Judgment;Summary — ECLI:EU:C:2020:54
Date: 2020-01-30
Language of the case: Dutch
Court formation: Seventh Chamber
Subject matter: Right of establishment;Free movement of capital
Procedure: Reference for a preliminary ruling
Origin: Belgium

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
22 November 2018 
Referring court: 
Grondwettelijk Hof (Belgium) 
Date of the decision to refer: 
8 November 2018 
Applicant: 
Anton van Zantbeek VOF 
Defendant: 
Ministerraad 
  
Subject matter of the action in the main proceedings 
Action for annulment of Articles 122 and 123 of the programmawet van 
25 december 2016 (Programme Law of 25 December 2016) (Belgisch Staatsblad 
(Official Journal) of 29 December 2016, second edition). 
Subject matter and legal basis of the request for a preliminary ruling 
Legal basis: Article 267 TFEU 
The request for a preliminary ruling concerns the question whether the principle of 
freedom to provide services or the principle of free movement of capital precludes 
national legislation under which a Belgian natural person or legal person who 
issues a stock exchange order becomes liable for the tax on stock exchange 
transactions (‘taks op de beursverrichtingen’; ‘TOB’) in the case where the 
professional intermediary is established outside Belgium.  
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-725/18 
 
2  
Questions referred 
1. Should Article 56 of the Treaty on the Functioning of the European Union 
and Article 36 of the Agreement on the European Economic Area of 2 May 1992 
be interpreted as precluding national legislation which introduces a tax on stock 
exchange transactions, as referred to in Articles 120 and 126/2 of the Belgian 
Wetboek diverse rechten en taksen (Code of miscellaneous duties and taxes), and 
which results in the Belgian issuer of an order becoming liable for that tax in the 
case where the professional intermediary is established outside Belgium?  
2. Should Article 63 of the Treaty on the Functioning of the European Union 
and Article 40 of the Agreement on the European Economic Area of 2 May 1992 
be interpreted as precluding national legislation which introduces a tax on stock 
exchange transactions, as referred to in Articles 120 and 126/2 of the Belgian 
Wetboek diverse rechten en taksen (Code of miscellaneous duties and taxes), and 
which results in the Belgian issuer of an order becoming liable for that tax in the 
case where the professional intermediary is established outside Belgium?  
3. If, on the basis of the reply to the first or second question referred for a 
preliminary ruling, the Grondwettelijk Hof (Constitutional Court) were to 
conclude that the contested articles infringe one or more of the obligations arising 
from the provisions cited in those questions, could it temporarily continue to 
enforce the effects of Articles 120 and 126/2 of the Belgian Wetboek diverse 
rechten en taksen (Code of miscellaneous duties and taxes) in order to prevent 
legal uncertainty and to enable the legislature to bring those provisions into 
conformity with those obligations?  
Provisions of EU cited 
Articles 51, 52, 56, 63, 64, 65 and 75 TFEU 
Articles 36 and 40 of the Agreement on the European Economic Area of 2 May 
1992 
Provisions of national law cited 
Articles 10, 11 and 172 of the Grondwet (Belgian Constitution) 
Articles 122 and 123 of the programmawet van 25 december 2016 (Programme 
Law of 25 December 2016) 
Articles 120, 125, 126/1, 126/2, 127 of the Belgian Wetboek diverse rechten en 
taksen (Code of miscellaneous duties and taxes)  
ANTON VAN ZANTBEEK 
 
3 
Brief summary of the facts and procedure in the main proceedings 
1 Before the contested legislative amendment, Belgian professional intermediaries 
were obliged, under Articles 120 to 137 of the Wetboek diverse rechten en taksen, 
to withhold a TOB on certain stock exchange transactions concluded or executed 
in Belgium.  
2 By the contested provisions, the legislature extended the scope of the TOB. 
Pursuant to Articles 122 and 123 of the programmawet van 25 december 2016, it 
is no longer solely the professional intermediaries who are liable for the tax which 
is payable by their client who issues a stock exchange order and by virtue thereof 
is liable for the TOB, but also, in certain cases, the party who issued the order.  
Article 120 of the Wetboek diverse rechten en taksen, as amended by the 
contested Article 122, provides that transactions by foreign professional 
intermediaries will also be deemed to have been concluded or executed in 
Belgium in cases where the order to that effect has been given to intermediaries 
established outside Belgium by a natural person having his habitual residence in 
Belgium or by a legal person on behalf of a registered office or one of its branches 
in Belgium.  
It is also provided that, where the intermediary is established outside Belgium, the 
party who issued the order becomes liable for the tax and is subject to the 
obligations referred to in Article 125 — that is to say, an obligation to pay the tax 
within set periods — unless he can prove that he has paid the tax (Article 126/2 of 
the Wetboek diverse rechten en taksen, as amended by the contested Article 123). 
3 According to the applicant, that legislation is contrary to the principle of equality 
and non-discrimination with regard to taxation (Articles 10, 11 and 172 of the 
Belgian Constitution). Furthermore, the applicant considers that legislation to be 
contrary to the aforementioned articles read in conjunction with Article 56 TFEU 
and Article 36 of the Agreement on the European Economic Area of 2 May 1992 
or read in conjunction with Article 63 TFEU and with Article 40 of the 
aforementioned Agreement. 
Consequently, the applicant lodged (within six months of the publication of the 
Programmawet concerned in the Belgisch Staatsblad) an application for the 
annulment of the contested legislative provisions with the Grondwettelijk Hof. 
Main submissions of the parties to the main proceedings 
4 The applicant puts forward three pleas in law: 
– Infringement of the principle of equality and non-discrimination with regard to 
taxes (Articles 10, 11 and 172 of the Belgian Constitution).  
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-725/18 
 
