Order — ECLI:EU:C:2007:273
Date: 2007-05-10
Language of the case: German
Court formation: Fourth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Free movement of capital
Concepts: Free movement of capital and freedom of payments;General
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the Order Freedom of movement for persons – Freedom of establishment – Provisions of the Treaty – Scope (Arts 43 EC and 56 EC) A national measure in accordance with which the loan interest paid by a resident capital company to a non-resident shareholder who has a substantial holding in the capital of that company is, under certain conditions, regarded as a covert distribution of profits, taxable in the hands of the resident borrowing company, primarily affects freedom of establishment within the meaning of Article 43 EC et seq. If it were to be accepted that such a measure has restrictive effects on the free movement of capital, such effects must be seen as an unavoidable consequence of the restriction on freedom of establishment and do not justify an examination of that measure in the light of Articles 56 EC to 58 EC. Article 43 EC et seq. cannot be relied on in a situation where a company in a non-member country has a shareholding which confers on it a determinative influence on the decisions and the activities of a company in a Member State. The chapter of the Treaty relating to freedom of establishment does not include any provision which extends the scope of its provisions to situations involving nationals of non-member countries who are established outside the European Union, the objective of that chapter being to secure freedom of establishment for nationals of Member States. (see paras 25, 27-28, operative part)