1) The Charter of Fundamental Rights of the European Union

4. Article 41 of the Charter of Fundamental Rights of the European Union of 7 December 2000, as adapted on 12 December 2007 (‘the Charter’), makes provision for a right to be heard, under the heading ‘Right to good administration’:

‘1. Every person has the right to have his or her affairs handled impartially, fairly and within a reasonable time by the institutions, bodies, offices and agencies of the Union.

2. This right includes

(a) the right of every person to be heard, before any individual measure which would affect him or her adversely is taken; …’

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14) Against this background, the Nejvyšší správní soud (Supreme Administrative Court), which is now hearing the case, made reference to the Court pursuant to Article 267 TFEU for a preliminary ruling on the following questions, by which, according to the grounds of its order, it is requesting inter alia the interpretation of Article 41(2)(a) of the Charter:

‘1. Does it follow from European Union law that a taxpayer has the right to be informed of a decision of the tax authorities to make a request for information in accordance with Directive 77/799/EEC? Does the taxpayer have the right to take part in formulating the request addressed to the requested Member State? If the taxpayer does not derive such rights from European Union law, is it possible for domestic law to confer similar rights on him?

2. Does a taxpayer have the right to take part in the examination of witnesses in the requested State in the course of dealing with a request for information under Directive 77/799/EEC? Is the requested Member State obliged to inform the taxpayer beforehand of when the witness will be examined, if it has been requested to do so by the requesting Member State?

3. Are the tax authorities in the requested Member State obliged, when providing information in accordance with Directive 77/799/EEC, to observe a certain minimum content of their answer, so that it is clear from what sources and by what method the requested tax authorities have obtained the information provided? May the taxpayer challenge the correctness of the information thus provided, for example on grounds of procedural defects of the proceedings in the requested State which preceded the provision of the information? Or does the principle of mutual trust and cooperation apply, according to which the information provided by the requested tax authorities may not be called in question?’

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17) In the Commission’s view, the assessment of income tax in a Member State, which is the subject of the main proceedings, is not regulated either by the Mutual Assistance Directive or by other European Union law. In so far as the questions referred concern the assessment of tax, there is therefore no connection with European Union law. Furthermore, the Charter is applicable, under Article 51(1) thereof, only when the Member States are implementing Union law. This condition is not satisfied, however, where a Member State makes a request for information to another Member State. In the Commission’s view, the Court does not therefore have jurisdiction to answer parts of the first and third questions.

18) Under indent (a) of the first paragraph of Article 267 TFEU, the Court has jurisdiction for the interpretation of European Union law. The questions referred are intended to clarify the influence of European Union law on cross-border gathering and use of information in national income tax proceedings. It is possible to determine whether and in what way this is the case only through an interpretation of European Union law. Specifically with regard to the interpretation of the Charter desired by the referring court, it must also be stressed that clarification of the applicability of a provision of European Union law constitutes interpretation of European Union law. The questions referred therefore as a whole concern the interpretation of European Union law, with the result that, in principle, the Court has jurisdiction to answer them under indent (a) of the first paragraph of Article 267 TFEU.

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31) However, the referring court raises the question whether a taxpayer derives such procedural rights from Article 41(2)(a) of the Charter. Under that provision, every person has the right to be heard before any individual measure which would affect him or her adversely is taken.

32) The objection can be raised against the application of Article 41(2)(a) of the Charter in the present case, first, that – as the Commission has also argued – according to its wording that provision is not actually addressed to the national authorities. ( 11 ) It is binding on only the institutions, bodies, offices and agencies of the Union.

33) There is no need to examine here whether the judgment recently delivered in M. is to be interpreted to the effect that Article 41(2)(a) of the Charter is nevertheless also binding on the authorities of the Member States. ( 12 )

34) Irrespective of whether Article 41(2)(a) of the Charter applies to the authorities of the Member States, the temporal validity of that provision is also limited. The Charter only became legally binding by virtue of Article 6(1) TEU as amended by the Treaty of Lisbon, which itself entered into force on 1 December 2009. The request for information at issue in the present case was made and processed before that date, however, as the payment notice at issue in the main proceedings had been issued on 28 May 2009.

35) For the purposes of the main proceedings, the taxpayer does not therefore derive any procedural rights from Article 41(2)(a) of the Charter.

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38. The administrations of the Member States must comply with this legal principle, like all fundamental rights laid down by European Union law, only when they take decisions which come within the scope of Union law. ( 15 ) The Court recently found in Åkerberg Fransson that the settled case-law on the applicability of the general legal principles is now confirmed by Article 51(1) of the Charter, which defines the scope of the Charter. ( 16 ) In other words, Article 51(1) of the Charter merely codifies the conditions which have always governed the application of the general principles of European Union law. The Court has thus unified the conditions governing the application of the Charter and of the general legal principles. 39. I therefore consider it appropriate – as the Commission has also suggested – also to have regard to Article 51(1) of the Charter in the present case with a view to the clarification of the applicability of the general legal principle of observance of the rights of the defence. Under that provision, the Charter applies to the Member States only when they are implementing Union law.

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38) The administrations of the Member States must comply with this legal principle, like all fundamental rights laid down by European Union law, only when they take decisions which come within the scope of Union law. ( 15 ) The Court recently found in Åkerberg Fransson that the settled case-law on the applicability of the general legal principles is now confirmed by Article 51(1) of the Charter, which defines the scope of the Charter. ( 16 ) In other words, Article 51(1) of the Charter merely codifies the conditions which have always governed the application of the general principles of European Union law. The Court has thus unified the conditions governing the application of the Charter and of the general legal principles.

39) I therefore consider it appropriate – as the Commission has also suggested – also to have regard to Article 51(1) of the Charter in the present case with a view to the clarification of the applicability of the general legal principle of observance of the rights of the defence. Under that provision, the Charter applies to the Member States only when they are implementing Union law.

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42) It is not convincing, however, to take implementation of Union law within the meaning of Article 51(1) of the Charter to exist only where the Member States fulfil an obligation under European Union law. Rather, the Member States are also implementing Union law where they exercise a right conferred by European Union law, as is the case with the Mutual Assistance Directive. With the request for information under Article 2, the directive offers the Member States a procedure laid down in European Union law by recourse to which they are able to obtain taxation-related information from another Member State. If a Member State avails itself of this procedure laid down in European Union law, it is also implementing Union law.

43) Any other view would mean differentiating between the applicability of the general legal principles and of the Charter depending on whether European Union law imposes obligations on a Member State or confers rights on the Member State. The crucial factor, however, is whether or not a Member State’s action is based on European Union law. If a Member State acts on the basis of Union law, it is also implementing Union law, even if it is not subject to any obligation under that law.

44) As the Czech tax administration availed itself of the Mutual Assistance Directive in the present case, there is no need to determine whether implementation of Union law within the meaning of Article 51(1) of the Charter can be taken to exist on other grounds. In this respect, the Commission’s view that, without exception, the assessment of income tax does not constitute implementation of Union law is not free from doubt. In so far as Mr Sabou was protected, as regards the allowance for tax purposes of his expenditure in connection with seeking employment with football clubs in other Member States, by the freedom of movement for workers under Article 39 EC or the freedom to provide services under Article 49 EC, the Czech tax administration could also have implemented Union law.