Court of Justice of the European Communities (including Court of First Instance Decisions)

Provisional text

JUDGMENT OF THE COURT (Third Chamber)

7 September 2023 (*)

(Reference for a preliminary ruling – Directive 2006/112/EC – Common system of value added tax (VAT) – Exemptions – Road carriage transactions directly connected with the import of goods – Rules of evidence – Articles 56 and 57 TFEU – Freedom to provide services – Recovery of VAT by a non-resident – Taxation of consideration paid by way of a tax on the income of non-resident persons – Tax withheld at source by a resident)

In Case C‑461/21,

REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunalul Prahova (Regional Court, Prahova, Romania), made by decision of 17 June 2021, received at the Court on 27 July 2021, in the proceedings

SC Cartrans Preda SRL

v

Direcţia Generală Regională a Finanţelor Publice Ploieşti – Administraţia Judeţeană a Finanţelor Publice Prahova,

THE COURT (Third Chamber),

composed of K. Jürimäe, President of the Chamber, M. Safjan, N. Piçarra, N. Jääskinen (Rapporteur) and M. Gavalec, Judges,

Advocate General: G. Pitruzzella,

Registrar: A. Lamote, Administrator,

having regard to the written procedure and further to the hearing on 10 November 2022,

after considering the observations submitted on behalf of:

–        SC Cartrans Preda SRL, by R. Popescu and C. Preda,

–        the Romanian Government, by E. Gane and A. Rotăreanu, acting as Agents,

–        the European Commission, by A. Armenia, T. Isacu de Groot and E.A. Stamate, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 19 January 2023,

gives the following

Judgment

1        This request for a preliminary ruling concerns the interpretation, first, of Article 144 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’), read in the light of Article 86(1)(b) and (2) of that directive, and, second, of Articles 56 and 57 TFEU.

2        The request has been made in proceedings between SC Cartrans Preda SRL (‘Cartrans’) and the Direcția Generală Regională a Finanțelor Publice Ploiești – Administrația Județeană a Finanțelor Publice Prahova (Regional Directorate-General of Public Finances of Ploiești – Regional Public Finance Administration of Prahova, Romania) (‘the tax authority’) concerning an obligation incumbent on Cartrans to pay, first, an additional amount of value added tax (VAT) in respect of services relating to the carriage of goods intended to be imported into Romania and, second, tax withheld at source on income paid by Cartrans to a non-resident co-contracting company for services for the recovery of VAT abroad.

 Legal context

 International law

 The CMR

3        Romania acceded to the Convention on the Contract for the International Carriage of Goods by Road, signed in Geneva on 19 May 1956, as amended by the protocol signed in Geneva on 5 July 1978 (‘the CMR’), by Decretul nr. 451/1972 privind aderarea României la Convenția referitoare la contractul de transport internațional de mărfuri pe șosele (CMR) (Decree No 451/1972 on the accession of Romania to the Convention on the Contract for the International Carriage of Goods by Road (CMR)) of 20 November 1972.

4        Article 4 of the CMR states:

‘The contract of carriage shall be confirmed by the making out of a consignment note. The absence, irregularity or loss of the consignment note shall not affect the existence or the validity of the contract of carriage which shall remain subject to the provisions of this Convention.’

5        Article 6(1) of the CMR provides:

‘The consignment note shall contain the following particulars:

(a)      The date of the consignment note and the place at which it is made out;

(b)      The name and address of the sender;

(c)      The name and address of the carrier;

(d)      The place and the date of taking over of the goods and the place designated for delivery;

(e)      The name and address of the consignee;

(f)      The description in common use of the nature of the goods and the method of packing, and, in the case of dangerous goods, their generally recognised description;

(g)      The number of packages and their special marks and numbers;

(h)      The gross weight of the goods or their quantity otherwise expressed;

(i)      Charges relating to the carriage (carriage charges, supplementary charges, customs duties and other charges incurred from the making of the contract to the time of delivery);

(j)      The requisite instructions for Customs and other formalities;

(k)      A statement that the carriage is subject, notwithstanding any clause to the contrary, to the provisions of this Convention.’

 The double taxation convention

6        Article 7(1) of the Convention for the avoidance of double taxation between Romania and Denmark, signed in Copenhagen on 13 December 1976 (‘the double taxation convention’), provides:

‘The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. …’

7        Article 12(1) to (3) of the convention provides as follows:

‘1.      Commission arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2.      However, such commission may be taxed in the Contracting State in which it arises, and according to the law of that State, but the tax so charged shall not exceed 4 per cent of the amount of the commission.

3.      The term “commission” as used in this Article means a payment made to a broker, a general commission agent or any other person assimilated to such a broker or agent by the taxation law of the Contracting State in which such payment arises.’

 European Union law

8        Under Article 85 of the VAT Directive:

‘In respect of the importation of goods, the taxable amount shall be the value for customs purposes, determined in accordance with the Community provisions in force.’

9        Article 86 of that directive provides:

‘1.      The taxable amount shall include the following factors, in so far as they are not already included:

(a)      taxes, duties, levies and other charges due outside the Member State of importation, and those due by reason of importation, excluding the VAT to be levied;

(b)      incidental expenses, such as commission, packing, transport and insurance costs, incurred up to the first place of destination within the territory of the Member State of importation as well as those resulting from transport to another place of destination within the Community, if that other place is known when the chargeable event occurs.

2.      For the purposes of point (b) of paragraph 1, “first place of destination” shall mean the place mentioned on the consignment note or on any other document under which the goods are imported into the Member State of importation. If no such mention is made, the first place of destination shall be deemed to be the place of the first transfer of cargo in the Member State of importation.’

