Judgment of the Court (Second Chamber) of 25 April 2013 — Commission v Spain

(Case C-64/11)

‛Failure of a Member State to fulfil its obligations — Freedom of establishment — Article 49 TFEU — Restrictions — Tax legislation — Immediate taxation of unrealised gains — Transfer of the place of residence of a company, termination of the activities of a permanent establishment or transfer of the assets of that establishment’

1. Actions for failure to fulfil obligations — Subject-matter of the dispute — Determination during the pre-litigation procedure — Subsequent enlargement — Not permissible (Art. 258 TFEU) (see paras 13, 14)

2. Actions for failure to fulfil obligations — Subject-matter of the dispute — Determination during the pre-litigation procedure — Initial complaints set out in greater detail in the application instituting proceedings — Lawfulness (Art. 258 TFEU) (see paras 18, 19)

3. Freedom of movement for persons — Freedom of establishment — Provisions of the Treaty — Scope (Art. 49 TFEU) (see paras 23-26)

4. Freedom of movement for persons — Freedom of establishment — Restrictions — Fiscal legislation — Transfer of the place of residence of a company established under national law, or transfer of the assets of a permanent establishment of a non-resident company, to another Member State — National legislation providing for the immediate taxation of unrealised capital gains on transferred assets — Unlawful (Art. 49 TFEU) (see paras 27-29, 31-37, 39, operative part)

Re:

Failure of a Member State to fulfil its obligations — Infringement of Article 49 TFEU and Article 31 EEA — Tax provisions pursuant to which companies ceasing to have their tax residence in Spain or transferring their assets to another State must immediately pay an exit tax.

Operative part

The Court:

1. Declares that, by adopting Article 17(1)(a) and (c) of the re-cast text of the Law on corporate taxation, approved by Royal Legislative Decree 4/2004 of 5 March 2004 (Real Decreto Legislativo 4/2004 por el que se aprueba el Texto Refundido de la Ley del Impuesto sobre Sociedades), pursuant to which, in the case of a transfer to another Member State of the place of residence of a company established in Spain and of the assets of a permanent establishment situated in Spain, unrealised gains form part of the tax base for the financial year, whereas those assets have no immediate consequences in terms of tax if those transactions tax place in Spanish territory, the Kingdom of Spain has failed to fulfil its obligations under Article 49 TFEU;

2. Dismisses the action as to the remainder;

3. Orders the Kingdom of Spain to pay its own costs;

4. Orders the Federal Republic of Germany, the French Republic, the Italian Republic, the Kingdom of the Netherlands, the Portuguese Republic, the Republic of Finland, the Kingdom of Sweden, and the United Kingdom of Great Britain and Northern Ireland to pay their own costs.

Judgment of the Court (Second Chamber) of 25 April 2013 — Commission v Spain

(Case C-64/11)

‛Failure of a Member State to fulfil its obligations — Freedom of establishment — Article 49 TFEU — Restrictions — Tax legislation — Immediate taxation of unrealised gains — Transfer of the place of residence of a company, termination of the activities of a permanent establishment or transfer of the assets of that establishment’

1. Actions for failure to fulfil obligations — Subject-matter of the dispute — Determination during the pre-litigation procedure — Subsequent enlargement — Not permissible (Art. 258 TFEU) (see paras 13, 14)

2. Actions for failure to fulfil obligations — Subject-matter of the dispute — Determination during the pre-litigation procedure — Initial complaints set out in greater detail in the application instituting proceedings — Lawfulness (Art. 258 TFEU) (see paras 18, 19)

3. Freedom of movement for persons — Freedom of establishment — Provisions of the Treaty — Scope (Art. 49 TFEU) (see paras 23-26)

4. Freedom of movement for persons — Freedom of establishment — Restrictions — Fiscal legislation — Transfer of the place of residence of a company established under national law, or transfer of the assets of a permanent establishment of a non-resident company, to another Member State — National legislation providing for the immediate taxation of unrealised capital gains on transferred assets — Unlawful (Art. 49 TFEU) (see paras 27-29, 31-37, 39, operative part)

Re:

Failure of a Member State to fulfil its obligations — Infringement of Article 49 TFEU and Article 31 EEA — Tax provisions pursuant to which companies ceasing to have their tax residence in Spain or transferring their assets to another State must immediately pay an exit tax.

Operative part

The Court:

1. Declares that, by adopting Article 17(1)(a) and (c) of the re-cast text of the Law on corporate taxation, approved by Royal Legislative Decree 4/2004 of 5 March 2004 (Real Decreto Legislativo 4/2004 por el que se aprueba el Texto Refundido de la Ley del Impuesto sobre Sociedades), pursuant to which, in the case of a transfer to another Member State of the place of residence of a company established in Spain and of the assets of a permanent establishment situated in Spain, unrealised gains form part of the tax base for the financial year, whereas those assets have no immediate consequences in terms of tax if those transactions tax place in Spanish territory, the Kingdom of Spain has failed to fulfil its obligations under Article 49 TFEU;

2. Dismisses the action as to the remainder;

3. Orders the Kingdom of Spain to pay its own costs;