![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
Court of Justice of the European Communities (including Court of First Instance Decisions) |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> AT (Taxation) [2008] EUECJ C-285/07 (11 December 2008) URL: https://www.bailii.org/eu/cases/EUECJ/2008/C28507.html Cite as: [2008] ECR I-9329, [2008] EUECJ C-285/7, [2008] EUECJ C-285/07, [2009] STC 1058, [2008] STI 2786, [2009] 1 CMLR 48 |
[New search] [Printable version] [Help]
(Directive 90/434/EEC Cross-border exchange of shares Fiscal neutrality Conditions Articles 43 EC and 56 EC Legislation of a Member State making the continued use of the book value of the shares transferred in exchange for the new shares received, and therefore the fiscal neutrality of the transfer, conditional on the carryover of that value in the tax balance sheet of the acquiring foreign company Compatibility)
In Case C-285/07,
REFERENCE for a preliminary ruling under Article 234 EC from the Bundesfinanzhof (Germany), made by decision of 7 March 2007, received at the Court on 14 June 2007, in the proceedings
A.T.
Finanzamt Stuttgart-Körperschaften,
intervening party:
Bundesministerium der Finanzen,
composed of P. Jann (Rapporteur), President of Chamber, A. Tizzano, A. Borg Barthet, E. Levits and J.J. Kasel, Judges,
Advocate General: E. Sharpston,
Registrar: B. Fülöp, Administrator,
having regard to the written procedure and further to the hearing on 17 April 2008,
after considering the observations submitted on behalf of:
A.T., by M. Schaden and H. Winkler, Rechtsanwälte, and by W. Schön, Professor,
the German Government, by M. Lumma and C. Blaschke, acting as Agents,
the Commission of the European Communities, by R. Lyal and W. Mölls, acting as Agents,
after hearing the Opinion of the Advocate General at the sitting on 6 November 2008,
gives the following
Legal framework
Community legislation
'Whereas mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States may be necessary in order to create within the Community conditions analogous to those of an internal market and in order thus to ensure the establishment and effective functioning of the common market; whereas such operations ought not to be hampered by restrictions, disadvantages or distortions arising in particular from the tax provisions of the Member States; whereas to that end it is necessary to introduce with respect to such operations tax rules which are neutral from the point of view of competition, in order to allow enterprises to adapt to the requirements of the common market, to increase their productivity and to improve their competitive strength at the international level;
Whereas tax provisions disadvantage such operations, in comparison with those concerning companies of the same Member State; whereas it is necessary to remove such disadvantages;
Whereas it is not possible to attain this objective by an extension at the Community level of the systems presently in force in the Member States, since differences between these systems tend to produce distortions; whereas only a common tax system is able to provide a satisfactory solution in this respect;
Whereas the common tax system ought to avoid the imposition of tax in connection with mergers, divisions, transfers of assets or exchanges of shares, while at the same time safeguarding the financial interests of the State of the transferring or acquired company;
...
Whereas it is necessary to allow Member States the possibility of refusing to apply this Directive where the merger, division, transfer of assets or exchange of shares operation has as its objective tax evasion or avoidance ....'
'1. On a merger, division or exchange of shares, the allotment of securities representing the capital of the receiving or acquiring company to a shareholder of the transferring or acquired company in exchange for securities representing the capital of the latter company shall not, of itself, give rise to any taxation of the income, profits or capital gains of that shareholder.
2. The Member States shall make the application of paragraph 1 conditional upon the shareholder's not attributing to the securities received a value for tax purposes higher than the securities exchanged had immediately before the merger, division or exchange.
The application of paragraph 1 shall not prevent the Member States from taxing the gain arising out of the subsequent transfer of securities received in the same way as the gain arising out of the transfer of securities existing before the acquisition.
In this paragraph the expression 'value for tax purposes' means the amount on the basis of which any gain or loss would be computed for the purposes of tax upon the income, profits or capital gains of a shareholder of the company.'
German legislation
The dispute in the main proceedings and the questions referred for a preliminary ruling
'1. Does Article 8(1) and (2) of Directive [90/434] preclude the taxation rules of a Member State under which, on the transfer of shares in one EU company to another, the [shareholder of the acquired company] may maintain the book value of the shares transferred only if the [acquiring company] has itself valued the shares transferred at their book value ('double book value carryover' doppelte Buchwertverknüpfung)?
2. If the answer is in the negative: are the above rules contrary to Articles 43 EC and 56 EC, even though the 'double book value carryover' is required also on a transfer of shares in a company to one that is subject to unlimited taxation?'
Questions referred for a preliminary ruling
Costs
On those grounds, the Court (First Chamber) hereby rules:
Article 8(1) and (2) of Council Directive 90/434/EEC of 23 July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States precludes legislation of a Member State under which, in consequence of an exchange of shares, the shareholders of the acquired company are taxed on the capital gains arising from the transfer and the capital gain is deemed to correspond to the difference between the initial cost of acquiring the shares transferred and their market value, unless the acquiring company carries over the historical book value of the shares transferred in its own tax balance sheet.
[Signatures]
* Language of the case: German.