Opinion of the Advocate-General



Opinion of the Advocate-General

1. In the present case the Finanzgericht (Finance Court) Hamburg, Germany, has asked the Court whether it is contrary to the freedom of establishment for Member State A to treat a currency loss resulting from the repatriation of start-up capital granted by a company established in that State to a permanent establishment in Member State B with a different currency as being part of the establishment’s profits and to exclude that loss, on the basis of a double taxation convention, from the company’s basis of assessment for tax in Member State A, even though the currency loss cannot form part of the establishment’s profits to be assessed for the purposes of tax in Member State B and thus cannot be taken into account in either Member State.

Relevant legislation

2. A company established in Germany is in principle subject to tax in Germany on its worldwide income. (2)

3. Pursuant to the 1925 Double Taxation Convention (‘the 1925 Convention’) between Germany and Italy, that rule is mitigated with regard to ‘income obtained through the activity of’ an Italian establishment (3) of a German company. According to Article 3(1) of the 1925 Convention, such income is subject to tax in Italy only.

4. Under German law, a person exempted by a double taxation convention from tax on ‘income deriving from a commercial activity’ of a foreign branch may deduct any loss arising in connection with that income in so far as such loss (i) could be deducted if the income were not so exempt and (ii) exceeds positive income which is so exempt. (4)

5. What counts as income and how income is to be ascertained is to be determined in accordance with the EStG. (5) That law provides that ‘[i]n so far as it has a direct economic link to tax-free income, expenditure may not be deducted as constituting operating expenditure for the determination of the basis of assessment’. (6)

Background to the main proceedings

6. According to the facts as stated by the referring court, the claimant before that court, Deutsche Shell GmbH (‘Deutsche Shell’), is a company which has its seat and principal place of business in Germany. In 1974, Deutsche Shell set up a branch in Italy. The proceeds generated by that branch were recorded, in accordance with Italian law, in a commercial and tax account drawn up in Italian currency and, for Deutsche Shell, in a separate German commercial and tax account.

7. Deutsche Shell provided its branch with start-up capital, which was entered in the separate German commercial and tax account with the DEM exchange rate obtaining at the time of each payment made in LIT. During the course of the branch’s lifespan, some of this start-up capital was repaid through the repatriation of profits, which were deducted from the adjusted start-up capital. These transactions were carried out in accordance with the exchange rate between the LIT and the DEM on the relevant transaction payment dates.

8. On 28 February 1992 Deutsche Shell transferred the assets of the branch to a wholly-owned subsidiary (Sierra Gas SrL.: ‘Sierra’) and closed down the branch. Deutsche Shell then sold the shares acquired through that transfer to an independent Italian company (Edison Gas SpA.: ‘Edison’).

9. This transaction was carried out in LIT. On 17 July 1992, the monies realised on the sale of the shares to Edison were transferred to Deutsche Shell. The total transferred, after conversion from LIT to DEM, was DEM 139 507 643 (approximately EUR 71.3 million). Of those funds before conversion, LIT 83 658 896 927 was used to repay the outstanding start-up capital. That amount produced the sum of DEM 111 868 677 (approximately EUR 57 milllion) on the basis of the exchange rate in force on 17 July 1992 (LIT 1000 = DEM 1.3372). When this sum was set against the historic acquisition costs of the repaid start-up capital the result for the claimant was a currency loss of DEM 122 698 502 (approximately EUR 62.7 million).

10. The profits from the transfer of the Italian branch to, and subsequent sale of shares in, Sierra were taxed in Italy. However, as this was done in LIT, the currency loss was not seen, and was not taken into account for the purposes of assessing the amount subject to Italian tax.

11. The claimant argued that, of the DEM 139 507 643 transferred, the currency loss of DEM 122 698 502 should be taken into account and set off against its profits when calculating its liability to tax in Germany. The German tax authorities (‘the Finanzamt’) refused to do so. The matter came before the Finanzgericht (Finance Court) Hamburg.

