Judgment — ECLI:EU:C:2011:586
Date: 2011-09-15
Language of the case: Dutch
Court formation: Second Chamber
Subject matter: Right of establishment;Free movement of capital;Internal market - Principles
Procedure: Reference for a preliminary ruling
Origin: Belgium

Summary of the Judgment Free movement of capital – Restrictions – Tax legislation – Inheritance tax (Art. 63 TFEU) Article 63 TFEU must be interpreted as precluding legislation of a Member State which provides, as regards inheritance tax, for a limitation period of 10 years for the valuation of registered shares in a company in which the deceased was a shareholder and whose centre of effective management is established in another Member State, while the same limitation period is 2 years when the company’s centre of effective management is in the first Member State. The application of a longer limitation period to heirs holding shares in a company whose centre of effective management is established in another Member State may have the effect of deterring residents of the first State from investing or maintaining investments in assets situated outside that Member State, given that their heirs will experience a longer period of uncertainty as to the possibility of being subject to a tax adjustment. Such legislation is not justified by the need to guarantee the effectiveness of fiscal supervision or the objective of the prevention of tax evasion insofar as the general application of the 10-year limitation period is in no way based on the time needed to have effective recourse to mechanisms of mutual assistance or other alternative means of investigating the value of the shares concerned. A situation in which taxable items have been concealed from the national tax authorities, and those authorities do not have any evidence which would enable an investigation to be initiated, must be distinguished from the situation in which those authorities have evidence concerning those taxable items. When the tax authorities of a Member State have evidence enabling them to request the competent authorities of other Member States, whether by way of the mutual assistance provided for in Directive 77/799, concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation, or of that provided for under bilateral conventions, to communicate to them the information necessary to establish the correct amount of tax due, the mere fact that the taxable items concerned are located in another Member State does not justify the general application of an additional recovery period which is in no way based on the time needed to have effective recourse to those mechanisms of mutual assistance. (see paras 24, 30, 33, 36, 39-40, operative part)