Opinion of the Advocate General — ECLI:EU:C:2007:500
Date: 2007-09-11
Language of the case: German
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Free movement of capital
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the Judgment Free movement of capital – Restrictions – Inheritance tax (EC Treaty, Art. 73b(1)1, and 73d (now Arts 56(1)EC and 58 EC)) Article 73b(1) of the Treaty (now Article 56(1) EC), read in conjunction with Article 73d of the Treaty (now Article 58 EC), must be interpreted as precluding legislation of a Member State which, for the purposes of calculating the tax on an inheritance consisting of assets situated in that State and agricultural land and forestry situated in another Member State, – provides that account be taken of the fair market value of the assets in that other Member State, whereas a special valuation procedure exists for identical domestic assets, the results of which amount on average to only 10% of that fair market value, and – reserves application of a tax-free amount to domestic agricultural land and forestry in relation to those assets and takes account of their remaining value in the amount of only 60% thereof. Such provisions, in so far as they result in an inheritance consisting of agricultural land and forestry situated in another Member State being subject, in the first Member State, to inheritance tax that is higher than that which would be payable if the assets inherited were situated exclusively within the territory of that State, have the effect of restricting the movement of capital by reducing the value of an inheritance consisting of such an asset situated outside national territory. Such national legislation cannot be justified on the ground that it concerns situations which are not objectively comparable since the calculation of inheritance tax is, under that legislation, directly linked to the value of the assets included in the estate, and there is therefore objectively no difference in situation such as to justify unequal tax treatment so far as concerns the level of inheritance tax payable in relation to, respectively, an asset situated in the national territory and an asset situated in another Member State. Furthermore, the objective of preventing the tax burden from jeopardising the continuation of the activities of agricultural and forestry holdings, and, thereby, the preservation of the social role of those holdings cannot justify the provisions in question, given that there is no evidence to support a finding that the holdings established in other Member States are not in a comparable situation to that of holdings situated in national territory. The same is true of any difficulties encountered in determining the value of assets situated in the territory of another Member State under a special national procedure, since those difficulties cannot be sufficient to justify a categorical refusal to grant the tax advantage such as that arising under the legislation at issue, which, apart from that assessment procedure, also reserves the application of two other tax advantages to assets situated within the national territory. (see paras 32, 43-44, 52, 54-55, 57, operative part)