Pascal Van Eycke v ASPA NV Case 267/86

Prohibited rules on competition applying to undertakings that suppose a limit to the freedom of establishment and free movement of services and capital

The principle of sincere cooperation between the Member States and the EU laid out by Article 4, paragraph 3, of the Treaty on the EU (TEU) prohibits a Member State from requiring or favouring the adoption of agreements, decisions or concerted practices contrary to Article [101 TFEU].

 

Article 101 TFEU (ex Article 85 EEC Treaty) that prohibits Member States encouragement of antitrust infringements, list all the prohibited agreements between undertakings, decisions by associations of projects and concerted practices that affect trade between the Member States and have as their object or effect the prevention, restriction or distortion of competition within the internal market. In particular, those which directly or indirectly fix purchase or selling prices or any other trading conditions, limit or control production, markets, technical development, or investment, share markets or sources of supply, or apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage, and make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

 

In this historical case law, the European Court of Justice clarified that the Member States were under the obligation not to introduce or maintain in force measures that may render ineffective competition rules applicable to undertakings by creating new infringements, reinforcing infringements or by delegating authority.

Case law summary

The Vredegerecht (Local Court) for the Canton of Beveren (Belgium) sent a reference for a preliminary ruling to the ECJ concerning the interpretation of Articles 59 to 66, 85, 86 and 95 of the EEC Treaty to enable it to assess the compatibility with Community law of national legislation restricting the benefit of a tax exemption on interest income to a specific category of savings deposits in proceedings between Pascal Van Eyck, residing in Beveren, and ASPA N. concerning the rate of interest payable on a savings deposit which the plaintiff intended to make with ASPA.

 

The Vredegerecht for the Canton Beveren (Belgium) referred to the Court of Justice the questions to clarify whether national legislation which restricts the benefit of an exemption from income tax in respect of interest on a specific category of savings deposits solely to deposits on which the interest rates and premiums paid do not exceed the maximum levels fixed by legislation is compatible with the obligations imposed on the Member States by Article 5 of the EEC Treaty in conjunction with Articles 3 (f) and 85 and whether national legislation which restricts the tax exemption described above solely to savings deposits denominated in national currency and holds at financial institutions whose registered office is in the Member State concerned is incompatible with Articles 59 to 66 and 95 of the EEC Treaty.

 

The ECJ ruled in response to the questions referred that national legislation which restricts the benefit of an exemption from income tax in respect of interest on a specific category of savings deposits solely to deposits on which the introductory interest rates and premiums paid do not exceed the maximum levels fixed by legislation is not incompatible with the obligations imposed on the Member States by Article 5 of the EEC Treaty in conjunction with Articles 3 (f) and 85, subject to review by the National Court to ascertain whether the legislation in question did not merely confirm both the method of restricting the yield on deposits and the level of maximum interest rates adopted under pre-existing agreements, decisions or concerted practices.

 

The Court also clarified that National legislation that restricts the tax exemption
solely to savings deposits denominated in national currency and held at financial institutions whose registered office is in the Member State concerned is not incompatible with Articles 59 to 66 and 95 of the EEC Treaty.

 

Click here to read the whole case.

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