Case C‑299/13

Isabelle Gielen

v

Ministerraad

(Request for a preliminary ruling from the Grondwettelijk Hof)

‛(Taxation — Directive 2008/7/EC — Articles 5(2) and 6 — Indirect taxes on the raising of capital — Tax on the conversion of bearer securities into registered securities or dematerialised securities)’

Summary — Judgment of the Court (Fifth Chamber), 9 October 2014

Tax provisions — Harmonisation of laws — Indirect taxes on the raising of capital — National legislation establishing a tax on the conversion of bearer securities into registered securities or dematerialised securities — Not permissible — Justification — None

(Council Directives 2008/7, Arts 5(2) and 6(1), and 69/335, Arts 11(a) and 12)

Article 5(2) of Directive 2008/7 concerning indirect taxes on the raising of capital must be interpreted as precluding the taxation of the conversion of bearer securities into registered securities or dematerialised securities. Such a tax cannot be justified under Article 6 of that directive.

Firstly, while it is true that that provision does not expressly mention the conversion of stocks, the fact remains that the conversion of bearer stocks into dematerialised securities or registered securities, which was made compulsory by national legislation on the abolition of bearer securities, falls within the issue of stocks within the meaning of that provision. Therefore, by establishing a tax on that conversion, that legislation amounts in reality to taxing the very issue of that security as it forms an integral part of an overall transaction with regard to the raising of capital, thereby undermining the effectiveness of Article 5(2)(a) of the directive.

Secondly, as regards the possible justification of such a tax under Article 6(1) of Directive 2008/7, such a justification cannot be accepted either, given that that provision, as an exception to the non-imposition rule, is to be strictly interpreted and cannot therefore apply in the case of a tax on the conversion of bearer stocks. In the course of that conversion, bearer stocks are converted into dematerialised securities or registered securities without a transfer of a right from a first holder to a second holder.

(see paras 25-31, operative part)

Case C‑299/13

Isabelle Gielen

v

Ministerraad

(Request for a preliminary ruling from the Grondwettelijk Hof)

‛(Taxation — Directive 2008/7/EC — Articles 5(2) and 6 — Indirect taxes on the raising of capital — Tax on the conversion of bearer securities into registered securities or dematerialised securities)’

Summary — Judgment of the Court (Fifth Chamber), 9 October 2014

Tax provisions — Harmonisation of laws — Indirect taxes on the raising of capital — National legislation establishing a tax on the conversion of bearer securities into registered securities or dematerialised securities — Not permissible — Justification — None

(Council Directives 2008/7, Arts 5(2) and 6(1), and 69/335, Arts 11(a) and 12)

Article 5(2) of Directive 2008/7 concerning indirect taxes on the raising of capital must be interpreted as precluding the taxation of the conversion of bearer securities into registered securities or dematerialised securities. Such a tax cannot be justified under Article 6 of that directive.

Firstly, while it is true that that provision does not expressly mention the conversion of stocks, the fact remains that the conversion of bearer stocks into dematerialised securities or registered securities, which was made compulsory by national legislation on the abolition of bearer securities, falls within the issue of stocks within the meaning of that provision. Therefore, by establishing a tax on that conversion, that legislation amounts in reality to taxing the very issue of that security as it forms an integral part of an overall transaction with regard to the raising of capital, thereby undermining the effectiveness of Article 5(2)(a) of the directive.

Secondly, as regards the possible justification of such a tax under Article 6(1) of Directive 2008/7, such a justification cannot be accepted either, given that that provision, as an exception to the non-imposition rule, is to be strictly interpreted and cannot therefore apply in the case of a tax on the conversion of bearer stocks. In the course of that conversion, bearer stocks are converted into dematerialised securities or registered securities without a transfer of a right from a first holder to a second holder.

(see paras 25-31, operative part)