The Court of Justice of the European Union made the judgment in relation to the case Google Ireland Limited v Nemzeti Adó- és Vámhivatal Kiemelt Adó- és Vámigazgatósága.
The request for a preliminary ruling concerns the interpretation of Articles 18 and 56 TFEU and of Articles 41 and 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’). It has been made in proceedings between Google Ireland Limited, a company established in Ireland, and the Nemzeti Adó- és Vámhivatal Kiemelt Adó- és Vámigazgatósága (National Tax and Customs Authority, Hungary; ‘the tax authority’) concerning decisions by which that authority imposed a series of fines on that company for having infringed the obligation to submit a tax declaration of persons exercising an activity subject to the tax on advertisements laid down in Hungarian legislation.
The Court (Grand Chamber) ruled:
1. Article 56 TFEU must be interpreted as not precluding legislation of a Member State which imposes an obligation to submit a tax declaration on suppliers of advertising services established in another Member State for the purposes of their liability to a tax on advertising, whereas suppliers of such services established in the Member State where the tax is levied are exempt from that obligation on the ground that they are subject to obligations to submit a tax declaration or to register on the basis of liability to all other taxes applicable in that Member State.
2. Article 56 TFEU must be interpreted as precluding legislation of a Member State which fines suppliers of services established in another Member State for non-compliance with the obligation to submit a tax declaration for the purposes of their liability to a tax on advertising in a series of fines issued within several days, the amount of which, from the second day, is tripled in relation to the amount of the previous fine if it is still found that that obligation has not been complied with, leading to a total amount of several million euros, without the competent authority giving those suppliers of services the time necessary to comply with their obligations or the opportunity to submit their observations, or having itself examined the seriousness of the infringement, before adopting the final decision fixing the total amount of those fines, whereas the amount of the fine which suppliers of services established in the Member State where the tax is levied who fail to comply with a similar obligation to submit a tax declaration or to register contrary to the general provisions of national tax legislation is significantly less and is not increased, in the event of continued failure to comply with such an obligation, in the same proportions, nor necessarily within such a short period of time.