4  
According to the applicant, the contested provisions create an unjustified 
difference in treatment between Belgian persons, depending on whether they use a 
Belgian or a non-Belgian professional intermediary for their investments in the 
unified Europe. If a person residing in Belgium uses a non-Belgian professional 
intermediary, he himself is treated as a professional intermediary because he 
himself becomes liable for the TOB. As a result, he becomes subject to 
administrative obligations and penalties that are almost identical to those of a 
Belgian professional intermediary.  
[The applicant] submits that the objective stated by the Ministerraad (Council of 
Ministers) as justification — including the avoidance of unfair competition — is 
not lawful, that it is through the application of the Belgian tax to orders concluded 
or executed outside Belgium that the difference in treatment is created, and that 
the Belgian issuer of the order may, for a variety of economic and financial 
motives, prefer a non-Belgian to a Belgian professional intermediary. According 
to the applicant, it is neither appropriate nor proportionate to ‘punish’ that issuer 
of the order for doing so by treating that layman as a Belgian professional 
intermediary.  
According to the Ministerraad, the defendant, the respective situations are not 
comparable. The situation of the Belgian issuer of an order differs depending on 
whether a Belgian or a foreign professional intermediary is used. In the 
alternative, it is of the view that the difference in treatment is justified because it is 
based on an objective criterion, pursues a legitimate aim (avoiding unfair 
competition between local and foreign professional intermediaries and laying 
down clearer rules) and is not disproportionate (the measure is imposed only when 
the Belgian issuer of an order, by using a professional intermediary established 
abroad, has circumvented Belgian tax legislation, because no TOB was withheld 
in the execution of the stock exchange transaction. The legislature has expressly 
tried to facilitate the provision of proof of payment of the TOB). 
– Infringement of Articles 10, 11 and 172 of the Constitution, read in conjunction 
with Article 56 TFEU and Article 36 of the Agreement on the European 
Economic Area of 2 May 1992 (second plea in law — infringement of the 
freedom to provide services)  
– Infringement of Articles 10, 11 and 172 of the Constitution, read in conjunction 
with Article 63 TFEU and Article 40 of the aforementioned Agreement (third 
plea in law — infringement of the free movement of capital) 
According to the applicant, the contested articles make it significantly more risky, 
more expensive and administratively disproportionately more difficult for a 
Belgian resident to use a foreign professional intermediary. 
The rule discourages investment outside Belgium and, conversely, strongly 
encourages investors to invest only in Belgium, thereby giving rise to distortions 
of competition. That discouragement arises directly from the contested provisions, 
ANTON VAN ZANTBEEK 
 
