Keywords

Summary



Keywords

1. Free movement of capital – Restrictions – Tax legislation – Income tax – National legislation requiring non-resident taxpayers to appoint a tax representative

(Art. 56 EC; Council Directive 77/799)

2. International agreements – Agreement on the European Economic Area – Free movement of capital – Restrictions – Tax legislation – Income tax – National legislation requiring non-resident taxpayers to appoint a tax representative

(EEA Agreement, Art. 40; Council Directives 77/799 and 2008/55)

Summary

1. Although ensuring the effectiveness of fiscal supervision and the prevention of tax avoidance may constitute an overriding requirement of general interest capable of justifying a restriction of the exercise of the fundamental freedoms guaranteed by the Treaty, such justification can be accepted only if the legislation is aimed at wholly artificial arrangements the objective of which is to circumvent the tax laws, which precludes any general presumption of tax evasion. A general presumption of tax avoidance or tax evasion cannot justify a fiscal measure which compromises the objectives of the Treaty. An obligation to appoint a tax representative imposed on all non-resident taxpayers who are required to submit a tax return imposes in respect of an entire category of taxpayers, solely by reason of the fact that they are not residents, a presumption of tax avoidance or tax evasion which cannot on its own justify the compromising of the objectives of the Treaty.

Such an obligation constitutes a restriction of the free movement of capital laid down in Article 56 EC which could not be regarded as justified, for it goes beyond what is necessary to achieve that objective and it has not been established that the mechanisms of mutual assistance in the field of direct and indirect taxation available to the Member States under Directive 77/799 concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation are not sufficient for the attainment of that objective.

Consequently, a Member State which maintains in force tax legislation which requires non-residents to appoint a tax representative in that Member State if they are in receipt of income requiring the submission of a tax return, has failed to fulfil its obligations under Article 56 EC.

(see paras 38, 42-43, 53, 61, operative part 1)

2. If restrictions on the free movement of capital between nationals of States party to the Agreement on the European Economic Area must be assessed in the light of Article 40 of and Annex XII to that agreement, those stipulations have the same legal scope as those of the substantially identical provisions of Article 56 EC. However, the case-law concerning restrictions of the exercise of freedom of movement within the Union cannot be transposed in its entirety to movements of capital between Member States and non-member countries, for such movements take place in a different legal context.

Consequently, although the obligation to appoint a tax representative imposed on non-residents by the legislation of a Member State constitutes an unjustified restriction in the light of Article 56 EC, that does not mean that such a restriction cannot be justified in the light of Article 40 of the EEA Agreement.

Since, first, the framework of cooperation between the competent authorities of the Member States established by Directive 77/799 concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation and by Directive 2008/55 on mutual assistance for the recovery of claims relating to certain levies, duties, taxes and other measures does not exist between those authorities and the competent authorities of a non-Member State when the latter has not entered into any undertaking of mutual assistance and, second, the agreements linking the Member State in question with States belonging to the EEA which are not Member States of the Union do not include sufficient mechanisms for the exchange of information to verify and monitor the returns submitted by taxable persons residing in those States, the obligation to appoint a tax representative, in so far as it concerns taxpayers residing in States party to the EEA Agreement which are not Members of the Union, does not go beyond what is necessary to achieve the objective of ensuring the effectiveness of fiscal supervision and preventing tax avoidance.

(see paras 51-52, 54-57)