12. The Finanzgericht concluded that the Finanzamt had applied the 1925 Convention correctly when viewed from the perspective of national law. Given the terms of that Convention and its normal application in German law, it considered that there was no scope for the disputed DEM 122 698 502 exchange rate loss to be brought into the computation of Deutsche Shell’s tax liability in Germany. That was because that loss arose – albeit indirectly – ‘through the activity of’ the branch in Italy and was therefore regarded as part of its ‘income’. It could therefore be taken into account for tax purposes only in that Member State.

13. The Finanzgericht was unsure, however, whether its interpretation and application of the law were compatible with Community law and with the freedom of establishment guaranteed in Article 43 EC. It accordingly decided to stay the proceedings before it and referred the following questions to the Court of Justice for a preliminary ruling:

‘(1) Is it contrary to Article 52, in conjunction with Article 58, of the EC Treaty (now Article 43 EC, in conjunction with Article 48 EC) for the Federal Republic of Germany, as the State of origin, to treat a currency loss of a German parent company resulting from the repatriation of so-called start-up capital granted to an Italian establishment as being part of that establishment’s profits and to exclude that loss, on the basis of the exemption under Articles 3(1), 3(3) and 11.1(c) of the 1925 Double Taxation Convention between Germany and Italy, from the basis of assessment for German tax, even though the currency loss cannot form part of the establishment’s profits to be assessed for purposes of taxation in Italy and thus cannot be taken into account in either the State of origin or in the State in which the establishment is situate?

(2) If Question 1 is answered in the affirmative: is it contrary to Article 52, in conjunction with Article 58, of the EC Treaty (now Article 43 EC, in conjunction with Article 48 EC) if the currency loss mentioned above is to be included in the basis for assessment of the German tax but may be deducted as operating expenditure only in so far as no tax-free profits are obtained from the Italian establishment?’

A note on the facts of the case

14. In their observations, both the Finanzamt and Germany have disputed the facts as stated in the Finanzgericht’s reference. The unusual factual circumstances of this case prompted a question from the Court, in which Deutsche Shell and the Finanzamt were asked to provide details of the repatriation of profits.

15. The Finanzamt argues that that the description of the facts given by Deutsche Shell is largely fictive, as is the currency loss itself. The repatriated profits (which were taxed in Italy) constituted an internal flow of payments, made for the sake of transparency. The start-up capital was simply absorbed into the Italian branch’s operational capital. Since there was an internal compensation account, the monies paid to the parent company were not the same monies as those received as start-up capital.

16. The actual value of the capital assets was not reduced by the devaluation of the Italian lira, and the internal value of the start-up capital therefore remained constant when assessed in DEM and fluctuated when assessed in LIT, rather than the other way round.

17. Germany argues that Deutsche Shell is seeking to offset the taxation of the sales profit in Italy (which amounted to DEM 95 551 905 of tax) by a corresponding deduction of cherry-picked and wholly fictive ‘losses’ in Germany (which amounted to DEM 122 698 502). It contends that the claimant is seeking to divide, artificially, the profit received from the sale of the Italian establishment, by allocating some of it to a repatriation of start-up capital.

18. Deutsche Shell argues that there is nothing ‘fictive’ about a situation in which, due to the devaluation of the LIT against the DEM, a sum by way of start-up capital denominated in LIT halves in value, when converted back into DEM. The resulting currency loss of DEM 122 698 502 should have been taken into consideration when assessing Deutsche Shell’s global profits.

Conclusion on the dispute over the facts of the case

19. Germany has submitted that this case is completely without foundation, that the loss is fictitious, and that Deutsche Shell’s misstatement of the facts has produced the appearance of a problem which does not really exist. It therefore argues that the Court should declare the reference inadmissible.

20. However, despite the intensity of the argument over the facts, it has not been shown that the proceedings are manifestly without foundation. It seems to me that the true dispute between the parties may lie more in how particular facts should be interpreted than in whether the facts, as, such, exist.

