Opinion of the Advocate General — ECLI:EU:C:1999:258
Date: 1999-05-20
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Free movement of capital
Procedure: Reference for a preliminary ruling
Origin: Austria

Summary of the Judgment 
1. Free movement of capital — Restrictions — Taxation by a Member State of loan 
agreements, including those entered into in another Member State — Justified by the 
need to prevent the infringement of national tax law and regulations 
(EC Treaty, Arts 73b(l), 73d(l)(b) and (3) (now Arts 56(1) EC, S8(l)(b) and (3) EC)) 
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SUMMARY — CASE C-439/97 
2. Free movement of capital — Restrictions — Taxation by a Member State only of loans 
entered into in another Member State — Not permissible — Whether justifiable — No 
justification 
(EC Treaty, Arts 73b(l) and 73d(l)(b) (now Arts 56(1) EC and 58(l)(b) EC)) 
1. Articles 73b(l) and 73d(l)(b) and (3) 
of the Treaty (now Articles 56(1) EC 
and 58(1)(b) and (3) EC) are to be 
interpreted as not precluding the levy­
ing of duty, under the legislation of a 
Member State, on loan agreements, 
including those entered into in another 
Member State, payable by all natural 
and legal persons resident in that State 
who enter into such a contract, irre­
spective of the nationality of the con­
tracting parties or of the place where 
the loan is contracted. 
Although, in depriving residents of a 
Member State of the possibility of 
benefiting from the absence of taxation 
which may be associated with loans 
obtained outside the national territory, 
such legislation is likely to deter them 
from obtaining loans from persons 
established in other Member States 
and therefore constitutes a restriction 
on the movement of capital, it is 
intended to ensure equality of tax 
treatment of borrowers by preventing 
taxable persons from evading the 
requirements of domestic tax legisla­
tion and is therefore essential in order 
to prevent infringements of national 
tax law and regulations. 
2. Articles 73b(l) and 73d(l)(b) of the 
Treaty (now Articles 56(1) EC and 
58(l)(b) EC) preclude legislation of a 
Member State which provides that, 
where a natural or legal person resident 
in that State concludes outside the 
national territory a loan agreement 
which is not set down in a written 
instrument and not recorded by an 
entry in the borrower's books and 
accounts, he is liable to pay stamp 
duty, whereas, in the case of a loan 
entered into in that Member State such 
duty is not payable even if the agree­
ment is not set down in a written 
instrument. 
Such legislation, which discriminates 
according to the place where the loan is 
contracted, is likely to deter residents 
from contracting loans with persons 
established in other Member States and 
therefore constitutes a restriction on 
the movement of capital. It cannot be 
justified by the need to ensure equal tax 
treatment of residents, since the discri­
mination entailed as between residents 
runs counter to that objective; nor can 
it be justified in terms of the objective 
of preventing fraud by borrowers who 
are resident in that State. 
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