at issue in the main proceedings constitutes a restriction of the freedom to provide services. That legislation makes it impossible for a company formed in accordance with the law of another Member State, which has its seat in that State and is not managed autonomously by tax advisers, to be recognised in Germany as a tax consultancy company and to provide professional assistance in tax matters without restriction. Such recognition presupposes that it has been established that the company is managed by tax advisers acting autonomously, and only persons who have passed the examination as a tax adviser or who have been exempted from the examination may be appointed as tax advisers.

28 The referring court adds that a company which is not authorised to provide professional assistance in tax matters can at most, under Paragraph 3a of the Law on Tax Consultancy, be authorised to provide assistance in tax matters on a temporary and occasional basis in the territory of the Federal Republic of Germany. However, that provision does not cover services provided by a company in another Member State without the persons acting on behalf of that company travelling to the territory of the Federal Republic of Germany.

29 The referring court wonders, therefore, whether that restriction of the freedom to provide services is justified by an overriding reason in the public interest. It considers that such a justification might lie in the need to ensure compliance with tax regulations and to prevent tax evasion, which is precisely the objective of the legislation at issue in the main proceedings. In particular, the purpose of confining access to tax consultancy work to certain persons and companies is to ensure that taxpayers receive qualified assistance when they fulfil their tax obligations.

30 In addition, that court observes that taxpayers must also be protected against damage which may result from advice given in tax matters by persons not possessing the professional or personal qualifications necessary to do so. Consequently, the authorisation provided for in Paragraph 3 of the Law on Tax Consultancy also contributes towards safeguarding the interests of taxpayers to which consultancy services are provided as consumers.

31 The referring court also considers that, in view of the complexity of German tax law and the fact that tax provisions are subject to very frequent amendment, the legislation at issue in the main proceedings appears appropriate and necessary for the abovementioned objectives.

32 In those circumstances, the Bundesfinanzhof (Federal Finance Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

"(1) Does Article 5 of Directive [2005-36] preclude a restriction of the freedom to provide services in a case where a tax consultancy company formed in accordance with the law of a Member State prepares in the Member State of its establishment, where tax consultancy work is not regulated, a tax return for a recipient of services in another Member State and sends it to the tax authority, and national provisions in that other Member State require that a tax consultancy company be recognised as authorised to provide professional assistance in tax matters and that the company be managed by tax advisers who act autonomously?

(2) Can a tax consultancy company, in the circumstances referred to in question 1, rely successfully on Article 16(1) and (2) of Directive [2006-123], irrespective of which of the two Member States is the one in which it provides the service?

(3) Is Article 56 TFEU to be interpreted as precluding a restriction, by measures applicable in the Member State of the recipient of services, of the freedom to provide services in the circumstances referred to in question 1, if the tax consultancy company is not established in the Member State of the recipient of the services?"

Consideration of the questions referred

Preliminary observations

33 By its questions, the referring court raises the preliminary question of whether a provision of services, such as that at issue in the main proceedings, falls within Article 5 of Directive 2005-36, Article 16(1) and (2) of Directive 2006-123 and-or Article 56 TFEU.

34 As is apparent from the order for reference, the questions start from the premiss that X provides, from the Netherlands and without the persons acting on behalf of that company travelling to the territory of the Federal Republic of Germany, professional assistance in tax matters for clients in Germany.

35 It should be noted, first, that such a provision of services does not fall within Article 5 of Directive 2005-36. Paragraph 2 of that article explicitly provides that the provisions of Title II of that directive, including Article 5 of the directive, are to apply only where the service provider moves to the territory of the host Member State. That is not the case with regard to a provision of services such as that at issue in the main proceedings.

36 Secondly, as regards Article 16(1) and (2) of Directive 2006-123, it should be recalled that, pursuant to Article 17(6) of that directive, Article 16 of the directive is not to apply, in any event, to matters covered by Title II of Directive 2005-36, or to requirements in the Member State where the service is provided which reserve an activity to a particular profession.

37 As is apparent from the order for reference, legislation such as that at issue in the main proceedings defines the conditions of access to the activity of professional assistance in tax matters and prohibits those who do not satisfy those conditions from exercising that activity. It must therefore be regarded as reserving an activity to a particular profession within the meaning of Article 17(6) of Directive 2006-123.

