Case C-174/02

Streekgewest Westelijk Noord-Brabant

v

Staatssecretaris van Financiën

(Reference for a preliminary ruling from the Hoge Raad der Nederlanden)

(State aid – Article 93(3) of the EC Treaty (now Article 88(3) EC) – Planned aid – Prohibition on the implementation of planned measures before the Commission’s final decision – Scope of the prohibition if the aid consists of an exemption from a tax – Persons who may rely on an infringement)

Opinion of Advocate General Geelhoed delivered on 4 March 2004

Judgment of the Court (First Chamber), 13 January 2005

Summary of the Judgment

1. State aid – Planned aid – Prohibition on implementation before the Commission’s final decision – Direct effect – Persons who may rely on an infringement – Individual subject to a tax which is an integral part of an aid measure

(EC Treaty, Art. 93(3) (now Art. 88(3), EC))

2. State aid – Provisions of the Treaty – Scope – Taxes coupled with exemptions regarded as aid – Included – Condition – Hypothecation

(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC) and Art. 93 (now Art. 88 EC))

1. An individual may have an interest in relying before the national court on the direct effect of the prohibition on implementation referred to in the last sentence of Article 93(3) of the Treaty (now, Article 88(3) EC), not only in order to erase the negative effects of the distortion of competition created by the grant of unlawful aid, but also in order to obtain a refund of a tax levied in breach of that provision. In the latter case, the question whether an individual has been affected by the distortion of competition arising from the aid measure is irrelevant to the assessment of his interest in bringing proceedings. The only fact to be taken into consideration is that the individual is subject to a tax which is an integral part of a measure implemented in breach of the prohibition referred to in the last sentence of Article 93(3) of the Treaty.

(see para. 19)

2. Taxes do not fall within the scope of the provisions of the Treaty concerning State aid unless they constitute the method of financing an aid measure, so that they form an integral part of that measure.

For a tax, or part of a tax, to be regarded as forming an integral part of an aid measure, it must be hypothecated to the aid measure under the relevant national rules, in the sense that the revenue from the tax is necessarily allocated for the financing of the aid. In the event of such hypothecation, the revenue from the tax has a direct impact on the amount of the aid and, consequently, on the assessment of its compatibility with the common market.

The fact that the aid is granted in the form of a tax exemption or that the loss of revenue due to that exemption is, for the purposes of the budget estimates of the Member State, offset by an increase in the tax is not in itself sufficient to amount to such hypothecation.

(see paras 25-26, 29, operative part)

JUDGMENT OF THE COURT (First Chamber) 13 January 2005 (1)

(State aid – Article 93(3) of the EC Treaty (now Article 88(3) EC) – Planned aid – Prohibition on the implementation of planned measures before the Commission's final decision – Scope of the prohibition if the aid consists of an exemption from a tax – Persons who may rely on an infringement)

In Case C-174/02,

REFERENCE for a preliminary ruling under Article 234 EC from the Hoge Raad der Nederlanden (Netherlands), made by decision of 8 March 2002, received at the Court on 13 May 2002, in the proceedings

v

THE COURT (First Chamber),,

composed of P. Jann, President of the Chamber, A. Rosas, K. Lenaerts, S. von Bahr and K. Schiemann (Rapporteur), Judges,

Advocate General: L.A. Geelhoed,

having regard to the written procedure and further to the hearing on

after hearing the Opinion of the Advocate General at the sitting on 4 March 2004,

gives the following

‘The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the common market having regard to Article 92, it shall without delay initiate the procedure provided for in paragraph 2. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.’

On those grounds, the Court (First Chamber) rules as follows:

[Signatures]