Opinion of the Advocate General — ECLI:EU:C:1996:332
Date: 1996-09-17
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Provisions governing the Institutions;Free movement of goods;Approximation of laws;Customs Union
Procedure: Reference for a preliminary ruling
Origin: Germany;Netherlands

Summary of the Judgment
1. Preliminary rulings —Jurisdiction of the Court — Limits — Interpretation sought owing to
the applicability, to purely internal situations, of provisions of a directive transposed into
national law after the treatment of internal situations has been aligned with Community law
— Jurisdiction to provide such an interpretation — Assessment of the precise effect of the
reference made by domestic law to Community law — Exclusive jurisdiction of the national
court
(EEC Treaty, Art. 117)
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SUMMARY — CASE C-28/95
2. Approximation of laws — Common system of taxation applicable to mergers, divisions, trans­
fers of assets and exchanges of shares concerning companies of different Member States —
Directive 90/434 — Merger by exchange of shares — Concept — Financial, commercial or fis­
cal reasons for mergers — Not to be taken into account
(Council Directive 90/434, Art. 2(d) and (h))
3. Approximation of laws — Common system of taxation applicable to mergers, divisions, trans­
fers of assets and exchanges of shares concerning companies of different Member States —
Directive 90/434 — Operations having as their purpose tax evasion or tax avoidance —
Examination, subject to judicial review, by the national authorities — Possibility for the
national authorities to establish a presumption of tax evasion or avoidance — Conditions and
limits
(Council Directive 90/434, Art. 11(1)(a))
4. Approximation of laws — Common system of taxation applicable to mergers, divisions, trans­
fers of assets and exchanges of shares concerning companies of different Member States —
Directive 90/434 — Operations having as their purpose tax evasion or avoidance — Possibil­
ity of presuming tax evasion or tax avoidance in the case of operations not carried out for
valid commercial reasons — Concept of valid commercial reason — Horizontal setting-off of
losses between participating companies — Excluded
(Council Directive 90/434, Art. 11)
1. The Court of Justice has jurisdiction
under Article 177 of the Treaty to inter­
pret Community law where the situation
in question is not governed directly by
Community law but the national legisla­
ture, in transposing the provisions of a
directive into domestic law, has chosen to
apply the same treatment to purely inter­
nal situations and to those governed by
the directive, so that it has aligned its
domestic legislation with Community
law.
Where, in regulating purely internal
situations, domestic legislation adopts the
same solutions as those adopted in
Community law in order, in particular, to
avoid discrimination against foreign
nationals or any distortion of compe­
tition, it is clearly in the Community
interest that, in order to forestall future
differences of interpretation, provisions
or concepts taken from Community law
should be interpreted uniformly, irrespec­
tive of the circumstances in which they
are to apply.
However, in such a case, pursuant to the
allocation of judicial functions between
national courts and the Court of Justice
under Article 177, it is for the national
court alone to assess the precise scope of
such a reference to Community law, the
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LEUR-BLOEM v INSPECTEUR DER BELASTINGDIENST/ONDERNEMINGEN AMSTERDAM 2
jurisdiction of the Court being confined
to considering provisions of Community
law only. Consideration of the limits
which the national legislature may have
placed on the application of Community
law to purely internal situations is a mat­
ter for domestic law and consequently
falls within the exclusive jurisdiction of
the courts of the Member State.
2. Directive 90/434, on the common system
of taxation applicable to mergers, divi­
sions, transfers of assets and exchanges of
shares concerning companies of different
Member States, must be interpreted as
meaning that the common rules which it
lays down, which cover different tax
advantages, apply without distinction to .
all mergers, divisions, transfers of assets
or exchanges of shares, irrespective of the
reasons, whether financial, commercial or
simply fiscal, for those operations.
It follows that Article 2(d) of the direc­
tive, which defines a merger by exchange
of shares, does not require the acquiring
company, within the meaning of Article
2(h), to carry on business itself or there to
be a permanent merger, from the financial
and economic point of view, of the busi­
ness of two companies into a single unit.
Similarly, the fact that the same natural
person who was the sole shareholder and
director of the acquired companies
becomes the sole shareholder and director
of the acquiring company does not pre­
vent the operation in question from being
treated as a merger by exchange of shares.
3. Article 11 of Directive 90/434 is to be
interpreted as meaning that, in determin­
ing whether the planned operation has as
its principal objective or as one of its
principal objectives tax evasion or tax
avoidance, the competent national
authorities must carry out a general
examination of the operation in each par­
ticular case. Such an examination must be
open to judicial review.
Under Article 11(1)(a) of the directive,
the Member States may stipulate that the
fact that the planned operation is not car­
ried out for valid commercial reasons
constitutes a presumption of tax evasion
or tax avoidance. It is for the Member
States, observing the principle of propor­
tionality, to determine the internal proce­
dures necessary for this purpose.
However, the laying down of a general
rule automatically excluding certain cat­
egories of operations from the tax advan­
tage, whether or not there is actually tax
evasion or tax avoidance, on the basis of
criteria such as the acquiring company
carrying on business itself, a permanent
merger, from the financial and economic
point of view, of the business of two
companies into a single unit, or the fact
that the same natural person who was the
sole shareholder and director of the
acquired companies becomes the sole
shareholder and director of the acquiring
company, would go further than is neces­
sary for preventing such tax evasion or
avoidance and would undermine the aim
pursued by Directive 90/434, which is in
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SUMMARY — CASE C-28/95
fact to introduce tax rules which are neu­
tral from the point of view of compe­
tition and to prevent the operations in
question from being hampered by restric­
tions, disadvantages or distortions arising
in particular from the Member States' tax
provisions.
4. 'Valid commercial reasons', within the
meaning of Article 11 of Directive
90/434, must be interpreted as involving
more than the attainment of a purely
fiscal advantage such as horizontal
off-setting of losses.
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