Posts Tagged Kokott AG
Postscript 2 October 2014: the AG opined along similar lines in Q, with respect to a question also referred by the hoge Raad, as follows: ‘Does the importance of the conservation of national natural heritage and cultural heritage, as addressed in the Natuurschoonwet 1928 (Law on nature protection 1928), constitute an overriding reason in the public interest which justifies a scheme whereby the application of an exemption from gift tax (recovery facility) is limited to estates situated in the Netherlands?’
In X, Case C-87/13, the Hoge Raad of the Netherlands asked in essence whether EU law, in particular the rules on freedom of establishment and on free movement of capital, preclude[s] a resident of Belgium who, at his request, is taxed in the Netherlands as a resident and who has incurred costs in respect of a castle, used by him as his own home, which is located in Belgium and is designated there as a legally protected monument and village conservation area, from deducting those costs in the Netherlands for income tax purposes on the grounds that the castle is not registered as a protected monument in the Netherlands?
Kokott AG opined on 4 September last (the Opinion at the time of writing was not yet available in English) and suggested The Netherlands should be allowed to go ahead with such distinction. She focussed her opinion on the free movement of establishment, suggesting the same analysis applies mutatis mutandis for free movement of capital.
A summary of the Court of Justice’s case-law on the main exceptions to the free movement of capital (and, also per Kokott AG, similarly applicable to free movement of establishment), may be found in par. 42 of Jaeger, Case C-256/06:
According to the case-law, in order for national tax legislation such as that at issue in the main proceedings, which, for the purposes of calculating inheritance tax, distinguishes between assets situated in another Member State and those situated in Germany, to be considered compatible with the provisions of the Treaty on the free movement of capital, the difference in treatment must concern situations which are not objectively comparable or be justified by overriding reasons in the general interest.
The Advocate General suggested the Court find the two situations objectively comparable, given that listed property in both countries is likely to be subject to various restrictions. Simply quoting budgetary reasons for limiting the possibility of tax offset to assets in the State of taxation is not enough under EU law. However she did find merit in the argument that the limitation to listed property in The Netherlands, is in the general interest: in contrast with other cases (e.g. Petersen C-544/11), the general interest identified by the Member State concerned, cannot be met by market participants in other Member States (at 41): allowing set-off for maintenance of listed property in another Member State, does not serve the goal of preserving Dutch national heritage, a relevant interest illustrated eg. by the references to national heritage in Articles 36 and 167 TFEU.
If adopted by the Court, the AG’s Opinion in my view would be very welcome. The EC have been using an extensive interpretation of the free movement of capital essentially to skate around its limited progress in tax harmonisation (which is subject to national veto).
I reported earlier on Kokott AG’s view in Cascina tre Pini re the declassification of sites under the habitat Directive. The Court agreed, albeit with emphasis on the more than just passing degradation of the site: ‘It must, however, be pointed out that a mere allegation of environmental degradation of an SCI, made by the owner of land included in that site, cannot suffice of itself to bring about such an adaptation of the list of SCIs. It is essential that that degradation should make the site irretrievably unsuitable to ensure the conservation of natural habitats and of the wild fauna and flora or the setting up of the Natura 2000 network, so that that site can definitively no longer contribute to the achievement of the objectives of the directive set out in Articles 2 and 3 thereof.‘ (at 30). ‘Thus, not all degradation of a site on the list of SCIs justifies its declassification.‘ (at 31)
The judgment makes common sense to owners (and in view of the right to property), as it emphasises authorities’ duties under the habitats Directive however it is good to read it in ECJ print.
Declassification of sites under the Habitats Directive – Kokott AG resorts to Nemo Auditur in Cascina Tre Pini
In Cascina Tre Pini, Case C-301/12, Kokott AG opined on 20 June last. The case concerns the possibility of declassification of a site as a special area of conservation, and the rights of owners of the site concerned in same. Classification as a special area of conservation evidently brings with it a variety of restrictions on the use of the land. Owners’ interest in declassification therefore may understandably be very high.
The fourth sentence of Article 4(1) of the Habitats Directive provides that ‘Where appropriate, Member States shall propose adaptation of the list in the light of the results of the surveillance referred to in Article 11.’ Article 9 of the Habitats Directive refers to the possibility of withdrawing the protected status of certain areas: ‘The Commission, acting in accordance with the procedure laid down in Article 21, shall periodically review the contribution of Natura 2000 towards achievement of the objectives set out in Article 2 and 3. In this context, a special area of conservation may be considered for declassification where this is warranted by natural developments noted as a result of the surveillance provided for in Article 11.’
Although the AG does not use the expression, she effectively resorts to the nemo auditur principle: the Directive does not limit the reasons for declassification to loss of suitability due to to purely natural phenomena. However it would be inappropriate to reward a sloppy Member State, or one which purposely neglects a special area of conservation, with subsequent declassification of the site. Whence the AG suggests to answer one of the core questions of the preliminary review as follows (at 55):
pursuant to the fourth sentence of Article 4(1) of the Habitats Directive, the competent national authorities must consider, on a request from an owner of land which forms part of an SCI, whether it should be proposed to the Commission that that land should be excluded from the SCI, provided that the request is based on substantiated reasoning that, despite compliance with Article 6(2) to (4) of the directive, the land cannot make a contribution to the conservation of natural habitats and wild fauna and flora or to the setting up of the Natura 2000 network. (emphasis added: Article 6(2) to (4) lists the obligations of Member States vis-a-vis the areas).
The AG also suggests, in line with general principles of EU law, that owners of the land concerned must be given an opportunity to submit observations when Member States are considering whether to propose to the Commission that the list of SCIs should be adapted in respect of that land.