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Single language invoice requirement breaches EU law: EU Court

23 June 2016, 15:43 CET
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Single language invoice requirement breaches EU law: EU Court

European Court of Justice

(LUXEMBOURG) - The obligation to draw up cross-border invoices exclusively in a particular language, failing which they are null and void, infringes EU law, the European Court of Justice ruled Wednesday.

The case concerned a dispute concerning unpaid invoices between New Valmar, a company in the Dutch-speaking region of Belgium, and Italian company Global Pharmacies Partner Health ('GPPH').

GPPH argued the invoices were null and void on the grounds that they infringed language rules falling, in its view, within the scope of Belgian public policy.

Under Flemish law, firms established in the region must use the Dutch language to draw up acts and documents required by law.

In fact, all the standard details and general conditions in the invoices concerned were worded in Italian and not in Dutch.

During the course of the proceedings, New Valmar supplied to GPPH a translation into Dutch of the invoices. The Belgian court hearing the case states that the contested invoices are, and remain, null and void.

While New Valmar did not dispute that the invoices failed to comply with the language legislation, it did claim that the legislation is contrary to EU law, in particular to the rules on the free movement of goods.

In those circumstances the Rechtbank van Koophandel te Gent (Ghent Commercial Court, Belgium) submitted a question to the Court of Justice for a preliminary ruling.

The judgement of the Court is that the language legislation does in fact constitute a restriction on the free movement of goods within the EU.

In depriving traders of the possibility of choosing freely a language they are both able to understand for the drawing up of their invoices and in imposing on them a language which does not necessarily correspond to the one they agreed to use in their contractual relations, that legislation is likely to increase the risk of disputes and non-payment of invoices. The recipients of those invoices could be encouraged to rely on their actual or alleged inability to understand the invoices' content in order to refuse to pay them.

Conversely, the recipient of an invoice drafted in a language other than Dutch could, given that such an invoice is null and void, be encouraged to dispute its validity for that reason alone, even if it were drawn up in a language he understands. Such nullity could also be the source of significant disadvantages for the issuer of the invoice, including the loss of default interest, said the Court.

As regards the question of whether such legislation is justified, the Court considered that, first, it ensures that the general use of Dutch in the drafting of official documents, such as invoices, is protected, and, second, it makes it easier for the competent national authorities to check such documents.

However, in order to satisfy the requirements laid down by EU law, the Court says the legislation must also be "proportionate to those objectives".

In the present case, the ECJ ruled that legislation of an EU Member State which would not only require the use of the official language of that Member State for the drawing up of invoices relating to cross-border transactions, but also, in addition, the drawing up of an authentic version of such invoices in a language known to the parties concerned, would be less prejudicial to the freedom of movement of goods than the legislation in question, while being appropriate for securing the same objectives.

The Court therefore held that the legislation at issue "goes beyond what is necessary to attain the objectives it pursues and is not proportionate".

ECJ Case no C-15/15 - list of documents


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