Judgment — ECLI:EU:C:2016:359
Date: 2016-05-26
Language of the case: Greek
Court formation: Seventh Chamber
Subject matter: Free movement of capital
Procedure: Action for failure to fulfil obligations - successful
Origin: Greece

Summary — Judgment of the Court (Seventh Chamber), 26 May 2016 1. Free movement of capital and liberalisation of payments — Restrictions — Inheritance tax — Legislation of a Member State providing for an exemption from inheritance tax relating to the primary residence only for nationals of EU Member States who are permanently resident in the Member State concerned — Not permissible — No justification (Art. 63 TFEU; EEA Agreement, Art. 40) 2. Free movement of capital and liberalisation of payments — Restrictions — Inheritance tax — Justification — Burden of proof on the Member State (Art. 63 TFEU) 3. Actions for failure to fulfil obligations — Examination of the merits by the Court — Situation to be taken into consideration — Situation on expiry of the period laid down in the reasoned opinion (Art. 258 TFEU) 1. By enacting and maintaining in force legislation which provides for an exemption from inheritance tax relating to the primary residence, which applies solely to nationals of EU Member States who are resident in the Member State concerned, that Member State has failed to fulfil its obligations under Article 63 TFEU and under Article 40 of the Agreement on the European Economic Area. Tax legislation of that kind has the effect of reducing the value of the estate for the heir who fulfils all of the requirements, apart from the requirement of being permanently resident in that Member State, by depriving the person concerned of the exemption from inheritance tax and thereby resulting in that person being subjected to a heavier tax burden than that borne by an heir who is permanently resident there. As regards the comparability of the situations of the categories of persons concerned, where, for the purposes of taxing immovable property acquired by inheritance and located in the Member State concerned, national legislation places non-resident and resident heirs on the same footing, it cannot, without infringing the requirements of EU law, treat those heirs differently in connection with that tax in respect of that immovable property. That is so in the present case. Furthermore, no overriding reason in the public interest raised by the Member State concerned is capable of justifying a restriction on the free movement of capital within the meaning of Article 63 TFEU. That legislation is not appropriate for guaranteeing attainment, in a systematic and consistent manner, of the general social-interest objective of addressing housing needs, since the exemption laid down is not subject to the obligation that the heir establishes the inherited property as his primary residence or that he occupies that property at all. In addition, the need to prevent a reduction in tax revenues is neither among the objectives stated in Article 65 TFEU nor an overriding reason in the public interest capable of justifying a restriction on a freedom instituted by the FEU Treaty. (see paras 31, 36-38, 40, 43, 45, 50, operative part) 2. See the text of the decision. (see para. 42) 3. See the text of the decision. (see para. 47)