10      Title IX of that directive is headed ‘Exemptions’ and comprises 10 chapters covering Articles 131 to 166. Article 131 of the directive reads as follows:

‘The exemptions provided for in Chapters 2 to 9 shall apply without prejudice to other Community provisions and in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse.’

11      Article 144 of the VAT Directive provides:

‘Member States shall exempt the supply of services relating to the importation of goods where the value of such services is included in the taxable amount in accordance with Article 86(1)(b).’

 Romanian law

12      Under Article 7 of Legea nr. 571/2003 privind Codul fiscal (Law No 571/2003 establishing the Tax Code) of 22 December 2003 (Monitorul Oficial al României, Part I, No 927 of 23 December 2003), which was in force until 31 March 2010 (‘Law No 571/2003’), headed ‘Definitions of common concepts’:

‘(1) For the purposes of this Code, … the following definitions shall apply:

…

9.      commission – any payment in cash or in kind made to a broker, a general commission agent or any person assimilated to such a broker or general commission agent, for brokerage services performed in connection with a commercial transaction;

…’

13      The wording of that provision was reproduced in point 9 of Article 7(1) of Legea nr. 227/2015 privind Codul fiscal (Law No 227/2015 establishing the Tax Code) of 8 September 2015 (Monitorul Oficial al României, Part I, No 688 of 10 September 2015; ‘Law No 227/2015’), which entered into force on 1 January 2016.

14      Under Article 113 of Law No 571/2003 and Article 221 of Law No 227/2015, headed ‘Taxable persons’ and drafted in identical terms:

‘Non-residents who receive taxable income from Romania shall be liable to pay tax in accordance with this Chapter and are hereinafter referred to as taxable persons.’

15      Article 115 of Law No 571/2003 and Article 223 of Law No 227/2015, headed ‘Taxable income from Romania’, are drafted in the following identical terms:

‘(1)      Taxable income from Romania, whether received in Romania or abroad, shall mean the following:

…

(f)      commission paid by a resident;

…’

16      Article 116 of Law No 571/2003, headed ‘Withholding of tax on taxable income from Romania obtained by non-residents’, which is reproduced in essence in Article 224 of Law No 227/2015, reads as follows:

‘(1)      The tax payable by non-residents on taxable income from Romania shall be calculated, withheld and paid into the State budget by the person paying the income.

(2)      The tax payable shall be calculated by applying the following rates to gross income:

…

(d)      16% for all other taxable income from Romania as listed in Article 115.

…’

17      Article 118 of Law No 571/2003, headed ‘Combined application of the provisions of the Tax Code and of the provisions of conventions for the avoidance of double taxation and of EU law’, which are reproduced in essence in Article 230 of Law No 227/2015, provides:

‘(1)      Within the meaning of Article 116, where a taxable person is resident in a country with which Romania has concluded a convention for the avoidance of double taxation, the tax rate applied to the taxable income from Romania obtained by that taxable person shall not exceed the tax rate provided for in the convention applicable to that income. Where national legislation or conventions for the avoidance of double taxation provide for different tax rates, the tax rates which apply shall be the most favourable ones. If a taxable person is resident in a country of the European Union, the tax rate applicable to the taxable income from Romania obtained by that taxable person shall be the most favourable rate provided for by national legislation, EU law or conventions for the avoidance of double taxation. …

(2)      For the purpose of applying provisions of conventions for the avoidance of double taxation and of EU law, a non-resident shall be obliged to present to the person paying the income, at the moment the payment is to be made, a tax residence certificate issued by the competent authority of his, her or its State of residence … When the tax residence certificate is presented …, the provisions of the conventions for the avoidance of double taxation or of EU law shall apply and the tax shall be adjusted within the statutory limitation period. …

(3)      In the event that tax is withheld in excess of the rates provided for by conventions for the avoidance of double taxation or by EU law, the amount of the excess tax withheld shall be refunded in accordance with the provisions of the Ordonanță Guvernului nr. 92/2003 privind Codul de procedură fiscală [(Government Order No 92/2003 establishing the Tax Procedure Code)]. …’

18      Article 5 of the Annex to Ordinul ministrului finanțelor publice nr. 103/2016 privind aprobarea instrucțiunilor de aplicare a scutirii de TVA pentru operațiunile prevăzute la articolul 294 alineatul (1) literele a)-i), articolul 294 alineatul (2) și articolul 296 din Legea nr. 227/2015 (Order of the Ministry of Public Finance No 103/2016 approving the instructions for the application of the VAT exemption for the transactions referred to in Articles 294(1)(a) to (i), 294(2) and 296 of Law No 227/2015) of 22 January 2016 provides as follows:

‘(1)      Under Article 294(1)(d) of the Tax Code, the supply of services, including carriage and services ancillary to carriage, which are directly linked to the importation of goods, shall be exempt from tax if their value is included in the taxable amount for imported goods in accordance with Article 289 of the Tax Code.

(2)      A service provider shall be deemed to have established an entitlement to the tax exemption provided for in Article 294(1)(d) of the Tax Code for services relating to the carriage of goods directly connected to the importation of goods where the services are regarded as being supplied in Romania, in accordance with Article 278 of the Tax Code, and if that provider is the person required to pay the tax, in accordance with Article 307(1) of the Tax Code, where no tax exemption has been applied.

The documents capable of establishing an entitlement to the tax exemption are the following:

(a)      the invoice, or, if necessary, for those persons who have actually carried out the carriage services, the specific document of carriage, if it contains at least the information referred to in Article 319(20) of the Tax Code;

(b)      the contract concluded with the recipient of the service;

(c)      the specific documents of carriage depending on the type of carriage, or, if necessary, copies of those documents;

(d)      the documents showing that the goods carried were imported into the European Union and that the value of the services is included in the taxable amount of the imported goods.

