Keywords

Summary



Keywords

1. Freedom of movement for persons – Freedom of establishment – Restrictions

(Arts 43 EC and 48 EC)

2. Freedom of movement for persons – Freedom of establishment – Restrictions

(Arts 43 EC and 48 EC)

Summary

1. The possible double taxation arising from the liability to pay, on the one hand, a vocational training levy on the basis of a calculation that takes account of the wage costs in respect of a branch in another Member State and, on the other, contributions relating to that Member State’s public policy on employment in respect of the workers employed in that branch does not, on its own, constitute a restriction prohibited under the Treaty, since such a fiscal disadvantage results from the exercise in parallel by two Member States of their fiscal sovereignty. European Union law, in the current state of its development and in such a situation, does not lay down any general criteria for the attribution of areas of competence between the Member States in relation to the elimination of double taxation within the European Union. It follows from this that, in the current state of the development of European Union law, the Member States enjoy a certain autonomy in this area provided they comply with European Union law, and are not obliged therefore to adapt their own tax systems to the different systems of taxation of the other Member States in order, inter alia, to eliminate the double taxation arising from the exercise in parallel by those States of their fiscal sovereignty.

(see paras 25, 27-29)

2. Articles 43 EC and 48 EC preclude legislation of a Member State under which an undertaking, which has its seat in that State, is obliged to pay a levy such as the vocational training levy, the amount of which is calculated on the basis of its wage costs including those wage costs incurred at a branch of that undertaking established in another Member State if, in practice, such an undertaking is prevented, with regard to that branch, from benefiting from the opportunities provided for in that legislation of reducing that levy or from having access to those opportunities.

The difficulty in practice for a company that has its seat in the national territory of relying, with regard to a place of business situated in another Member State, on the means provided for in national legislation to reduce its gross liability to the vocational training levy places that company in a less favourable position than a company which restricts its activity to national territory alone. That difficulty may, thus, deter that company from taking advantage of the freedom of establishment under Articles 43 EC and 48 EC and amounts to a restriction of that freedom.

Such a restriction cannot be justified by the need to preserve the coherence of a system such as the vocational training levy, since the fact that, for a company with its seat in that national territory, all the staff belonging to a place of business situated in another Member State are taken into account does not seem to be offset by any opportunity, in practice, for that company to benefit from the means provided for in the national legislation to reduce gross liability to that levy with regard to training costs incurred in such a place of business. In addition, as regards the objective of improving the level of training of workers in the national employment market, while an offsetting of the costs of training paid outside the Member State against gross liability to that levy could, admittedly, bring about a reduction in the revenue intended for the attainment of that objective, such a consideration is, however, purely economic and cannot, therefore, according to settled case-law, constitute an overriding reason in the public interest.

(see paras 43-44, 47-49, operative part)