The Court of Justice of the EU has ruled that the Flemish language rules requiring invoices relating to cross-border transactions to be drawn up in Dutch, failing which those invoices are null and void, go beyond what is strictly necessary to promote the use of Dutch and restrict the free movement of goods (21 June 2016, C-15/5).
In the case at hand, a Belgian company issued its invoices in Italian because its customer was Italian and that customer raised the defence that the invoices were null and void. The customer claimed that a new invoice had to be issued in Dutch and that late payment interest only accrued as from the date of the new invoice.
A Flemish decree of 1973 requires that “acts and documents required by the law” shall be drawn up in the Dutch language. An undertaking having its registered office in the Dutch-speaking region of Belgium must therefore issue all its invoices in Dutch. Invoices that are not in Dutch are null and void, even if they are issued in the language of the customer.
According to the Advocate General, however, the Flemish decree of 1973 does not comply with the free movement of goods in the EU (infringement of Article 26(2) and Articles 34–35 of the Treaty on the Functioning of the European Union). The Advocate General pointed out that the Flemish legislation produces a dissuasive effect with regard to intra-Community trade, not only for those undertakings established in the Flemish Region which seek to export their goods to other Member States, but also for foreign companies seeking to conclude a transaction with those undertakings.
The Court of Justice of the EU has now ruled that promoting and encouraging the use of one or more official languages of a Member State may constitute a legitimate objective, but the Flemish language rules go beyond what is strictly necessary to promote the use of Dutch and to enable the competent authorities to check the relevant details (21 June 2016, C-15/5).
The Court of Justice has declared that the provisions of the Flemish decree of 1973 are incompatible with EU law. They constitute measures having equivalent effect to quantitative restrictions on exports and are therefore prohibited under Article 35 of the Treaty on the Functioning of the European Union.
As a result, Flemish companies are no longer required to issue their invoices in Dutch, but can choose other languages such as English, French or Italian, if this language is more appropriate for their customers.
On this topic, see also a previous eAlert on the opinion of the Advocate General.
Tom Heremans, Managing Partner (tom.heremans@cms-db.com)