21. Whether the facts are indeed as stated in the order for reference is a matter for the national court to determine. If the facts differ from those which have been set out before the Court of Justice, then it would be proper for the national court to take that difference into account when it ultimately decides on the outcome of the case. (7)

22. It is settled case-law (8) that, as Article 234 EC is based on a clear separation of functions between the national courts and the Court of Justice, the Court of Justice must take as a basis for its judgment in a reference for a preliminary ruling the facts as they are stated in the order for reference by the national court. The role of the Court of Justice in a reference under Article 234 EC is to provide guidance as to the law.

23. I therefore consider that the reference is admissible.

The first question

24. By its first question the referring court asks essentially whether it is contrary to Articles 43 EC and 48 EC for Member State A to treat a currency loss of a company established in its territory resulting from the repatriation of so-called start-up capital granted to a branch in Member State B as being part of the branch’s profits and to exclude that loss, on the basis of an exemption under a double taxation convention, from the company’s basis of assessment, even though the currency loss cannot form part of the branch’s profits to be assessed for purposes of taxation in Member State B, with the result that it cannot be taken into account in either Member State.

25. The problem arises because German law regards currency losses arising from the operation of a foreign branch of a German company – which includes losses arising from closing the branch – as related to the income from that branch. Where therefore such income is exempt from German tax pursuant to a double taxation convention, the currency loss cannot be brought into the company’s assessment to German tax. By definition the currency loss has no effect on the branch’s profits in Italy (since it only crystallises on conversion of funds transferred to the company into the currency of the Member State where the company is established). It can therefore be taken into account neither by the branch nor by the parent company.

26. It is settled case-law that freedom of establishment entails the right of companies formed in accordance with the law of a Member State and having their principal place of business within the Community to pursue their activities in another Member State, through a branch established there. (9)

27. Nor is it contentious that although the provisions concerning freedom of establishment are worded so as mainly to be aimed at ensuring equal treatment of foreign companies in a host Member State, those provisions also prohibit the State of origin from hindering the establishment in another Member State of a company incorporated under its legislation which comes within the definition contained in Article 48 EC. (10)

28. One way of approaching the reference for a preliminary ruling is to ask whether there is discrimination against parent companies in such a situation as compared with the treatment afforded to some appropriate comparator. A different, and perhaps more straightforward way of examining the same issue is to ask whether the German law constitutes a restriction on the right to freedom of establishment, and, if so, whether this is justified.

Discriminatory treatment

29. In establishing whether the German law discriminates against Deutsche Shell in such a way as to infringe its right to freedom of establishment, it is necessary to identify an appropriate comparator.

30. The Finanzgericht’s reference compares the position of the claimant (a German parent company which operates in DEM, which has set up an Italian establishment which operates in LIT) with the position of a hypothetical German parent company which operates in DEM, which ha s set up a German (sic) establishment which operates in LIT (or another currency). The Finanzgericht states that the currency losses incurred as a result of such operations would be deductible. However, it also appears to accept that there may be no comparable internal situation, as a German branch would never be given start-up capital in a foreign currency. A number of further hypothetical comparators have been suggested by the parties in their observations. (11)

31. The Commission takes the view that the German law results in discriminatory treatment. A loss for the parent company is not taken into account purely because that loss is a currency loss which has arisen from an establishment based abroad. The fact that this problem will only arise in a cross-border situation is no justification for refusing to take such a loss into account. If anything, companies in that position should benefit from special protection.

32. The Finanzamt, Germany and the Netherlands have taken the view that the absence of true internal comparators shows that there is no discrimination in the application of the German law.