…’

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

19      Cartrans, a company established in Romania, provides services for the carriage of goods by road.

20      That company was the subject, from 18 November 2019 to 7 February 2020, of a tax inspection following which the tax authority issued, on 10 February 2020, a tax assessment requiring it to pay additional VAT in the amount of 1 529 Romanian lei (RON) (approximately EUR 311), corresponding to an invoice issued on 23 March 2016 relating to services for the carriage of goods by road which it provided to another company. The carriage concerned a journey between the port of Rotterdam (Netherlands), where the goods carried had entered the European Union, and Cluj-Napoca (Romania) (‘the carriage services at issue’). By the same tax assessment, the tax authority sought to recover the sum of RON 79 478 (approximately EUR 16 170), in the form of tax on the income of non-resident persons, in respect of sums paid by Cartrans to FDE Holding A/S, a non-resident Danish company, in consideration for the services which the latter had provided to it between 2012 and 2018.

21      As regards, in the first place, the additional VAT, the tax authority found that Cartrans had not submitted documents showing that the carriage services at issue were directly linked to the importation of the goods concerned and that the value of the services was included in the taxable amount of the imported goods. It therefore concluded that the entitlement to the VAT exemption to which those services had been subject had not been established.

22      As regards, in the second place, the tax on the income of non-resident persons, the tax authority considered that the sums paid by Cartrans to FDE Holding, in performance of a contract concluded on 3 November 2005 for the recovery from EU Member States of the VAT relating to the fuel purchased by Cartrans, constituted ‘commission’ within the meaning of Romanian law. It concluded that Cartrans was liable, on the basis of those sums paid to a non-resident person, for income tax which ought to have been withheld at source and that the rate of that tax was 4% of the commission paid, in accordance with the provisions of the double taxation convention.

23      Cartrans brought an action before the Tribunalul Prahova (Regional Court, Prahova, Romania), the referring court, seeking annulment of the tax assessment of 10 February 2020.

24      First, as regards the additional VAT, Cartrans submits that the tax authority erred in so far as it failed to grant it the VAT exemption for the carriage services at issue. It states that the costs of carrying the goods to the place of destination were mandatorily included by the customs authorities in the customs value of the goods when they entered the territory of the European Union and in the taxable amount for VAT purposes of the imported goods, in accordance with Article 86(1)(b) of the VAT Directive, since the ‘Cargo Movement Requirement’ consignment note (‘the CMR consignment note’) and the transit summary declaration, in respect of which it had been given a number known as the ‘master reference number’ (‘MRN’), made reference to the consignee of those goods as being located in Cluj-Napoca (Romania).

25      Cartrans therefore submits that the carriage services at issue which it supplied in the present case satisfy the conditions for the exemption provided for in Article 144 of the VAT Directive for the supply of services relating to the importation of goods.

26      Second, Cartrans submits, as regards the tax on the income of non-resident persons withheld at source, that the remuneration paid to FDE Holding is not commission within the meaning of Romanian law but consideration for supplies of services which could be taxed only in Denmark, pursuant to Article 7(1) of the double taxation convention. Cartrans states, in that regard, that FDE Holding submitted tax certificates showing that it had paid the statutory tax in Denmark on the amounts which it received.

27      Cartrans also observes that such services for the recovery of VAT paid abroad give rise to an obligation on the part of a Romanian resident to pay income tax withheld at source only where the contract for the supply of services is concluded with a non-resident and not where that contract is concluded with a resident. Thus, according to Cartrans, the Romanian legislation, which makes a cross-border transaction subject to less favourable treatment than the treatment that would apply to a transaction with the same object but carried out with a resident contractor, creates a difference in treatment which constitutes an obstacle to the freedom to provide services, within the meaning of Article 56 TFEU.

28      In those circumstances the Tribunalul Prahova (Regional Court, Prahova) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      For the purposes of granting a VAT exemption for transport operations and services relating to the importation of goods, in accordance with [the VAT Directive], are the provisions of Article 86(1)(b) and (2) to be interpreted as meaning that the recording of an import operation (for example, the raising of an entry summary declaration by the customs authority by means of the allocation of [an MRN]) always entails the inclusion, in the basis of calculation of the customs value, of the transport costs up to the first place of destination of the goods in the territory of the Member State of importation? Does the existence of an MRN, in relation to which there is no valid evidence of fraud, implicitly substantiate the fact that all the expenses provided for in Article 86(1)(a) and (b) [of that directive] have been included in the customs taxable basis?

(2)      Do the provisions of Articles 144 and 86(1)(b) and (2) of [the VAT Directive] preclude the Member State’s taxation practice by which the VAT exemption for transport services relating to the importation of goods into the [European Union] is refused on the ground that no strictly formal proof of the inclusion of transport costs in the customs value has been provided, even where, first, other relevant documents accompanying the import – the summary declaration and the CMR consignment note showing delivery to the recipient – have been produced and, second, there is no evidence to cast doubt on the authenticity and reliability of the summary declaration or CMR consignment note?

(3)      With reference to the provisions of Article 57 TFEU, does the recovery of VAT and excise duties from the tax authorities of more than one Member State constitute an intra-Community supply of services or the activity of a general commission agent acting as an intermediary in a commercial transaction?

(4)      Is Article 56 TFEU to be interpreted as meaning that there is a restriction on the free movement of services where the recipient of a service supplied by a service provider established in a different Member State is required, under the legislation of the Member State in which the recipient is established, to withhold tax on the remuneration due for the service supplied, while there is no such requirement where the same service is provided under a contract with a service provider established in the same Member State as that in which the recipient is established?

