Opinion of the Advocate General — ECLI:EU:C:2008:4
Date: 2008-01-10
Language of the case: German
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the Judgment Freedom of movement for persons – Freedom of establishment – Tax legislation – Wealth tax (Art. 52 of the EEC Treaty, (subsequently, Art. 52 of the EC Treaty, and now, after amendment, Art. 43 EC) and Art. 58 of the EEC Treaty (subsequently, Art. 58 of the EC Treaty, and now, after amendment Art. 48 EC)) In the absence of valid justification, Articles 52 of the EEC Treaty (subsequently Article 52 of the EC Treaty, and now, after amendment, Article 43 EC) and 58 of the EEC Treaty (subsequently Article 58 of the EC Treaty, and now Article 48 EC) preclude the application of tax legislation of a Member State which, for the purposes of valuing the unlisted shares of a company for the determination of the wealth tax liability of the parent company of which that company is a subsidiary causes that company’s holding in a partnership established in another Member State, subject to the condition that such a holding is capable of allowing it a definite influence on the decisions of the partnership established in the other Member State and enabling it to determine its activities, to be assigned a greater value than its holding in a partnership established in the Member State concerned. Since such a difference in treatment gives rise to a tax disadvantage for the parent company by which that company is entirely owned, that company might be discouraged from acquiring a holding in a partnership established in another Member State. The need to maintain the cohesion of a tax system can justify the restriction resulting from such legislation only to the extent that, for an argument based on such reasoning to succeed, a direct link must be established between the tax advantage concerned and the offsetting of that advantage by a particular tax levy. Such legislation cannot, moreover, be justified by the argument relating to the effectiveness of fiscal supervision since the tax authorities could request the taxpayers concerned to provide themselves the evidence which the authorities consider necessary to carry out a calculation of the value of the holdings of those taxpayers in companies or firms established in other Member States (see paras 31-33, 37, 39-42, operative part)