33. I recall that an analogous problem arose in AMID . (12) In that case, Belgium argued that Belgian undertakings which had a branch in another Member State were not in the same position as undertakings that had concentrated all their operations in Belgium. The two categories of undertaking would always be in a different situation, so that the application of a tax system leading to different results would not necessarily constitute discrimination. The Court dismissed that argument, holding that those differences could not explain the difference in treatment between the two types of company. (13)

34. It would be possible to explore a number of hypothetical comparative situations between a German and an Italian establishment. The choice of comparator typically gives rise to an animated debate, since the decision as to whether there is (or is not) discriminatory treatment often turns upon the precise choice of comparator. The present discussion is, in that respect, rather reminiscent of the early case-law dealing with discrimination on grounds of sex, where much ink was spilt over the vexed question of the appropriate comparator for a pregnant woman. (14)

35. It seems to me that, despite its considerable academic and intellectual interest, in the specific circumstances of this case a lengthy discussion of discrimination is unnecessary. For the Commission, the decisive factor in reaching an answer to the preliminary question referred by the Finanzgericht is not whether there has been discriminatory treatment, but whether the German national law produces a situation which has a restrictive effect on those who wish to exercise their freedom of establishment.

36. I agree.

Restriction on freedom of establishment

37. Deutsche Shell argues that a regime under which there is no possibility of taking into account a currency loss in either the Member State of origin of the parent company, or the Member State in which a branch is established, restricts the parent company’s freedom of establishment. The Commission likewise submits that the parent company has suffered a loss which cannot be deducted in either Italy or Germany. Such a loss constitutes a restriction on freedom of establishment.

38. The Finanzamt, whilst strongly arguing that there is no discriminatory treatment, does not seek to argue that there is no restriction. It confines itself to the contention that Deutsche Shell has suffered no real loss. However, if the facts are as stated by the referring court, it would appear that Deutsche Shell has suffered a real disadvantage which would indeed restrict the exercise of the freedom of establishment.

39. Where a real disadvantage arises for taxpaying companies, it is important to determine its cause. That necessarily involves evaluating the tax system which gave rise to the disadvantage and distinguishing between a restriction prohibited by Article 43 EC and one which emerges as an unfavourable but natural consequence of disparities between the tax systems of different Member States. (15)

40. Both Germany and the Netherlands draw heavily on the Opinion of Advocate General Geelhoed in Case C-374/04 Test Claimants in Class IV of the ACT Group Litigation . (16) At points 37 to 39 of that Opinion (which were not specifically followed by the Court, although the Court reached the same conclusion), Advocate General Geelhoed classified a certain number of circumstances having a restrictive effect as ‘quasi-restrictions’. He argued that such quasi-restrictions arise merely as an inevitable consequence of the fact that two different legal systems exist side by side. Two examples that he gave were where the restrictions appeared as a result of disparities between national tax systems, and where the restrictions appeared as a result of the necessity of dividing tax jurisdiction between two Member States. He suggested that quasi-restrictions should not give rise to judicial intervention.

41. I shall consider this aspect later in examining the issue of justification. (17) Here it seems to me that what is decisive is whether a company is disadvantaged in a cross-border situation. The possibility that a company can be disadvantaged because a loss arising from an adverse currency fluctuation affecting transactions between it and a cross-border establishment is not taken into account when computing tax liability arises only where that company engages in cross-border establishment.

42. It is also doubtful whether the present circumstances arise solely because of the need for co-operation between the German and Italian fiscal regimes. The disadvantage arises as a result of a currency loss that can be seen only in Germany. It can therefore be taken into account only by the German fiscal authorities. Therefore the disadvantage suffered by Deutsche Shell is attributable to the decisions of the German authorities. These decisions are, it is true, carried out within the framework of the 1925 Convention, but it does not follow from that that the differences merely flow from the co-existence of two tax systems.

43. Such a situation increases the risks faced by a company which wishes to create a branch in a Member State which uses a different currency. Not only does the parent company face the normal risks associated with the success of the branch; it will in such circumstances also have to face an increased level of risk in providing start-up capital to the branch. (18)

44. As a consequence of exercising its right to freedom of establishment, Deutsche Shell has suffered a loss which cannot be taken into account in the valuation of its global profits for the purposes of tax assessment. This result indisputably makes the exercise of the right of establishment less attractive. I conclude that the circumstances of this case give rise to a restriction on freedom of establishment within the meaning of Articles 43 and 48 EC.