(5)      Is the tax treatment in the State in which the payer of the income is resident a factor which renders the freedom to provide services less attractive or more difficult where, in order to avoid the levying of a 4% withholding tax, the resident must confine itself to cooperation in the recovery of VAT and excise duties with entities which are also resident, to the exclusion of entities established in other Member States?

(6)      Can the fact that a tax of 4% (or 16% in some cases) of the gross amount is levied on the income received by a non-resident, while the corporation tax for a service provider resident in the same Member State is (if it makes a profit) levied at the rate of 16% of the net amount, also be regarded as an infringement of Article 56 TFEU, since it constitutes another factor which renders the freedom of non-residents to provide the services in question less attractive or more difficult?’

 Consideration of the questions referred

 The first question

29      As a preliminary point, the Court observes that, as is apparent from the explanations of the referring court referred to in paragraph 20 of the present judgment, the carriage of the imported goods at issue in the main proceedings concerned a journey between the Netherlands and Romania.

30      In those circumstances, the Court notes that, by its first question, the referring court asks the Court, in essence, whether Article 86(1)(b) and (2) and Article 144 of the VAT Directive must be interpreted as meaning that, in order to benefit from the VAT exemption provided for carriage services connected with the importation of goods, where the carriage of merchandise imported into the European Union is carried out by a taxable person between the Member State in whose territory the place where those goods are introduced into the European Union is situated and a place of destination in another Member State, recording the import transaction means, on that very same basis and systematically, that the costs of that carriage are included in the taxable amount for VAT purposes of the imported merchandise.

31      According to Article 144 of the VAT Directive, the Member States are required to exempt the supply of carriage services relating to the importation of goods where the value of such services is included in the taxable amount in accordance with Article 86(1)(b) of that directive. Thus, two conditions are expressly laid down for such a supply of carriage services to be exempt from VAT. First, that supply must be connected with the importation of the goods concerned and, second, the value of that supply must be included in the taxable amount for VAT purposes of the imported goods (see, to that effect, judgment of 4 October 2017, Federal Express Europe, C‑273/16, EU:C:2017:733, paragraphs 39 and 40).

32      As regards the taxable amount relating to the importation of goods, it is clear from Article 85 of the VAT Directive that that amount is formed by the value defined as the value for customs purposes of those goods by the provisions of EU law in force at the time. Article 86(1)(b) of that directive states that that taxable amount must, in so far as they are not already included, take account of incidental expenses, including the cost of transport to the first place of destination of the goods within the territory of the Member State of importation as well as those resulting from transport to another place of destination within the European Union, provided that the other place is known when the chargeable event occurs.

33      In the light of a combined reading of Articles 85 and 86 of the VAT Directive, from which it is apparent that those transport costs are not necessarily included in the value for customs purposes of imported goods, and if Article 86 is not to be deprived of its effectiveness, it cannot be held that the recording of an import transaction entails, on that very same basis and systematically, that the costs of that transport carried out by a taxable person between the Member State in whose territory the place where those goods are introduced into the European Union is situated and a place of destination in another Member State are included in the taxable amount for VAT purposes of the imported goods. If they are not already included in the value for customs purposes, which must first be verified, those costs must then be included in the taxable amount for VAT purposes of the imported goods, in accordance with the requirements of Article 86(1)(b) of the VAT Directive.

34      Consequently, recording an import transaction does not mean, on that very same basis and systematically, that the costs of carriage referred to in paragraph 30 of the present judgment are included in the taxable amount of the value for customs purposes. Furthermore, the existence of an MRN, in respect of which there is no valid evidence of fraud, does not show, even implicitly, that all the costs referred to in Article 86(1)(a) and (b) have been included in the taxable amount of the imported goods.

35      On the other hand, as regards documents, such as the CMR consignment note and the transit accompanying document at issue in the main proceedings – the second of which was drawn up on the basis of the transit declaration as checked by the customs authority – but also the invoice and the transport contract, they constitute evidence which the tax authorities must, in principle, take into account in order to determine whether there is a right to exemption from VAT for carriage services connected with the importation of goods, unless those authorities have precise reasons to doubt their authenticity or reliability (see, by analogy, judgment of 8 November 2018, Cartrans Spedition, C‑495/17, EU:C:2018:887, paragraph 67).

36      In the light of the reasoning set out above, the answer to the first question is that Article 86(1)(b) and (2) and Article 144 of the VAT Directive must be interpreted as meaning that, in order to benefit from the VAT exemption provided for carriage services connected with the importation of goods, where the carriage of merchandise imported into the European Union is carried out by a taxable person between the Member State in whose territory the place where those goods are introduced into the European Union is situated and a place of destination in another Member State, recording the import transaction does not mean, on that very same basis and systematically, that the costs of that carriage are included in the taxable amount for VAT purposes of the imported merchandise.

 The second question

37      By its second question, the referring court asks, in essence, whether Article 86(1)(b) and (2) and Article 144 of the VAT Directive must be interpreted as precluding a Member State’s tax practice of automatically refusing the exemption from VAT provided for carriage services connected with the importation of goods, on the ground that the person liable has not produced the specific documents required by national legislation, even though that person has produced other documents – there being no reason to doubt the authenticity and reliability of those documents – capable of establishing that the conditions for entitlement to exemption from VAT laid down in those provisions are satisfied.

38      It is apparent from the Court’s case-law that, in the absence of any provision in the VAT Directive as to the evidence that taxable persons are required to provide in order to be granted the exemption from VAT, it is for the Member States to lay down, in accordance with Article 131 of that directive, which is applicable to Article 144 of that directive as a provision falling under Chapter 5 of Title IX of that directive, the conditions in which import transactions will be exempt, with a view to ensuring the correct and straightforward application of those exemptions and of preventing possible evasion, avoidance or abuse. However, when they exercise their powers, Member States must observe the general principles of law which form part of the EU legal order, which include, in particular, the principles of legal certainty and proportionality (see, by analogy, judgment of 9 October 2014, Traum, C‑492/13, EU:C:2014:2267, paragraph 27 and the case-law cited).

