On Tuesday 16 May, the Court of Justice of the EU ruled (case C-682/15) that a court in one member state may check the legality and relevance of a request for tax information issued by the administration of another member state. To this end, it must be able to check that there are sufficient grounds for this request and that it relates to information that is “foreseeably relevant” to the tax investigation on the grounds of which it was requested. In so doing, the Court broadly went along with the conclusions returned in January of this year by Advocate General Melchior Wathelet (see EUROPE 11700).
In the main proceedings, in the framework of an investigation into the French company Cofima, the French tax authorities asked its Luxembourg counterpart for information on Berlioz Investment Fund, the Luxembourg parent company of Cofima, in application of the directive on administrative cooperation in taxation matters (2011/16/EU). Berlioz submitted all the information to the Luxembourg tax authorities apart from the names and addresses of its associates and amount of capital held by each associate, arguing that this information was not relevant to the French tax authority’s investigation. Having refused to comply with the information order, the company was handed a fine that was reduced by 40% at first instance, although the court refused to cancel the requested exchange of information and the order itself, under Luxembourg law. Berlioz appealed to the Administrative Court of Luxembourg, invoking the violation of its right to an effective judicial remedy under the Charter of Fundamental Rights of the EU. On this basis, the Luxembourg court asked the Court of Justice whether it could examine the validity of the information order and therefore of the French request for information on which that order was based.
In its judgment, the Court of Justice found that the Charter of Fundamental Rights is applicable since, by fining Berlioz, the Luxembourg authorities implemented the EU directive on administrative cooperation. Furthermore, the Court finds that in this case, in order to ensure the right to an effective legal remedy, the Luxembourg courts must be able to examine the legality of the information order. It must therefore ensure that the information requested on the basis of this order is, as the directive stipulates, “foreseeably relevant” for the purposes of the French investigation. The judges state that the tax authorities are not at liberty to engage in “fishing expeditions” or to request information that is unlikely to be relevant to the tax affairs of the taxpayer concerned. On the contrary, there must be sufficient grounds for the request for information, in other words there must be a link between the information requested, the taxpayer concerned (Cofima), the third party required to provide information (Berlioz) and the taxation purpose pursued.
The Court also states that in order to be able to conduct a judicial review, the judge must have access to the request for information and all additional information that the authorities of the requesting state (France) may have given the requested state (Luxembourg). However, the person to whom the order is addressed (Berlioz, in this case) does not have a right of access to all of the request for information, which remains a secret document, but must be able to access the key information (the identity of the taxpayer concerned and the tax purpose for which the information is sought), and the court may provide it with other information if it considers that the key information is not sufficient. (Original version in French by Francesco Gariazzo)