EU Law Weekly, 16 May 2012, No 15/2012 RECENT DEVELOPMENTS IN EU LAW
EU Law Weekly
By Adam Lazowski [SMEI3]
email: adam.lazowski@smei3.com
Dear Readers,
This was a very busy week at the Court of
Justice. A selection of judgments and opinions
of advocates general is reported here for you.
Furthermore, the European Commission has
published a number of interesting proposals
and reports. As always we hope you will find it
useful.
SMEI3 team
**********************************
1 – free movement of goods
n/a
2 – freedom of movement of persons
Last week the Court of Justice rendered a
judgment in an interesting case C-39/10
Commission v. Estonia. It touches upon the
relationship between the free movement of
persons and domestic taxation. The factual
and legal background of the case is as follows.
A person of Estonian nationality residing in
Finland made a complaint to the Commission
concerning the calculation of income tax
applied in Estonia to the retirement pension
paid to that person in that Member State. The
complainant challenged the refusal of the
Estonian authorities to apply the tax
allowance threshold and the supplementary
tax allowance threshold laid down by the Law
on income tax for taxpayers resident in
Estonia.
1
The complainant after reaching retirement
age in Estonia, moved to Finland, and worked
and acquired the right to a pension there. The
complainant thus receives two retirement
pensions, one in Estonia and one in Finland, of
almost the same amount. The pension
received in Estonia is subject to income tax,
whereas in Finland, on account of the very
low level of the complainant’s total income,
there is no liability to tax. The aggregate
amount of the two pensions, moreover, is only
slightly above the allowance threshold laid
down in the Estonian law. The European
Commission claimed that under Estonian law
the tax burden on non-residents in a similar
situation to that of the complainant is greater
than it would be if they received all their
income in Estonia alone. The Court of Justice
emphasised that direct taxation remains
within the competence of the Member States,
however this competence has to be exercised
consistently with EU law, including Article 45
TFEU (on free movement of workers). If a
Member State does not grant to a non-
resident certain tax advantages which it
grants to a resident is not, as a rule,
discriminatory, having regard to the objective
dif ferences between the situations of
residents and non-residents from the point of
view both of the source of their income and of
their personal ability to pay tax or their
EU LAW WEEKLY, 16 May 2012 (No 15/2012)
personal and family circumstances. This was
not the case here and the Court of Justice
ruled that Estonia is in breach of Article 45
TFEU and, at the same time, Article 28 of the
EEA Agreement. The latter provides for free
movement of workers between the EU and
EEA-EFTA countries (Iceland, Norway and
Liechtenstein). You can find the opinion of
advocate general here: http://curia.europa.eu/
juris/document/document.jsf?
text=&docid=115201&pageIndex=0&doclang=
EN&mode=lst&dir=&occ=first&part=1&cid=10
81470 and the judgment of the Court here:
http://curia.europa.eu/juris/document/
d o c u m e n t . j s f ?
text=&docid=122643&pageIndex=0&doclang=
EN&mode=lst&dir=&occ=first&part=1&cid=10
81470
3 – right of establishment & free movement
of services
The Court of Justice rendered a judgment in
joined cases Duomo Gpa Srl (C‑357/10),
Gestione Servizi Pubblici Srl (C‑358/10), Irtel
Srl (C‑359/10) v. Comune di Baranzate
(C‑357/10 and C‑358/10), Comune di
Ve n e g o n o I n f e r i o r e ( C ‑ 3 5 9 / 10 ) . T h e
references for preliminary ruling dealt with
several provisions of FEU Treaty and of
Articles 15 and 16 of Directive 2006/123/EC
(on services in the internal market). All cases
concerned exclusion of applicants from tender
procedures for a service concession for the
administration, assessment and collection of
certain taxes and local revenue for a period of
five years. The Italian law at stake provided
that:
-the award of such contracts to persons who
fail to satisfy the minimum financial
requirement of fully paid-up share capital in
the sum of EUR 10 million is to be null and
void;
–  persons entered in the relevant register of
private persons authorised to carry out
activities relating to the assessment,
verification and collection of taxes and other
revenue of the provinces and municipalities
are required to bring their share capital up to
the minimum figure in question;
–  it is prohibited to acquire new contracts or
participate in tender procedures for the
operation of services relating to the
assessment, verification and collection of
taxes and other local authority revenue until
2
the abovementioned requirement to adjust
share capital are met.