39      According to the proportionality principle, a national measure goes further than is necessary to ensure the correct collection of the tax if, in essence, it makes the right of exemption from VAT subject to compliance with formal obligations, without any account being taken of the substantive conditions and, in particular, without it being necessary that any consideration be given as to whether those requirements have been satisfied. Transactions should be taxed by taking into account their objective characteristics (judgment of 9 February 2017, Euro Tyre, C‑21/16, EU:C:2017:106, paragraph 34 and the case-law cited).

40      Where those substantive conditions are satisfied, the principle of fiscal neutrality additionally requires that an exemption from VAT be allowed even if the taxable person has failed to comply with some of the formal requirements (see, to that effect, judgment of 9 February 2017, Euro Tyre, C‑21/16, EU:C:2017:106, paragraph 36 and the case-law cited).

41      There are only two situations in which the failure to meet a formal requirement may result in the loss of entitlement to an exemption from VAT (judgment of 9 February 2017, Euro Tyre, C‑21/16, EU:C:2017:106, paragraph 38 and the case-law cited).

42      In the first place, the principle of fiscal neutrality cannot be invoked for the purposes of an exemption from VAT by a taxable person who has intentionally participated in tax evasion which has jeopardised the operation of the common system of VAT (judgment of 9 February 2017, Euro Tyre, C‑21/16, EU:C:2017:106, paragraph 39 and the case-law cited).

43      In the second place, non-compliance with a formal requirement may lead to the refusal of an exemption from VAT if that non-compliance would effectively prevent the production of conclusive evidence that the substantive requirements have been satisfied (judgment of 9 February 2017, Euro Tyre, C‑21/16, EU:C:2017:106, paragraph 42 and the case-law cited).

44      In that regard, and as was recalled in paragraph 31 of the present judgment, the supply of carriage services is exempt, under Article 144 of the VAT Directive, read in conjunction with Article 86(1)(b) of that directive, where, first, they relate to the importation of goods and, second, the value of that carriage is included in the taxable amount for VAT purposes of the imported goods. In order to benefit from the exemption, it is therefore for the provider to provide the competent tax authorities with evidence that the carriage transaction in question satisfies those two substantive conditions for exemption from VAT.

45      On the other hand, in the light of the case-law set out in paragraphs 38 to 40 of the present judgment, the granting of that exemption cannot be made subject to the mandatory condition that the provider produce, for the purposes of establishing that the conditions referred to in the preceding paragraph are satisfied, specific documents required by national legislation to the exclusion of any other evidence capable of shoring up the conviction of the competent tax authority (see, by analogy, judgment of 8 November 2018, Cartrans Spedition, C‑495/17, EU:C:2018:887, paragraph 49).

46      Insisting upon one such means of proof to the exclusion of any other would amount to making the right to an exemption subject to compliance with formal obligations, within the meaning of the case-law referred to in paragraphs 39 and 40 of the present judgment, without examining whether the substantive requirements laid down by EU law have in fact been satisfied or not.

47      Consequently, in order to ascertain whether, as regards a supply of carriage services, the substantive conditions to which the exemption provided for in Article 144 of the VAT Directive, read in conjunction with Article 86(1)(b) thereof, is subject are satisfied, the competent tax authorities must examine all the information available to them. By contrast, those authorities cannot deduce that this was not the case from the mere fact that the person liable is unable to produce one or more of the specific documents required by national legislation, such as the legislation at issue in the main proceedings (see, by analogy, judgment of 8 November 2018, Cartrans Spedition, C‑495/17, EU:C:2018:887, paragraph 52).

48      In that context, the tax authorities may require the taxable person himself, herself or itself to produce the evidence he, she or it considers necessary for determining whether he, she or it satisfies the conditions for that exemption (see, to that effect, judgment of 9 December 2021, Kemwater ProChemie, C‑154/20, EU:C:2021:989, paragraph 33 and the case-law cited).

49      In the present case, the file before the Court does not contain any indication that Cartrans intentionally participated in tax evasion or that, since that taxable person did not meet the formal requirement of producing certain specific documents laid down by national legislation, the competent authorities were prevented from determining whether the substantive conditions for the exemption are satisfied.

50      In those circumstances, it is for the tax authorities and the competent national courts to ascertain, on the basis of all the documents produced, including documents that were in the possession of the importer and produced by the service provider, whether the substantive conditions for granting the carriage services exemption were satisfied.

51      It is only if, having regard to the factual circumstances and despite the evidence supplied by the provider, the information necessary to check that the value of the services has been included in the taxable amount for VAT purposes of the imported goods is lacking, that the taxable person must be refused exemption from VAT.

52      Consequently, the answer to the second question is that Article 86(1)(b) and (2) and Article 144 of the VAT Directive must be interpreted as precluding a Member State’s tax practice of automatically refusing the exemption from VAT for carriage services connected with the importation of goods, on the ground that the person liable has not produced the specific documents required by national legislation, even though that person has produced other documents – there being no reason to doubt the authenticity and reliability of those documents – capable of establishing that the conditions for entitlement to exemption from VAT laid down in those provisions are satisfied.

 The third, fourth and fifth questions

53      By its third, fourth and fifth questions, which it is appropriate to examine together, the referring court asks, in essence, whether Articles 56 and 57 TFEU must be interpreted as meaning that, first, an activity consisting of recovering VAT and excise duties on behalf of an undertaking from the tax authorities of several Member States constitutes a supply of services and, second, that those provisions preclude legislation of a Member State which requires the recipient, established in that Member State, of a service performed by a provider established in another Member State to withhold at source the tax on the income received for the provision of those services, whereas no such obligation exists where that service is performed by a provider established in the same Member State as the recipient of the services.