Justification

45. It is settled case-law that a restriction on the right to exercise one’s freedom of establishment may be justifiable in certain circumstances.

46. However, such a restriction is permissible only if it pursues a legitimate objective compatible with the Treaty and is justified by imperative reasons in the public interest.

47. Furthermore, it must be shown that the application of the restrictive measure is appropriate in order to ensure the attainment of this legitimate objective and does not go beyond what is necessary to attain that objective. (19)

48. In their observations, the parties to the present proceedings have suggested a number of possible justifications for the tax treatment here at issue. I will address each in turn.

Balanced allocation of taxing powers

49. Both Germany and the Netherlands draw the Court’s attention to the division of competences between the German and Italian tax authorities. Germany also invokes national sovereignty as a justification. It states that the arrangements put in place by the 1925 Convention are a logical way to partition German and Italian fiscal competences in cross-border situations. The currency loss, since it derived from Italy, fell under Italian competence and should have been taken into account in that State.

50. However, as both Deutsche Shell and the Commission have highlighted in their observations, Italy operated in LIT in 1992 and all computations for tax purposes would, accordingly, have been carried out solely in LIT. The currency loss only appeared when the sums in LIT were converted to DEM. It follows that this argument is inherently flawed and must be rejected as a justification.

51. Furthermore, totally excluding a loss which is invisible in one of the two Member States concerned and which cannot be considered to be income of the branch in the normal sense of that term is not a proportionate application of Member States’ power to allocate fiscal competences between themselves.

Fiscal coherence

52. Germany and the Netherlands submit that the coherence of the German fiscal system might be compromised if Deutsche Shell were permitted to take a currency loss into account when calculating its global profits for taxation in Germany.

53. Restrictive measures may be justified by the need to preserve the coherence of a national tax system. However, in order to justify such a measure, there must be a direct link between the financial disadvantage suffered by a parent company, and a corresponding tax advantage, which offsets the disadvantage suffered by that company. (20) The Court has interpreted this justification strictly. (21)

54. Is there an advantage which offsets the disadvantage suffered by Deutsche Shell in this case? Germany argues that the advantage of the existing system is that a profit arising from a favourable shift in exchange rates would also not be taken into consideration.

55. However, Deutsche Shell has suffered an exchange rate loss. It cannot transform that into an exchange rate profit. There is thus no compensatory advantage being offered to the claimant. In that respect, the present case is analogous to Case C-385/00 de Groot . (22) In both cases the claimant cannot claim any fiscal advantage, and is burdened instead with the impossibility of deducting a loss.

56. Germany’s argument that those on the right side of a shift in exchange rates benefit under the present system fails to take into account the need for ‘advantages’ to accrue to those who suffer a burden as a consequence of the restrictive measure. Tax ‘advantages’ of the kind that are generated here are not true fiscal advantages, but are instead a double inequality.

57. In AMID , Belgium likewise argued that the inequalities created by the Belgian tax legislation were justified as they would benefit a company which was in the inverse position to AMID. Such a hypothetical company would be in a better position than a domestic company with no establishments in Luxembourg. The Court rejected that argument. (23)

58. The Commission argues that fiscal coherence would, indeed, be better preserved by taking the effect of an exchange rate fluctuation into account. Both the Commission and Deutsche Shell emphasise that, were the exchange rate losses instead an exchange rate profit, failing to include that element in the tax computation would make the resulting financial gain ‘argent blanc’. They also point out that the existing system disproportionately benefits a company which gains from exchange rate fluctuation, whilst offering no compensatory advantage to a company which suffers financially from an adverse exchange rate fluctuation. That cannot be seen as coherent.

59. I agree with both these observations. I do not consider that the results generated in a situation such as the present by the German tax system can be justified by reference either to the balanced allocation of taxing powers between Member States or by the need to preserve fiscal coherence. If ( quod non ) either justification were in principle made out, I would in any event regard the total exclusion of losses caused by exchange rate fluctuations as disproportionate.