The Court of Justice held that such provisions
were precluded by Articles 49 and 56 TFEU
(right of establishment and free movement of
services). You can read the judgment here:
http://curia.europa.eu/juris/document/
d o c u m e n t . j s f ?
text=&docid=122642&pageIndex=0&doclang=
en&mode=lst&dir=&occ=first&part=1&cid=10
83163
4 – free movement of capital
n/a
5 – public procurement
The Court of Justice rendered an interesting
public procurement judgment (case C-368/10
Commission v. the Netherlands). The
applicant claimed that a tendering procedure
for a public contract for the supply and
management of automatic coffee machines
organised in the province of North Holland
was conducted in breach of Directive
2004/18/EC. Allegedly this was because the
contracting authority:
–  inserted in the technical specifications a
condition requiring the Max Havelaar and
EKO labels or in any event labels based on
similar or the same criteria;
– included, for appraising the ability of
operators, criteria and evidence concerning
sustainable purchasing and socially
responsible business, and
– included, when formulating award criteria, a
reference to the Max Havelaar and/or EKO
labels, or in any event labels based on the
same criteria.
The Court of Justice generally agreed with the
European Commission and held that the
Netherlands was in breach of several
provisions of the Directive in question. This
judgment should remain on the radars of the
Albanian authorities as it tells us a lot about
the interpretation of the Directive and the
way it should be applied in practice (via
domestic implementing law). You can read the
opinion of advocate general here: http://
curia.europa.eu/juris/document/
d o c u m e n t . j s f ?
docid=116726&mode=lst&pageIndex=1&dir=
&occ=first&part=1&text=&doclang=EN&cid=1
082350 and the judgment here: http://
curia.europa.eu/juris/document/
d o c u m e n t . j s f ?
EU LAW WEEKLY, 16 May 2012 (No 15/2012)

docid=122644&mode=lst&pageIndex=1&dir= n/a
&occ=first&part=1&text=&doclang=EN&cid=1 24 – justice, freedom and security
082350 n/a
6. company law 25 – science and research
n/a n/a
7 – intellectual property rights 26 – education and culture
n/a n/a
8 – competition policy 27 – environment
n/a n/a
9 – financial services 28 – consumer and health protection
n/a n/a
10 – information society and media 29 – customs union
n/a n/a
11 – agriculture and rural development 30 – external relations
n/a The European Commission and the High
12 – food safety, vet. & phytosanitary policy Representative of the European Union for
n/a Foreign Affairs and Security Policy presented
13 – fisheries a package of policy documents on the
n/a European Neighbourhood Policy. The main
14 – transport policy document is called “Delivering on a new
n/a European Neighbourhood Policy”. You can
15 – energy access the text here: http://ec.europa.eu/
n/a w o r l d / e n p / d o c s / 2 01 2 _ e n p _ p a c k /
16 – taxation delivering_new_enp_en.pdf Furthermore the
Council of the European Union has adopted Regional Report on the Eastern Partnership
Conclusions on the future of VAT legislation. was published. You can access it here: http://
This may pave the way for future proposals ec.europa.eu/world/enp/docs/2012_enp_pack/
for secondary legislation, which formally have e_pship_regional_report_en.pdf The next
to come from the European Commission. You document is called Partnership for Democracy
can read the Conclusions here: http:// and Shared Prosperity: Report on activities in
www.consilium.europa.eu//uedocs/cms_data/ 2011 and Roadmap for future action. You can
docs/pressdata/en/ecofin/130257.pdf access it here: http://ec.europa.eu/world/enp/
Furthermore the European Commission d o c s / 2 0 1 2 _ e n p _ p a c k /
published a Proposal for Council Directive pship_democracy_report_roadmap_en.pdf All
amending Directive 2006/112/EC on the country reports are available here http://
common system of value added tax, as ec.europa.eu/world/enp/documents_en.htm
regards the treatment of vouchers. You can Another development which merits attention
access it here: http://eur-lex.europa.eu/ is signature of a Partnership and Cooperation
L e x U r i S e r v / L e x U r i S e r v. d o ? u r i = C O M : Agreement between the European Union and
2012:0206:FIN:EN:PDF Iran. The press release is available here:
17 – economic and monetary policy http://www.consilium.europa.eu//uedocs/
n/a cms_data/docs/pressdata/EN/foraff/
18 – statistics 130147.pdf As soon as the text is published in
n/a the Official Journal it will be duly reported for
19 – social policy and employment you.
n/a 31 – foreign, security and defence policy
20 – enterprise and industrial policy n/a
n/a 32 – financial control
21 – Trans-European networks n/a
n/a 33 – financial and budgetary provisions
22 – regional policy & coordination of n/a
structural instruments 34 – institutions
n/a n/a
23 – judiciary and fundamental rights 35 – other issues