54      In the first place, the Court notes that, under Article 57 TFEU, activities are to be classified as ‘services’ where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons (see, to that effect, judgment of 9 July 2020, RL (Directive combating late payment), C‑199/19, EU:C:2020:548, paragraph 31).

55      If follows that the FEU Treaty defines the concept of ‘service’ broadly, so as to include any supply which is not covered by the other fundamental freedoms, in order to ensure that all economic activity falls within the scope of the fundamental freedoms (see, to that effect, judgment of 9 July 2020, RL (Directive combating late payment), C‑199/19, EU:C:2020:548, paragraph 32 and the case-law cited).

56      In the present case, in the absence of any factor linking the circumstances of the dispute in the main proceedings to one of the other three freedoms of movement, it appears that, as the Advocate General observed in point 22 of his Opinion, the conclusion of a contract for consideration under which the principal service consists in the recovery of VAT and excise duties from the tax authorities of more than one Member State, such as that concluded between Cartrans and FDE Holding, involves the provision of a ‘service’, within the meaning of Article 57 TFEU.

57      That classification cannot be called into question by the fact that, in the present case, the sums paid by Cartrans to FDE Holding under that contract were classified by the Romanian tax authorities as ‘commission’ under Romanian law and the double taxation convention.

58      Since the sums paid by Cartrans constitute the economic consideration for the supply of services by FDE Holding, they must be regarded as remuneration for such a supply of services within the meaning of the case-law cited in paragraph 54 of the present judgment, irrespective of their classification under Romanian law or the double taxation convention.

59      Moreover, that conclusion is consistent, as the Advocate General points out in point 27 of his Opinion, with the case-law of the Court according to which, in the absence of unifying or harmonising measures for the elimination of double taxation at EU level, the Member States, within the scope of their power to determine the criteria for taxation on income and capital with a view to eliminating double taxation, where appropriate by means of conventions, are free to classify the consideration paid for the provision of services as they see fit, provided, however, that this is in keeping with the freedoms of movement guaranteed by the FEU Treaty (see, to that effect, judgment of 24 October 2018, Sauvage and Lejeune, C‑602/17, EU:C:2018:856, paragraphs 22 and 24 and the case-law cited).

60      In the second place, it is necessary to determine whether legislation of a Member State which requires a recipient of a supply of services to withhold at source income tax received by a service provider established in another Member State for services provided in different Member States, where no such obligation exists as regards remuneration paid to a service provider who is established in the same Member State as that recipient and provides equivalent services, constitutes a restriction on the freedom to provide services within the meaning of Article 56 TFEU.

61      In that regard, it should be recalled that, according to settled case-law, the Member States must exercise their competence in the field of direct taxation in compliance with EU law and, in particular, with the fundamental freedoms guaranteed by the TFEU (judgments of 25 July 2018, TTL, C‑553/16, EU:C:2018:604, paragraph 44, and of 27 April 2023, L Fund, C‑537/20, EU:C:2023:339, paragraph 41 and the case-law cited).

62      Article 56 TFEU precludes the application of any national rules which have the effect of making the provision of services between Member States more difficult than the provision of services purely within a Member State. In accordance with the Court’s case-law, Article 56 TFEU requires the abolition of any restriction on the freedom to provide services imposed on the ground that the person providing a service is established in a Member State other than that in which the service is provided (judgment of 25 July 2018, TTL, C‑553/16, EU:C:2018:604, paragraph 45 and the case-law cited).

63      Restrictions on the freedom to provide services are national measures which prohibit, impede or render less attractive the exercise of that freedom (judgment of 25 July 2018, TTL, C‑553/16, EU:C:2018:604, paragraph 46 and the case-law cited).

64      In the present case, it is apparent, in essence, from the explanations provided by the referring court that, where a service is supplied to a Romanian resident by a non-resident provider, Romanian legislation requires the recipient of that service to withhold at source, by way of tax on the income of non-residents, 16% of the gross income paid to that operator. Where that operator is a resident of Denmark, the rate of that withholding tax is, however, reduced to 4% pursuant to the provisions of the double taxation convention. On the other hand, where the same services are supplied by a resident provider, no withholding is to apply.

65      Thus, in the case in the main proceedings, Cartrans had to withhold tax at source on the remuneration paid to a non-resident provider, whereas it would not have been subject to such an obligation if it had chosen to use a resident provider.

66      While it is true that, as the Romanian Government submitted, in essence, in its written observations with reference to the judgment of 22 December 2008, Truck Center (C‑282/07, EU:C:2008:762), the Court has already accepted the application of different tax collection techniques to those deriving income from capital depending on whether they are resident or non-resident, that difference in treatment relates to situations which are not objectively comparable. As that difference in treatment does not, moreover, necessarily procure an advantage for resident recipients, the Court has ruled that it does not constitute a restriction of the freedom of establishment (judgment of 18 October 2012, X, C‑498/10, EU:C:2012:635, paragraph 26 and the case-law cited).

67      However, the Court has held that the provider and the recipient of the services are two distinct legal entities, each with its own interests and each entitled to claim the benefit of the freedom to provide services if their rights are infringed (judgment of 18 October 2012, X, C‑498/10, EU:C:2012:635, paragraph 27).

68      It follows that, as the Advocate General observed in point 37 of his Opinion, an obligation to withhold tax at source, such as the one described in paragraph 64 of the present judgment, inasmuch as it entails not only an additional administrative burden but also the risks concerning liability, may render cross-border services less attractive for resident recipients of services than services performed by providers that are also residents. Consequently, such an obligation is liable to deter those recipients from having recourse to non-resident service providers (see, to that effect, judgment of 18 October 2012, X, C‑498/10, EU:C:2012:635, paragraphs 28 and 32), and it must be classified as a restriction on the freedom to provide services within the meaning of the case-law referred to in paragraph 63 of the present judgment.