38 In those circumstances, as the Advocate General has stated in point 53 of his Opinion, the requirements resulting from such legislation fall within the exclusion from the scope of Article 16 of Directive 2006-123, provided for in Article 17(6) of the directive.

39 That interpretation cannot be called into question by the fact that, as is clear from paragraph 35 of this judgment, a provision of services such as that at issue in the main proceedings does not fall within Title II of Directive 2005-36. As the actual wording of Article 17(6) of Directive 2006-123 confirms, the exclusion laid down by that provision is not limited solely to matters covered by Title II of Directive 2005-36.

40 It follows that a provision of services such as that at issue in the main proceedings does not fall either within Article 5 of Directive 2005-36 or within Article 16(1) and (2) of Directive 2006-123.

41 However, a service such as that at issue in the main proceedings, which involves a cross-border element, falls under Article 56 TFEU (see, by analogy, judgment in OSA, C-351-12, EU:C:2014:110, paragraph 68).

42 In those circumstances, only the third question must be answered.

The third question

43 By its third question, the referring court asks, in essence, whether, on a proper construction of Article 56 TFEU, legislation of a Member State which defines the conditions of access to the activity of professional assistance in tax matters may not restrict the freedom to provide services of a tax consultancy company, formed in accordance with the law of another Member State in which that company is established, which draws up, in the latter Member State where tax consultancy work is not regulated, a tax return on behalf of a recipient of services in the first Member State and sends that tax return to the tax authority of the first Member State.

44 In that regard, it should be recalled that, in the absence of harmonisation of the conditions of access to a particular occupation, the Member States are entitled to lay down the knowledge and qualifications needed in order to pursue it (see, inter alia, judgment in Brouillard, C-298-14, EU:C:2015:652, paragraph 48 and the case-law cited).

45 Since the conditions for access to the activity of professional assistance in tax matters have not, up to the present time, been harmonised at EU level, the Member States retain the power to define those conditions (see, by analogy, judgment in Brouillard, C-298-14, EU:C:2015:652, paragraph 49).

46 It follows that, in the present case, EU law does not preclude German law from making access to that activity contingent on the possession of the knowledge and qualifications deemed to be necessary (see, by analogy, judgment in Brouillard, C-298-14, EU:C:2015:652, paragraph 50).

47 However, the fact remains that the Member States must exercise their powers in this area in a manner which respects the basic freedoms guaranteed by the FEU Treaty (judgment in Brouillard, C-298-14, EU:C:2015:652, paragraph 51 and the case-law cited).

48 As regards the freedom to provide services, it is settled case-law of the Court that Article 56 TFEU requires not only the elimination of all discrimination against providers of services on grounds of nationality or the fact that they are established in a Member State other than that where the services are to be provided, but also the abolition of any restriction, even if it applies without distinction to national providers of services and to those of other Member States, which is liable to prohibit, impede or render less advantageous the activities of a provider of services established in another Member State where he lawfully provides similar services (see, inter alia, judgment in Konstantinides, C-475-11, EU:C:2013:542, paragraph 44).

49 As the Advocate General has stated at points 66 and 67 of his Opinion, legislation such as that at issue in the main proceedings constitutes a restriction of the freedom to provide services. By making the exercise, by a tax consultancy company, of the activity of providing professional assistance in tax matters subject to a prior authorisation scheme, an authorisation which is itself subject to its managers having appropriate professional qualification, that legislation excludes all possibility for a tax consultancy company, established in another Member State in which that activity is lawfully carried out without being regulated, of providing its services in Germany.

50 It is indeed true that a tax consultancy company which is not authorised to provide professional assistance in tax matters can, under Paragraph 3a of the Law on Tax Consultancy, be authorised to provide temporary and occasional assistance in tax matters in the territory of the Federal Republic of Germany.

51 However, it is apparent from the information supplied by the referring court, set out in paragraph 28 of this judgment, that Paragraph 3a of the Law on Tax Consultancy does not apply to a provision of services, such as that at issue in the main proceedings, which does not involve physical travel by the service provider to the host Member State.

52 As regards the justification for the restriction constituted by national legislation such as that at issue in the main proceedings, it is settled case-law that national measures which are liable to hinder the exercise of fundamental freedoms guaranteed by the Treaty or make it less attractive may be allowed only if they pursue a legitimate objective in the public interest, are appropriate to ensuring the attainment of that objective, and do not go beyond what is necessary to attain the objective pursued (see, inter alia, judgment in Konstantinides, C-475-11, EU:C:2013:542, paragraph 50).