60. I therefore suggest that the Court answer the first question posed by the Finanzgericht in the affirmative.

The second question

61. If (as I propose) the first question is answered in the affirmative, it becomes necessary to consider the referring court’s second question, which concerns the extent to which the State of origin may exclude the possibility of deducting a currency loss arising on the closure of an establishment in another Member State. Would a qualified right of deduction, which included a currency loss in the basis for assessment in the State of origin, but allowed it to be deducted as operating expenditure only in so far as no tax-free profits were obtained from the branch in the other Member State, (24) be sufficient to ensure compliance with Article 43 EC?

62. The reference from the Finanzgericht states that operating expenditure is precluded from being deducted from the profits of the parent company if it has a direct economic link to tax-free income. In the opinion of the Finanzgericht, the income from the sale of Deutsche Shell’s shares to Edison is tax-free in Germany, as it has already been taxed in Italy.

63. However, the Finanzgericht does not mention that the currency loss was not taken into account in assessing this taxation.

64. The referring court also took the view that there was a clearly defined direct connection between the currency loss and Deutsche Shell’s tax-free profit derived from its branch in Italy. It explains that, even if it were possible to include the currency loss in the basis for the assessment of German tax, the effect of the relevant legislation (25) is that the currency loss would be deductible only in so far as it exceeded the branch’s tax-free profits. As the currency loss was less than the total tax-free profits obtained from the transfer of the assets of the branch to Sierra and the sale of the shares in that compa ny, the referring court reasons that German law would operate to exclude the Finanzamt from taking into account this currency loss.

65. If this is the case, the referring court is interested in whether Article 43 EC, read with Article 48 EC, precludes such a result.

66. The observations addressing this question are scant. Deutsche Shell and the Commission confine themselves to the first question, adding only that if the answer to the first question is yes, then an affirmative answer should also be given to the second question.

67. Germany states that this is not a restriction on freedom of establishment, and that such a restriction as is imposed is limited to the case where a loss has a direct economic link with non-taxable revenues. The Netherlands has not dealt specifically with the second question.

68. The Finanzamt argues that these losses cannot be treated within Germany as isolated losses for the purposes of the 1925 Convention. Such a conclusion is precluded by the wording of the Convention, which focuses on income. The currency losses formed only a portion of the Italian branch’s profit and loss account. As Deutsche Shell had achieved an overall profit for 1992 through its Italian branch, even when the currency loss is taken into account, no deductible loss under Paragraph 2a(3) of the EStG ever arose.

69. As I have already indicated, however, the currency losses were not apparent in LIT, and were therefore not taken into account in the Italian tax assessment of the branch’s profits.

70. It therefore seems perverse to construe the EStG in a way that classifies the currency loss itself as part of (or directly linked to) the profits of the establishment which were tax-free in Germany.

71. To address this issue from the perspective offered by the referring court in its second question misses the crucial point of the case, which is that the German and Italian systems have created a regime in which a currency loss cannot be taken into account by either tax authority. In my view, a proper interpretation of Article 43 EC read with Article 48 EC requires such a loss to be taken into account in its entirety (like any other operating loss). Given that it was invisible during the Italian tax computation in LIT, it follows that it must be so taken into account during the German tax calculation of Deutsche Shell’s global profits.

72. I therefore propose that the second question also be answered in the affirmative.

Conclusion

73. In the light of the above, I consider that the questions referred by the Finanzgericht Hamburg should be answered as follows:

(1) It is contrary to Article 43 EC, in conjunction with Article 48 EC, for the Federal Republic of Germany, as the State of origin, to treat a currency loss of a German parent company resulting from the repatriation of so-called start-up capital granted to an Italian establishment as being part of that establishment’s profits and to exclude that loss, on the basis of the exemption under Articles 3(1), 3(3) and 11.1(c) of the 1925 Double Taxation Convention between Germany and Italy, from the basis of assessment for German tax, even though the currency loss cannot form part of the establishment’s profits to be assessed for purposes of taxation in Italy and thus cannot be taken into account in either the State of origin or in the State in which the establishment is situate.