5 
which therefore constitute a restriction on the freedom to provide services and on 
the free movement of capital prohibited in principle by Articles 56 and 
Article 63(1) TFEU. 
Those Treaty infringements are not justified by objectives in the general interest. 
The Ministerraad submits that, where national taxes are at issue, the mere 
imposition of a tax already results in a restriction of economic activity. In its 
opinion, the Court of Justice therefore opts for a more flexible approach with 
regard to the freedoms of the internal market, in particular with regard to the 
freedom to provide services, the freedom of establishment and the free movement 
of capital. Although the new tax rule entails additional costs for professional 
intermediaries, it applies without distinction to all providers of stock exchange 
transactions who deal with issuers of orders who are established in Belgium, 
regardless of where they themselves are established. According to the 
Ministerraad, it is only if the imposition of a tax would have a greater impact on 
cross-border situations than on purely national situations that it could be argued 
that the principle of freedom to provide services or of the free movement of 
capital has been infringed.  
In addition, the Ministerraad reiterates that the disputed articles are in the interests 
of legal certainty and of the safeguarding of the economic well-being of the 
country. The Court of Justice has already acknowledged that the need to ensure 
the recovery of the prescribed tax could be an overriding reason in the public 
interest which could justify a restriction on the freedom to provide services and 
the free movement of capital. 
Brief summary of the reasons for the request 
5 In its request for a preliminary ruling, the Grondwettelijk Hof examines only the 
second and third pleas in law. 
6 It follows from the aforementioned articles of the FEU Treaty and from the 
Agreement on the European Economic Area of 2 May 1992 that restrictions on the 
freedom to provide services within the European Union and restrictions on the 
movement of capital and payments between Member States and between Member 
States and third countries are in principle prohibited.  
However, a Member State may impose restrictions on the freedom to provide 
services on the basis of Articles 51 (official authority) and 52 (public policy, 
public security and public health) of the FEU Treaty or on the basis of overriding 
reasons in the general interest. At the same time, restrictions on the movement of 
capital may be justified on grounds of the general interest (Article 65 TFEU) and 
under certain conditions restrictions may be imposed on the movement of capital 
(Articles 64 and 66 TFEU) or on capital movements and payments (Article 75 
TFEU) to or from third countries.  
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-725/18 
 
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7 Referring to the case-law of the Court of Justice, the Grondwettelijk Hof states 
that a restriction — that is to say, a measure taken by a Member State which, 
although applicable without distinction, may affect the freedom to provide 
services in the other Member States (CJEU, 4 May 2017, C-339/15, 
Vanderborght, paragraph 62) — on the freedom to provide services or on capital 
movements and payments is permissible only if it pursues an objective of general 
interest, is appropriate for securing the attainment of the objective pursued, and 
does not go beyond what is necessary in order to attain that objective (CJEU, 
l June 1999, C-302/97, Konle, paragraphs 36 to 49; 6 June 2000, C-35/98, 
Verkooijen, paragraph 43; 25 January 2007, C-370/05, Festersen, paragraph 28; 
17 January 2008, C-256/06, Jäger, paragraph 50; 4 May 2017, C-339/15, 
Vanderborght, paragraph 65; 31 May 2018, C-190/17, Lu Zheng v Ministerio de 
Economia y Competitividad, paragraph 37). A restriction on the freedom to 
provide services or on capital movements and payments is not proportionate if the 
objective pursued could be achieved by a less restrictive measure (CJEU, 5 March 
2002, C-515/99, Reisch and Others, paragraphs 35 to 39).  
8 The issuer of an order who uses a foreign professional intermediary becomes 
liable for the TOB, with its associated obligations, if he cannot demonstrate that 
the TOB was paid.  
Notwithstanding the legislature’s endeavours to facilitate the provision of proof of 
payment of the TOB by allowing foreign intermediaries to appoint a liable 
representative, the fact remains that, in the light of the principle of territoriality, 
neither the Belgian issuer of an order nor the Belgian State may oblige a foreign 
professional intermediary to appoint a liable representative. Without a liable 
representative, the Belgian resident remains liable for the TOB.  
9 In accordance with the contested Article 123 of the programmawet van 
25 december 2016, the Belgian resident, as the person liable for the TOB, is 
exempt from the declaration and payment obligation only if he can prove that the 
TOB has already been paid. The issuer of the order can provide the necessary 
proof by submitting an order statement (‘borderel’) (Article 127 of the Wetboek 
diverse rechten en taksen) or by means of, for example, a bank statement.  
10 The fact that the foreign professional intermediary cannot be obliged to appoint a 
liable representative and that it is difficult, in practice, for a Belgian resident to 
provide proof that he has paid his TOB, or to provide the proof required by the tax 
authorities by means of an order statement (‘borderel’), when he uses a foreign 
intermediary, mean that the Belgian resident who might wish to place an order 
with a foreign professional intermediary, could, partly in view of the liability to 
which it would give rise for the issuer of the order in the event of the late 
declaration and payment of the TOB or the failure to do so at all, be limited in his 
choice of intermediary since, as a result of doing so, he becomes liable himself for 
the TOB and subject to the associated obligations.  
ANTON VAN ZANTBEEK 
 
7 
11 It cannot therefore be excluded that Belgian residents might be constrained into 
not using a foreign professional intermediary for their stock exchange 
transactions. It follows that this raises the question whether the freedom to provide 
services or the free movement of capital precludes national legislation under 
which the Belgian issuer of an order becomes liable for the TOB in the case where 
the professional intermediary is established outside Belgium.  
Under the third paragraph of Article 267 TFEU, the Grondwettelijk Hof is 
therefore obliged to refer questions in this regard to the Court of Justice for a 
preliminary ruling.