Limitation of Temporal Effects of CJEU Judgments - Mission Impossible for Governments of EU Member States

WU International Taxation Research Paper Series No. 2013 - 06

This paper was published in: P. Popelier, S. Verstraelen, D. Vanheule and B. Vanlerberghe (eds.), The Effects of Judical Decisions in Time, Ius Commune Europaeum series Volume 120, Intersentia, Antwerp – Cambridge, 2014

25 Pages Posted: 2 Dec 2013

See all articles by Michael Lang

Michael Lang

Vienna University of Economics and Business

Date Written: November 2013

Abstract

CJEU judgments usually have automatic retroactive effect. However, the CJEU seems to be aware that this approach may have far-reaching consequences in some situations and may sometimes lead to negative effects. As early as 1976, the CJEU decided for the first time to limit the temporal effects of one of its judgments. As there is no explicit legal basis at all in the EC Treaty for the CJEU to limit the temporal effects of one of its judgments under the rule which is today Art. 267 TFEU, the Court itself had to develop the criteria under which it is willing do so. The Court made it clear right from the beginning of this case law in 1976 that it was only willing to limit the effects of a judgment in exceptional cases.

The general approach of the CJEU in respect of the temporal effects of its judgments is understandable from a policy point of view: The Court wants to make sure that its judgments have retroactive effect as a matter of principle. However, at the same time it is understandable that the CJEU wants to leave the door open in order to limit these effects, if necessary. The CJEU sees a need for an “emergency brake”. But, it is questionable whether the criteria developed by the Court in order to maintain this possibility really fit. The case Meilicke has further complicated the rules of the game for the Member States. Governments have to request this limitation in the appropriate case. Appropriateness depends on the level of abstraction and it is impossible for the governments to foresee which case the CJEU will retrospectively consider to be the relevant one. A government will only be successful with its request for a limitation of the temporal effects in a case stemming from another Member State if it can convince the Court that its own tax system infringes Union law and that a judgment will lead to serious economic repercussions for its country. If the CJEU in Meilicke has really developed its case law further in the direction that temporal effects of judgment can be limited only for all or for no Member State, requesting a limitation of these effects becomes even more challenging for governments and the consequences arbitrary.

For all these reasons the Court would be well advised, on the one hand, to maintain its case law according to which only in exceptional cases judgments do not have retroactive effect and, on the other hand, to develop more transparent and operational criteria under which it is willing to distinguish between the rule and the exception.

Suggested Citation

Lang, Michael, Limitation of Temporal Effects of CJEU Judgments - Mission Impossible for Governments of EU Member States (November 2013). WU International Taxation Research Paper Series No. 2013 - 06, This paper was published in: P. Popelier, S. Verstraelen, D. Vanheule and B. Vanlerberghe (eds.), The Effects of Judical Decisions in Time, Ius Commune Europaeum series Volume 120, Intersentia, Antwerp – Cambridge, 2014, Available at SSRN: https://ssrn.com/abstract=2357946 or http://dx.doi.org/10.2139/ssrn.2357946

Michael Lang (Contact Author)

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

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