EU tax litigation

The Court of Justice of the European Union (CJEU) has exclusive jurisdiction to interpret the EU legislative acts, meaning EU treaties, directives and regulations, unless it is completely clear how they are to be interpreted. This is why the CLEU plays an important role in all tax cases where it has been questioned whether the Danish legal rule or its application complies with EU law.

No other Danish law firm has conducted as many tax cases before the Court of Justice of the European Union as Plesner. Our track record is unique. In December 2016, we won our tenth consecutive case.

The cases have resulted in amendments to both legislation and case law and they have also resulted in the repayment of billions to Danish businesses.

In May 2017, Plesner was nominated for the second time for the award "European Court of Justice Firm of the Year" which is given by the international magazine International Tax Review.

A different and complex procedure

The first part of a preliminary reference to the CJEU is to convince the Danish court that a reference is to be made, often against objections from the Ministry of Taxation. In seven of the above ten cases the Ministry of Taxation objected to a reference being made because the Ministry was of the opinion that the interpretation was completely clear (to the Ministry's advantage). Nevertheless, the taxpayers were successful before the CJEU.

The next part is to draft the order for reference, including the questions to the CJEU, on behalf of the Danish court.

The actual litigation before the CJEU follows special procedural rules that are very different from the Danish rules.

Also the EU legal system is very different from the Danish legal system. The same goes for the weighting of the sources of law and the arguments by the CJEU. In particular, the CJEU has developed a number of special principles of interpretation.

Conducting litigation before the CJEU therefore requires extensive experience in this special process and in-depth knowledge of EU law.

Our skills

Plesner has conducted tax litigation before the CJEU for many years.

The litigation has not only been about preliminary references to the Court of Justice of the European Union but also direct legal actions before the Court of First Instance. Plesner also assists with cases considered by the European Commission before a legal action before the CJEU becomes a reality.

A number of strategic choices must continuously be made in any EU case. The right advice about each one of such choices can be crucial for the final outcome of the case.

Plesner's documented experience and results provide the best basis for being successful in the case.

To read about our method and way of working, go to Tax Law

Highlights

  • The beneficial owner cases - a number of pending preliminary references about the parent-subsidiary directive and the interest-royalty directive in relation to Danish companies' withholding withholding tax on interest and dividends to parent companies in other Member States. Also questions about whether Denmark has violated the TEUF freedoms in a number of discrimination cases
  • Hoist Group - pending case about the interpretation of the Common Customs Tariff. The case, which is of great public importance, could result in EU law being in conflict with the international tariff conventions GATT and ITA
  • Masco Denmark/Damixa - successful before the Court of Justice of the European Union in a case of general public importance about whether Danish tax law on the taxation of intra-group interest is in conflict with the EU Treaty
  • Nordea - successful before the Court of Justice of the European Union (and the Danish Eastern High Court) in that the Danish rules on retaxation of foreign branches' losses are in conflict with the right of establishment
  • ATP PensionService and PensionDanmark - successful before the Court of Justice of the European Union (and the Danish Eastern High Court, settlement in court) in that pension funds can be investment funds and that the company's payments to the pension funds are exempt from VAT as administration of investment funds or as payments relating to payment transactions
  • Recombined Dairy System (the Fonterra group) - successful in a case against the European Commission before the Court of First Instance in that the company was entitled to customs remissions in connection with the import of dairy products
  • Danfoss A/S - successful before the Court of Justice of the European Union (and the Danish Western High Court) in that the company could raise a direct claim against the Danish tax authorities for the repayment of a tax contrary to the Directive that an oil supplier had levied and paid to the Danish tax authorities
  • Danfoss A/S - successful before the Court of Justice of the European Union (and the Danish Western High Court, settlement in court) in that the company may deduct costs relating to the provision of meals at meetings to employees and customers (canteen VAT)
  • ECCO - successful before the Court of Justice of the European Union (and the Danish Western High Court) in that the company had made the correct tariffing of footwear
  • Nordania Finans A/S - successful before the Court of Justice of the European Union (and the Danish Supreme Court) in that a leasing company could include the turnover from the sales of leased assets after the termination of the leasing agreements when calculating the pro rata VAT deduction
  • De Danske Bilimportører - successful before the Court of Justice of the European Union in that the Danish rules stipulating that the registration fee should be calculated based on the price of the car plus VAT were in conflict with the VAT Directive  
  • Danske Bank (as a non-party intervener) - successful before the Court of Justice of the European Union (and the Danish Western High Court) in that a leasing company (Jyske Finans) is entitled to apply the rules regarding VAT on used goods

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