53 In general, it should be observed that the prevention of tax evasion and the protection of consumers, which, as is apparent from the order for reference, constitute objectives pursued by the legislation at issue in the main proceedings, are among the objectives which may be regarded as overriding reasons in the public interest capable of justifying a restriction of the freedom to provide services (see, to that effect, judgments in Konstantinides, C-475-11, EU:C:2013:542, paragraph 51 and the case-law cited, and Commission v Spain, C-678-11, EU:C:2014:2434, paragraph 45 and the case-law cited).

54 However, it is settled case-law of the Court that national authorities must ensure, inter alia, that qualifications obtained in another Member State are accorded their proper value and duly taken into account (see judgment in Peñarroja Fa, C-372-09 and C-373-09, EU:C:2011:156, paragraph 58 and the case-law cited).

55 None the less, in the present case, it is not apparent from the documents submitted to the Court that, in the case of a provision of services not involving the physical crossing of a border by the service provider or persons acting on its behalf, the legislation at issue in the main proceedings allows for a qualification in the field of professional assistance in tax matters obtained by that service provider or by those persons in another Member State to be accorded its proper value and to be duly taken into account.

56 It is true that an obligation imposed on a provider of services of professional assistance in tax matters, such as X, to make a simple prior declaration to the authorities of the Member State in which access to the activity of providing professional assistance in tax matters is regulated and in which that service provider intends to provide such services, of its intention in that regard, would not, as a rule, go beyond what is necessary to achieve the objectives of preventing tax evasion and protecting consumers, which are pursued by legislation such as that at issue in the main proceedings. Such an obligation would enable those authorities to check the qualification obtained, as the case may be through experience, by that service provider, or by the natural persons providing the service concerned for that service provider, in other Member States in the specific field of taxation in which that service provider intends to exercise its activity (see, by analogy, judgment in Essent Energie Productie, C-91-13, EU:C:2014:2206, paragraphs 57 and 58 and the case-law cited).

57 However, as can be seen from paragraph 28 of this judgment, the provision which would enable, according to the tax office and the Federal Republic of Germany, such recognition and such taking into account, namely Paragraph 3a of the Law on Tax Consultancy, is, according to the information supplied by the referring court, not applicable to such a provision of services.

58 Moreover, in circumstances such as those at issue in the main proceedings, the authorities of a Member State could not, in any event, validly invoke against a service provider, such as X, any failure to comply with the rules laid down by a provision, such as Paragraph 3a of the Law on Tax Consultancy, since the detailed rules for the application of that provision with regard to it were not clear.

59 The principle of legal certainty requires, inter alia, that rules of law be clear, precise and predictable in their effects, especially where they may have negative consequences on individuals and undertakings (see judgment in Berlington Hungary and Others, C-98-14, EU:C:2015:386, paragraph 77 and the case-law cited).

60 Consequently, the answer to the third question is that, on a proper construction of Article 56 TFEU, legislation of a Member State which defines the conditions of access to the activity of professional assistance in tax matters may not restrict the freedom to provide services of a tax consultancy company - formed in accordance with the law of another Member State in which that company is established, which draws up, in the latter Member State where tax consultancy work is not regulated, a tax return on behalf of a recipient of services in the first Member State and sends that tax return to the tax authority of the first Member State -, without the qualification obtained by that company, or by the natural persons providing services of professional assistance in tax matters for that company, in other Member States being accorded its proper value and being duly taken into account.

Costs

61 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, THE COURT (Fourth Chamber) hereby rules: On a proper construction of Article 56 TFEU, legislation of a Member State which defines the conditions of access to the activity of professional assistance in tax matters may not restrict the freedom to provide services of a tax consultancy company - formed in accordance with the law of another Member State in which that company is established, which draws up, in the latter Member State where tax consultancy work is not regulated, a tax return on behalf of a recipient of services in the first Member State and sends that tax return to the tax authority of the first Member State -, without the qualification obtained by that company, or by the natural persons providing services of professional assistance in tax matters for that company, in other Member States being accorded its proper value and being duly taken into account.