69      Such a restriction on the freedom to provide services is warranted only if it pursues a legitimate objective compatible with the FEU Treaty and is justified by overriding reasons in the public interest; if that is the case, it must be suitable for securing the attainment of the objective pursued and must not go beyond what is necessary in order to attain that objective (judgment of 27 October 2022, Instituto do Cinema e do Audiovisual, C‑411/21, EU:C:2022:836, paragraph 24 and the case-law cited).

70      In the present case, the Romanian Government submits, in essence, that the need to ensure the effective collection of tax constitutes an overriding reason in the public interest capable of justifying a possible restriction. Thus, the national legislation at issue in the main proceedings, which requires Romanian residents to withhold at source the income tax payable by non-residents, pursues an objective in the public interest consisting of ensuring the collection of that tax, since those residents are subject to supervision by the Romanian tax authorities and, in the absence of such legislation, the collection of that tax from non-residents could be ensured only with the assistance of the competent authorities of the other Member States in which those non-residents are established.

71      In that regard, the Court notes that, according to its case-law, the need to ensure the effective collection of tax constitutes an overriding reason of public interest capable of justifying a restriction on the freedom to provide services (see, to that effect, judgments of 3 October 2006, FKP Scorpio Konzertproduktionen, C‑290/04, EU:C:2006:630, paragraph 36, and of 13 July 2016, Brisal and KBC Finance Ireland, C‑18/15, EU:C:2016:549, paragraph 39).

72      Thus, the Court has held that the procedure of retention at source and the liability rules supporting it constitute a legitimate and appropriate means of ensuring the tax treatment of the income of a person established outside the State of taxation and ensuring that the income concerned does not escape taxation in the State of residence and the State where the services are provided (judgments of 3 October 2006, FKP Scorpio Konzertproduktionen, C‑290/04, EU:C:2006:630, paragraph 36, and of 18 October 2012, X, C‑498/10, EU:C:2012:635, paragraph 39).

73      The tax treatment of the income of a service provider established outside the State of taxation by means of a procedure where tax is withheld at source and the liability rules serving as a guarantee may, inter alia, prove to be legitimate and appropriate where that provider performs only occasional services in that State and where that provider remains only a short period of time (see, to that effect, judgment of 18 October 2012, X, C‑498/10, EU:C:2012:635, paragraph 42).

74      Lastly, the Court has also held that the collection of a tax directly from the non-resident service provider does not necessarily constitute a less severe means than the withholding at source of a tax. It took the view that withholding tax at source could be regarded as justified by the need to ensure the effective collection of tax (see, inter alia, judgment of 18 October 2012, X, C‑498/10, EU:C:2012:635, paragraphs 52 and 53).

75      It also follows that the imposition, on the recipient of the supply of services, of an administrative burden and liability as a result of the obligation to withhold at source remuneration paid to the non-resident service provider appears to be specific and necessary in order to ensure the effective collection of tax.

76      As regards the discussion, at the hearing, of whether there was a risk of double taxation, it should be added, as the Advocate General pointed out in point 53 of his Opinion, that since EU law, as it currently stands, does not lay down any general criteria for the attribution of areas of competence between the Member States in relation to the elimination of double taxation within the European Union, such double taxation is not necessarily precluded in all circumstances (see, to that effect, judgment of 25 February 2021, Société Générale, C‑403/19, EU:C:2021:136, paragraph 29 and the case-law cited).

77      It is for the referring court to examine, in the light of those factors, whether legislation such as that at issue in the main proceedings is able to respond to an overriding reason in the public interest capable of justifying a restriction on the freedom to provide services, whether it is appropriate for attaining such an objective, and whether it is proportionate in the light of that objective.

78      Consequently, the answer to the third, fourth and fifth questions is that Articles 56 and 57 TFEU must be interpreted as meaning that, first, an activity consisting of recovering VAT and excise duties from the tax authorities of several Member States constitutes a supply of services, within the meaning of those articles, and, second, that the application of withholding at source tax on income received for a supply of services by a non-resident service provider, whereas an equivalent supply made by a resident service provider would not be subject to such withholding, constitutes a restriction on the freedom to provide services. That restriction may be justified by the need to ensure the effective collection of tax, in so far as it is appropriate for attaining that objective and does not go beyond what is necessary in order to attain it.

 The sixth question

79      According to settled case-law, in the procedure laid down by Article 267 TFEU providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the national court with an answer which will be of use to it and enable it to decide the case before it. To that end, the Court should, where necessary, reformulate the questions referred to it (judgment of 15 July 2021, Ministrstvo za obrambo, C‑742/19, EU:C:2021:597, paragraph 31).

80      Thus, by its sixth question, the referring court must be regarded as asking, in essence, whether Article 56 TFEU must be interpreted as precluding national legislation under which, as a general rule, non-resident service providers are taxed at source on income received in the form of remuneration for services provided, without allowing them the possibility of deducting business expenses directly connected with those activities, whereas resident service providers do have the possibility to do so.

81      In that regard, it should be recalled that, in accordance with Article 56 TFEU, restrictions on the freedom to provide services within the European Union are prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended. As has been pointed out in paragraph 63 of the present judgment, national measures which prohibit, impede or render less attractive the exercise of the freedom to provide services constitute such restrictions.

