Facts
- Mr. Schnitzer, a German tax advisor, provided tax advisory services to clients in Austria while maintaining his main establishment in Germany.
- Austrian authorities objected to his practice, claiming it constituted a permanent establishment in Austria and required compliance with Austrian professional regulations.
- The dispute focused on whether the nature, frequency, and regularity of his presence in Austria amounted to full establishment or merely temporary service provision.
Issues
- Whether a professional who maintains a primary establishment in one Member State can provide services in another Member State without being regarded as permanently established there.
- What criteria determine the distinction between establishment and the temporary provision of services under Article 49 TFEU.
- To what extent Member States may impose regulatory requirements on cross-border service provision without breaching EU law.
Decision
- The Court held that the freedom of establishment under Article 49 TFEU is not limited to setting up a permanent presence in the host Member State.
- Professionals may offer temporary cross-border services while maintaining a primary establishment in their home Member State, provided they meet certain criteria.
- The ECJ outlined that the duration, frequency, regularity, and periodicity of the service must all be considered to assess if the activity is temporary.
- No single criterion is decisive; the assessment must be comprehensive and account for the specific professional activity at issue.
- Member States are permitted to regulate professional services within their territory for public interest protection but any restrictions must be justified and proportionate.
Legal Principles
- Article 49 TFEU guarantees the freedom of establishment, which includes both permanent and, in certain circumstances, temporary cross-border professional activity.
- The distinction between establishment and service provision depends on an overall evaluation of the duration, frequency, regularity, and periodicity of the activity.
- Restrictions imposed by Member States must be justified by legitimate public interest objectives and must not create unjustified obstacles to the freedom of establishment or provision of services.
- This case builds upon principles established in Case C-55/94 Gebhard, refining the test for differentiating between establishment and services.
Conclusion
The ECJ judgment in Schnitzer v Finanzamt clarified and broadened the scope of the freedom of establishment, enabling professionals to provide temporary cross-border services within the EU without full host-state establishment, provided such activities remain temporary and any regulatory barriers are justified and proportionate.