Judgment — ECLI:EU:C:2017:465
Date: 2017-06-15
Language of the case: French
Court formation: Ninth Chamber
Subject matter: Right of establishment
Procedure: Reference for a preliminary ruling
Origin: Belgium

Summary — Judgment of the Court (Ninth Chamber), 15 June 2017 1. Freedom of establishment — Companies — Directive 78/660 — Annual accounts of certain types of companies — Directive concerning only accounting purposes, not designed to lay down the conditions for determination of the basis for assessment (Council Directive 78/660) 2. Questions referred for a preliminary ruling — Jurisdiction of the Court — Interpretation of EU law in the context only of its indirect application — Admissibility of the questions referred on the facts of the case (Art. 267 TFEU; Council Directive 78/660) 3. Freedom of establishment — Companies — Directive 78/660 — Annual accounts of certain types of companies — Principle that a true and fair view must be given — Principle of making valuations on a prudent basis — Issuing company of a share option recognising the grant date price of the option in the course of the accounting year of the exercise of the option or at the end of its period of validity — Lawfulness (Art. 50(2)(g) TFEU; Council Directive 78/660, Arts 2(3) and 31(1)(c)) 1. See the text of the decision. (see paras 31, 33) 2. See the text of the decision. (see para. 36) 3. The principles that a true and fair view must be given and that valuation must be made on a prudent basis set out in Articles 2(3) and 31(1)(c) respectively of Council Directive 78/660/EEC of 25 July 1978 based on Article [50(2)(g) TFEU] on the annual accounts of certain types of companies, as amended by Directive 2003/51/EC of the European Parliament and of the Council of 18 June 2003, must be interpreted as not precluding an accounting method according to which a company issuing a share option may recognise as income the grant date price of that option in the course of the accounting year in which that option is exercised or at the end of its period of validity. As regards share options, such as those at issue in the main proceedings, the directive contains no specific guidance as to the method according to which the price of those options must be recognised. As the Commission noted in its observations submitted to the Court, there are, therefore, necessarily various methods compatible with Directive 78/660 provided that they comply with the general principles set out in that directive. In that regard, it should be noted that it is not apparent from the documents in the case file submitted to the Court that an accounting method, such as that at issue in the actions in the main proceedings, according to which a company issuing a share option may recognise as income the grant date price of that option in the course of the accounting year in which that option is exercised or at the end of its period of validity, does not comply with those principles. First, the fact that a company issuing a share option recognises as income the grant date price of that option only after the option is exercised or at the end of its validity is not incompatible with the principle that valuation must be made on a prudent basis. Second, it cannot be ruled out, as the applicants in the main proceedings maintain in their observations submitted to the Court, that, where the grant date price for the option is recognised as income in the course of the tax year in which that option is issued and before being exercised or, where relevant, before the end of its validity, the accounts of issuing companies show, in the tax years following the issuing of the option, liabilities that are greater than those which they show if the purchase price is recognised in the course of the financial year in which the option is exercised or falls due. (see paras 44-47, operative part)