82      Moreover, it follows from the Court’s settled case-law that a Member State which grants residents the opportunity to deduct business expenses from the calculation of taxable income may not, in principle, preclude the deduction of those same expenses for non-residents (judgments of 12 June 2003, Gerritse, C‑234/01, EU:C:2003:340, paragraph 29, and of 13 July 2016, Brisal and KBC Finance Ireland, C‑18/15, EU:C:2016:549, paragraph 44).

83      In the present case, it is apparent from the explanations provided by the referring court that, under Romanian law, the withholding at source which applies to taxable income from Romania and received by non-residents is calculated by applying the rate of 16% to gross income. Under the double taxation convention, however, that rate of 16% is reduced to 4% where the service provider is established in Denmark. By contrast, the corporation tax payable by resident service providers is 16% of the net amount of their income, with those service providers being entitled to deduct their business expenses from the taxable amount.

84      Thus, it appears that the withholding of tax at source at a rate of 16%, reduced, where appropriate, to 4%, applied to the gross income of non-resident service providers, is liable to place non-resident service providers at a disadvantage, within the meaning of the case-law cited in paragraph 63 of the present judgment, as compared with resident service providers. Unlike resident service providers, non-resident service providers are not authorised to deduct business expenses connected with the taxable supply from the amount of that supply.

85      In accordance with the case-law cited in paragraphs 63 of the present judgment, national legislation under which service providers that are resident in a Member State may deduct from the taxable amount of gross income received in return for a supply of services the business expenses connected with that provision, while non-resident service providers do not have the possibility to do so, constitutes a restriction on the freedom to provide services, within the meaning of Article 56 TFEU.

86      That conclusion is not called into question by the fact that a Danish service provider may, because the withholding at source of tax on gross income is only at a rate of 4% and despite it being impossible to deduct business expenses, pay lower income tax than the income tax paid by a resident service provider who, while able to deduct business expenses, has 16% of his, her or its net income taxed. The Court has repeatedly held that unfavourable tax treatment contrary to a fundamental freedom cannot be regarded as compatible with EU law because of the potential existence of other advantages (judgment of 13 July 2016, Brisal and KBC Finance Ireland, C‑18/15, EU:C:2016:549, paragraph 32 and the case-law cited).

87      It is for the referring court to ascertain, in accordance with the case-law cited in paragraph 69 of the present judgment, whether such a restriction on the freedom to provide services pursues a legitimate objective that is compatible with the FEU Treaty and is justified by overriding reasons in the public interest.

88      In that regard, the Romanian Government claims, in essence, in its observations, that it is because resident service providers are subject to binding tax procedure rules, which do not apply to non-resident service providers, that it is justifiable to allow resident service providers to deduct business expenses connected with the provision of services from their taxable income, whereas non-resident service providers do not have the possibility to do so.

89      In so doing, the Romanian Government does not, however, explain how such considerations may constitute a legitimate objective that is compatible with the FEU Treaty and which responds to overriding reasons in the public interest capable of justifying a restriction such as the one at issue in the present case.

90      In that regard, it must be borne in mind that it is for a Member State which claims to have a reason justifying a restriction on one of the fundamental freedoms guaranteed by that treaty to demonstrate specifically the existence of a reason relating to the public interest (judgment of 16 December 2021, Prefettura di Massa Carrara, C‑274/20, EU:C:2021:1022, paragraph 38 and the case-law cited).

91      Consequently, the answer to the sixth question is that Article 56 TFEU must be interpreted as precluding national legislation under which, as a general rule, non-resident service providers are taxed at source on income received in the form of remuneration for services provided, without allowing them the possibility of deducting business expenses directly connected with those activities, whereas resident service providers do have the possibility to do so, unless the restriction on the freedom to provide services which that legislation entails responds to a legitimate objective that is compatible with the FEU Treaty and is justified by overriding reasons in the public interest.

 Costs

92      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 (Third Chamber) hereby rules:

1.      Article 86(1)(b) and (2) and Article 144 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that, in order to benefit from the value added tax (VAT) exemption provided for carriage services connected with the importation of goods, where the carriage of merchandise imported into the European Union is carried out by a taxable person between the Member State in whose territory the place where those goods are introduced into the European Union is situated and a place of destination in another Member State, recording the import transaction does not mean, on that very same basis and systematically, that the costs of that carriage are included in the taxable amount for VAT purposes of the imported merchandise.

2.      Article 86(1)(b) and (2) and Article 144 of the Directive 2006/112 must be interpreted as precluding a Member State’s tax practice of automatically refusing the exemption from VAT for carriage services connected with the importation of goods, on the ground that the person liable has not produced the specific documents required by national legislation, even though that person has produced other documents – there being no reason to doubt the authenticity and reliability of those documents – capable of establishing that the conditions for entitlement to exemption from VAT laid down in those provisions are satisfied.

3.      Articles 56 and 57 TFEU must be interpreted as meaning that, first, an activity consisting of recovering VAT and excise duties from the tax authorities of several Member States constitutes a supply of services, within the meaning of those articles, and, second, that the application of withholding at source tax on income received for a supply of services by a non-resident service provider, whereas an equivalent supply made by a resident service provider would not be subject to such withholding, constitutes a restriction on the freedom to provide services. That restriction may be justified by the need to ensure the effective collection of tax, in so far as it is appropriate for attaining that objective and does not go beyond what is necessary in order to attain it.

4.      Article 56 TFEU must be interpreted as precluding national legislation under which, as a general rule, non-resident service providers are taxed at source on income received in the form of remuneration for services provided, without allowing them the possibility of deducting business expenses directly connected with those activities, whereas resident service providers do have the possibility to do so, unless the restriction on the freedom to provide services which that legislation entails responds to a legitimate objective that is compatible with the FEU Treaty and is justified by overriding reasons in the public interest.

[Signatures]

*      Language of the case: Romanian.

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