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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Fortum Project Finance (Free movement of capital) [2007] EUECJ C-240/06 (25 October 2007) URL: https://www.bailii.org/eu/cases/EUECJ/2007/C24006.html Cite as: [2007] EUECJ C-240/6, [2007] EUECJ C-240/06 |
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(Article 56(1) EC Directive 69/335/EEC Article 12(1)(a) and (c) Exception to the prohibition on double taxation of contributions of capital Contribution of capital in the form of shares to a company established in another Member State Exchange of shares Capital transfer tax)
In Case C-240/06,
REFERENCE for a preliminary ruling under Article 234 EC, by the Korkein hallinto-oikeus (Finland), made by decision of 26 May 2006, received at the Court on 29 May 2006, in the proceedings brought by
Fortum Project Finance SA,
composed of P. Jann, President of the Chamber, A. Tizzano, A. Borg Barthet, M. Ilešič (Rapporteur) and E. Levits, Judges,
Advocate General: Y. Bot,
Registrar: C. Strömholm, Administrator,
having regard to the written procedure and further to the hearing on 19 April 2007,
after considering the observations submitted on behalf of:
Fortum Project Finance SA, by M. Tunturi and T. Kanervo, asiamiehet,
the Finnish Government, by E. Bygglin and J. Heliskoski, acting as Agents,
the United Kingdom Government, by V. Jackson, acting as Agent, and R. Hill, Barrister,
the Commission of the European Communities, by R. Lyal and P. Aalto, acting as Agents,
after hearing the Opinion of the Advocate General at the sitting on 5 July 2007,
gives the following
Legal context
Community legislation
'Within the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between the Member States ... shall be prohibited.'
'Member States shall not subject to any form of taxation whatsoever:
(a) the creation, issue, admission to quotation on a stock exchange, making available on the market or dealing in stocks, shares or other securities of the same type, or of the certificates representing such securities, by whomsoever issued;
(b) loans, including government bonds, raised by the issue of debentures or other negotiable securities, by whomsoever issued, or any formalities relating thereto, or the creation, issue, admission to quotation on a stock exchange, making available on the market or dealing in such debentures or other negotiable securities'.
'(a) duties on the transfer of securities, whether charged at a flat rate or not;
(b) transfer duties, including land registration taxes, on the transfer, to a company, firm, association or legal person operating for profit, of businesses or immovable property situated within their territory;
(c) transfer duties on assets of any kind transferred to a company, firm, association or legal person operating for profit, in so far as such property is transferred for a consideration other than shares in the company;
...'
National legislation
The dispute in the main proceedings and the question referred for a preliminary ruling
'Are Article 56 EC and Article 12(1)(c) of ... Directive 69/335/EEC ... to be interpreted as precluding the charging of capital transfer tax where securities are transferred, as described in the order for reference, as a contribution to a capital company which gives new shares of its own in return?'
The question referred for a preliminary ruling
Costs
On those grounds, the Court (First Chamber) hereby rules:
Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital, as amended by Council Directive 85/303/EEC of 10 June 1985, must be interpreted as meaning that Article 12(1)(c) does not apply to the charging of a duty, such as Finnish capital transfer tax (varainsiirtovero), where securities are transferred as a contribution to a capital company which gives new shares of its own as consideration for that transfer. Article 12(1)(a) of the directive allows such a duty to be charged.
[Signatures]
* Language of the case: Finnish.