# C_2008064EN.01002701.xml

| 8.3.2008 | EN | Official Journal of the European Union | C 64/27 |
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Reference for a preliminary ruling from the Special Commissioners, London (United Kingdom) made on 24 December 2007 — HSBC Holdings plc, Vidacos Nominees Ltd v The Commissioners of Her Majesty's Revenue & Customs

(Case C-569/07)

(2008/C 64/38)

Language of the case: English

Referring court

Special Commissioners, London

Parties to the main proceedings

Applicants: HSBC Holdings plc, Vidacos Nominees Ltd

Defendant: The Commissioners of Her Majesty's Revenue & Customs

Questions referred

Does Article 10 or Article 11 of Council Directive 69/335( 1 ), as amended by Council Directive 85/303/EEC of 10 June 1985( 2 ), or Article 43, Article 49 or Article 56 of the EC Treaty or any other provision of European Community law prohibit the levying by one Member State (‘the first Member State’) of a duty on the transfer or issue of shares into a clearance service of 1,5 % when:

| i. | a company (‘Company A’) established in the first Member State offers to acquire the listed and traded shares in a company (‘Company B’) established in another Member State (‘the second Member State’) in return for shares in Company A, to be issued on the stock exchange in the second Member State; |
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| ii. | shareholders in Company B have the option to receive the new shares in Company A either:
a.
in certificated form; or b.
in un-certificated form through a settlement system in the first Member State; or c.
in un-certificated form through a clearance service in the second Member State; | a. | in certificated form; or | b. | in un-certificated form through a settlement system in the first Member State; or | c. | in un-certificated form through a clearance service in the second Member State; |
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| a. | in certificated form; or | | | | | | |
| b. | in un-certificated form through a settlement system in the first Member State; or | | | | | | |
| c. | in un-certificated form through a clearance service in the second Member State; | | | | | | |

| iii. | the law of the first Member State provides, in summary, that:
a.
in the event of the issue of shares in certificated form (or in un-certificated form in the settlement system for dematerialised shares of the first Member State), duty shall not be charged on the issue of the shares but on each subsequent sale of the shares, which duty is charged at the rate of 0,5 % of the consideration for the transfer; but b.
on the transfer or issue of un-certificated shares to the operator of a clearance service, duty shall be charged (where the shares are issued) at the rate of 1,5 % of the issue price or (where the shares are transferred for consideration) at the rate of 1,5 % of the amount or value of the consideration or, (in any other case) at the rate of 1,5 % of the value of the shares and, no subsequent charge is thereafter levied on sales of the shares (or of rights to or over the shares) within the clearance service. c.
the operator of a clearance service may, where it receives the approval of the relevant taxation authority, elect that no duty is charged on the transfer or issue of the shares to its clearance service, but that duty is instead charged on each sale of the shares within the clearance service, at the rate of 0,5 % of the consideration. The relevant taxation authority may (and presently does) require, as a condition for its approval of such an election, that the operator of the clearance system seeking to make such an election should make and maintain arrangements (as the taxation authority considers satisfactory) for the collection of the duty within the clearance service and for complying or securing compliance with the regulations in relation to it. | a. | in the event of the issue of shares in certificated form (or in un-certificated form in the settlement system for dematerialised shares of the first Member State), duty shall not be charged on the issue of the shares but on each subsequent sale of the shares, which duty is charged at the rate of 0,5 % of the consideration for the transfer; but | b. | on the transfer or issue of un-certificated shares to the operator of a clearance service, duty shall be charged (where the shares are issued) at the rate of 1,5 % of the issue price or (where the shares are transferred for consideration) at the rate of 1,5 % of the amount or value of the consideration or, (in any other case) at the rate of 1,5 % of the value of the shares and, no subsequent charge is thereafter levied on sales of the shares (or of rights to or over the shares) within the clearance service. | c. | the operator of a clearance service may, where it receives the approval of the relevant taxation authority, elect that no duty is charged on the transfer or issue of the shares to its clearance service, but that duty is instead charged on each sale of the shares within the clearance service, at the rate of 0,5 % of the consideration. The relevant taxation authority may (and presently does) require, as a condition for its approval of such an election, that the operator of the clearance system seeking to make such an election should make and maintain arrangements (as the taxation authority considers satisfactory) for the collection of the duty within the clearance service and for complying or securing compliance with the regulations in relation to it. |
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| a. | in the event of the issue of shares in certificated form (or in un-certificated form in the settlement system for dematerialised shares of the first Member State), duty shall not be charged on the issue of the shares but on each subsequent sale of the shares, which duty is charged at the rate of 0,5 % of the consideration for the transfer; but | | | | | | |
| b. | on the transfer or issue of un-certificated shares to the operator of a clearance service, duty shall be charged (where the shares are issued) at the rate of 1,5 % of the issue price or (where the shares are transferred for consideration) at the rate of 1,5 % of the amount or value of the consideration or, (in any other case) at the rate of 1,5 % of the value of the shares and, no subsequent charge is thereafter levied on sales of the shares (or of rights to or over the shares) within the clearance service. | | | | | | |
| c. | the operator of a clearance service may, where it receives the approval of the relevant taxation authority, elect that no duty is charged on the transfer or issue of the shares to its clearance service, but that duty is instead charged on each sale of the shares within the clearance service, at the rate of 0,5 % of the consideration. The relevant taxation authority may (and presently does) require, as a condition for its approval of such an election, that the operator of the clearance system seeking to make such an election should make and maintain arrangements (as the taxation authority considers satisfactory) for the collection of the duty within the clearance service and for complying or securing compliance with the regulations in relation to it. | | | | | | |

| iv. | the arrangements in force at the stock exchange in the second Member State require that all shares issued in that jurisdiction must be held in uncertificated form through a single clearance service established in the second Member State, the operator of which has not made the election referred to above? |
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( 1 )  Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital (OJ L 249, p. 25).

( 2 )  OJ L 156, p. 23.

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