(2) It is contrary to Article 43 EC, in conjunction with Article 48 EC, if the currency loss mentioned above is to be included in the basis for assessment of the German tax but may be deducted as operating expenditure only in so far as no tax-free profits are obtained from the Italian establishment.

(1) .

(2) – Paragraph 1(1) of the Körperschaftsteuergesetz (Corporate tax code) 1992 (‘KStG’).

(3) – For simplicity, I will use the term ‘branch’ in this opinion when referring to such a permanent establishment.

(4) – Paragraph 2a(3) of the Einkommensteurergesetz (Income tax code) 1992 (‘EStG’), first sentence.

(5) – Paragraph 8(1) of the KStG.

(6) – Paragraph 3c.

(7) – For further guidance see the Information note on references from national courts for a preliminary ruling (OJ 2005 C 143, pp. 1 and 2).

(8) – See Case C-30/93 AC-ATEL Electronics Vertriebs [1994] ECR I-2305, paragraphs 16 and 17; Case C-326/96 Levez [1998] ECR I-7835, paragraphs 25 and 26; Case 17/81 Pabst & Richarz [1982] ECR 1331, paragraph 12; Case C‑435/97 World Wildlife Fund (WWF) and Others [1999] ECR I-5613.

(9) – Case C-141/99 AMID [2000] ECR I-11619, paragraph 20, citing Case 270/83 Commission v France [1986] ECR 273, paragraph 18; Case C-330/91 Commerzbank [1993] ECR I-4017, paragraph 13.

(10) – AMID , paragraph 21, citing Case 81/87 Daily Mail and General Trust [1988] ECR 5483.

(11) – Thus Deutsche Shell takes as its model for comparison a German parent company with an establishment in Germany, which operates in more than one currency. It argues that fluctuations in the value of the second currency would be taken into account when calculating such a company’s taxable income in Germany.

(12) – Cited in footnote 9.

(13) – See paragraphs 25 and 28.

(14) – See Case C-177/88 Dekker [1990] ECR I-3941, paragraphs 10 to 14 and the Opinion of Advocate General Darmon, at points 23 to 25.

(15) – In this respect see Case C-336/96 Gilly [1998] ECR I-2793 in which the Court held that the latter does not amount to a restriction requiring justification.

(16) – [2006] ECR I-11673

(17) – See points 45 et seq. below, in particular points 49 and 50.

(18) – See, by analogy, the Opinion of Advocate General Lenz in Case C-1/93 Halliburton [1994] ECR I-1137, point 18 (although that was a clear discrimination case, the proposition is general).

(19) – Case C-446/03 Marks & Spencer [2005] ECR I-10837, paragraph 35, referring to Case C-250/95 Futura Participations and Singer [1997] ECR I-2471, paragraph 26, and Case C-9/02 de Lasteyrie du Saillant [2004] ECR I-2409, paragraph 49. See also Case C-196/04 Cadbury [2006] ECR I-7995, paragraph 47.

(20) – Case C-204/90 Bachmann [1992] ECR I-249 and Case C‑300/90 Belgium [1992] ECR I-305; Case C‑484/93 Svensson and Gustavsson [1995] ECR I-3955, paragraph 18; Case C-264/96 ICI [1998] ECR I-4695, paragraph 29; and Case C-319/02 Manninen [2004] ECR I‑7477, paragraph 42.

(21) – For example, it was not accepted in Case C-347/04 Rewe [2007] ECR I-0000; Case C-152/03 Ritter-Coulais [2006] ECR I-1711; de Lasteyrie du Saillant , cited in footnote 19; Case C-209/01 Schilling [2003] ECR I-13389; Case C-436/00 X and Y [2002] ECR I-10829 or Case C-478/98 Commission v Belgium [2000] ECR I-7587.

(22) – [2002] ECR I-11819.

(23) – See paragraphs 24 to 28.

(24) – Under Paragraph 3c of the EStG; see point 5 above.

(25) – Set out in points 4 and 5 above.