Case C‑316/15

Timothy Martin Hemming and Others

v

Westminster City Council

(Request for a preliminary ruling
from the Supreme Court of the United Kingdom)

(Reference for a preliminary ruling — Freedom to provide services — Directive 2006/123/EC — Article 13(2) — Authorisation procedures — Concept of charges which may be incurred)

Summary — Judgment of the Court (Third Chamber), 16 November 2016

Freedom of establishment — Freedom to provide services — Services in the internal market — Directive 2006/123 — Authorisation scheme — Requirement to pay a fee — Part of the fee corresponding to the costs relating to the management and enforcement of the authorisation scheme concerned — Not permissible — Part refundable if the application for authorisation is refused — No bearing

(European Parliament and Council Directive 2006/123, Art. 13(2))

Article 13(2) of Directive 2006/123 on services in the internal market must be interpreted as precluding the requirement for the payment of a fee, at the time of submitting an application for the grant or renewal of authorisation, part of which corresponds to the costs relating to the management and enforcement of the authorisation scheme concerned, even if that part is refundable if that application is refused.

Whether the fee payable by an applicant is refundable when his licence application is rejected has no bearing on ascertaining whether there is a charge within the meaning of Article 13(2) of that directive. The fact that a fee must be paid constitutes a financial obligation, and therefore a charge, which the applicant must pay in order for his application to be considered, notwithstanding the fact that the amount may subsequently be refunded if that application is rejected.

In order to comply with Article 13(2) of Directive 2006/123, the charges referred to must, in the words of that provision, be reasonable and proportionate to the cost of the authorisation procedures and not exceed the cost of those procedures. In calculating the amount of duties paid by way of fees or dues, the Member States are entitled to take account, not only of the material and salary costs which are directly related to the effecting of the transactions in respect of which they are incurred, but also of the proportion of the overheads of the competent authority which can be attributed to those transactions.

The costs taken into account may not include the expenditure linked to the authority in question’s general supervisory activities, given that, first, Article 13(2) of Directive 2006/123 is directed only at the cost of the procedures and, secondly, pursues the aim of facilitating access to service activities. That aim would not be served by a requirement to prefinance the costs of the management and enforcement of the authorisation scheme concerned, including, inter alia, the costs of detecting and prosecuting unauthorised activities.

(see paras 28, 29, 31-34, operative part)