Answer given by Mrs Fischer Boel on behalf of the Commission
The Commission would, firstly, like to remind the Honourable Member of its answer to his previous Written Questions E‑5012/06 and E‑5017/06, where the Commission stated that, to the extent that Community aid forms part of the farmer's income, it is subject to the general taxation regime of the Member State concerned and that any complaint about such a taxation regime should be made according to the national rules under which it may be challenged.
The Commission takes the view that the levying of general taxes, whilst obviously leading to differences in treatments between the taxpayers in one Member State to those compared in another Member State, does not constitute a case of discrimination contrary to the EC‑Treaty, in particular the aims and principles of the common agricultural policy (CAP) title of the Treaty. In the absence of harmonisation, the design of their general taxation regimes falls within the competences of Member States.
Therefore, the Commission cannot see any unlawful discrimination in the levying of taxes on the income of farmers including financial support under CAP support schemes. The Commission would like to remind the Honourable Member of the judgment of the European Court of Justice (ECJ) in Joined Cases 36 and 71/80, Irish Creamery Milk Suppliers, ECR 1981, 735, where the ECJ, under point 13 of its judgment, held that ‘According to Article 39(2)(c) of the Treaty, in working out the common agricultural policy, account shall be taken of the fact that in the Member States agriculture constitutes a sector closely linked with the economy as a whole’(1), and that ‘(T)he common agricultural policy is not intended, …, to shield those engaged in agriculture from the effects of a national incomes policy’.
Therefore, as long as the submission of CAP-aid received by a beneficiary is being submitted to the general income tax regimes of the Member States, the Commission does not see a need or indeed a legal basis for taking any particular action as regards the tax treatment by the Member States of such aids.
The CAP does, indeed, constitute a common policy. It sets up common rules applicable in all Member States. However, as explained above, in the present state of integration, tax rules not having been subject to harmonisation (such as the general tax rules, inter alia applicable to agricultural aids) remain within the competence of the Member States.