OPINION OF ADVOCATE GENERAL

CRUZ VILLALÓN

delivered on 16 February 2012 ( 1 )

Case C-558/10

Michel Bourgès-Maunoury,

Marie-Louise Heintz

v

Direction des services fiscaux d’Eure-et-Loir

(Reference for a preliminary ruling from the Tribunal de grande instance de Chartres (France))

‛Protocol on the privileges and immunities of the European Communities — Officials and servants of the European Union — Article 13 — Tax on the income of natural persons — Exemption from national taxes on salaries paid by the European Union — Wealth tax (‘Impôt de solidarité sur la fortune’) — Inclusion of exempt Community income in the calculation of the cap — Hardship clause’

1. In this case, a question has been referred to the Court for a preliminary ruling on the compatibility with European Union primary law of a national provision on the procedure for calculating a wealth tax, in this instance the French ‘impôt de solidarité sur la fortune’ (the ‘wealth tax’). That tax is calculated using a ‘capping’ mechanism by means of which it is possible to take into consideration all income accruing to taxable persons, without excluding salaries, wages and emoluments paid by the European Union to its officials and other servants.

2. This case thus provides the Court with the opportunity to give further clarification to the meaning and scope of the second paragraph of Article 13 of the Protocol on the Privileges and Immunities of the European Communities ( 2 ) and, more specifically, to its settled case-law to the effect that that provision precludes income of Community origin from being taxed, even indirectly.

3. Since the relevant case-law of the Court does not provide us with the precedents that would make it possible to give an immediate reply tailored to the specific nature of the case (a wealth tax capped at a percentage of the taxable person’s income), I shall ask the Court to approach the question raised by establishing the meaning and purpose of the national provision at issue, while proposing that it should ultimately leave to the national court the task of giving a ruling in this regard.

I – Legal context

A – European Union law

4. Article 13 of the Protocol on Privileges and Immunities, in the version in force at the time of the facts at issue in the main proceedings, provides: ‘Officials and other servants of the Communities shall be liable to a tax for the benefit of the Communities on salaries, wages and emoluments paid to them by the Communities, in accordance with the conditions and procedure laid down by the Council, acting on a proposal from the Commission. They shall be exempt from national taxes on salaries, wages and emoluments paid by the Communities.’

B – National law

5. The wealth tax, ( 3 ) which succeeded the ‘impôt annuel sur les grandes fortunes’, ( 4 ) was introduced by the Law on Finances for 1989. ( 5 ) At the time of the facts of the dispute in the main proceedings, the wealth tax was governed by the provisions of Articles 885A to 885X of the Code général des impôts (General Tax Code) (‘the CGI’).

6. Article 885A of the CGI, in the version applicable at the time of the facts of the dispute in the main proceedings, ( 6 ) provided: ‘The following shall be liable to the annual wealth tax where the value of their assets exceeds the upper limit of the first band in the scale laid down in Article 885U: 1. Natural persons whose residence for tax purposes is in France, on their assets situated in France or outside France. … 2. Natural persons whose residence for tax purposes is outside France, on their assets situated in France. Except in the cases provided for in Article 6(4)(a) and (b), married couples shall be taxed jointly. The conditions governing liability to taxation shall be assessed on 1 January of each year. … The business assets defined in Articles 885N, 885O, 885Oa, 885Ob, 885Oc, 885Od, 885P and 885R shall not be included in the basis of assessment for the wealth tax.’

7. The wealth tax uses a capping mechanism and a mechanism for capping the cap, described in Article 885Va of the CGI. In the version applicable at the time of the facts at issue in the dispute in the main proceedings, ( 7 ) that article was worded as follows: ‘Wealth tax owed by a taxpayer resident for tax purposes in France shall be reduced by the difference between, on the one hand, the total amount of that tax and of the tax due in France and overseas on income and proceeds arising in the previous year, calculated before the offsetting of tax credits and deductions of tax other than by way of discharge, and, on the other hand, 85% of the total amount of income net of business expenses arising in the previous year after deduction only of the category-based tax losses which may be offset under Article 156, as well as income exempt from income tax generated in the same year in France or outside France and proceeds liable to a withholding tax in discharge of tax liability. That reduction may not exceed a sum equal to 50% of the amount of contribution resulting from the application of Article 885V or, if greater, the amount of tax corresponding to taxable assets equal to the upper limit of the third band in the scale laid down in Article 885U. Capital gains shall be determined without taking into account the thresholds, reductions and rebates provided for in this Code. For the purposes of applying the first paragraph, where income tax has been charged on income accruing to persons whose assets are not included in the basis of assessment of the wealth tax owed by the person liable, it shall be reduced by the value of that income accruing to those persons as a percentage of their total income.’

II – Background to the dispute in the main proceedings

8. It is apparent from the order for reference and from the observations submitted to the Court that Mr Bourgès-Maunoury and Ms Heintz, the wife of Mr Bourgès-Maunoury, are former officials of the European Commission and the Council of the European Union respectively. Ms Heintz has been in receipt of a retirement pension since 1 September 2004. Mr Bourgès-Maunoury received a compensatory allowance on termination of service from 1 January 2004 to 30 November 2008 and has also been in receipt of a retirement pension since 1 December 2008.

9. The allowance and pensions thus paid by the European Union are, pursuant to Article 13 of the Protocol on Privileges and Immunities, liable to a tax for the benefit of the European Union and exempt from national taxes on income.

10. Since Mr Bourgès-Maunoury and Ms Heintz are resident in France, they are liable to the wealth tax, in accordance with Article 885A of the CGI, and, consequently, filed wealth tax declarations for the years 2002 to 2007.

A – The wealth tax declarations for 2002 to 2004, 2006 and 2007

11. Mr Bourgès-Maunoury and Ms Heintz’ joint annual declarations which are at issue in the main case relate to the years 2002 to 2004, 2006 and 2007. The outcome of the declaration for 2005, which, as will be seen, is a special case, has been entirely different.

12. In their declarations for the years 2002 to 2004, 2006 and 2007, Mr Bourgès-Maunoury and Ms Heintz did not include the allowance and pension paid by the European Union when calculating the wealth tax cap provided for in Article 885Va of the CGI.

13. On 29 May 2008, the French tax administration sent them a proposed adjustment to their wealth tax for those years, on the ground that their Community income should have been taken into account in the calculation of the wealth tax cap, which proposal was confirmed by decision of 1 September 2008.

14. On 19 January 2009, the French tax administration issued two recovery notices against Mr Bourgès-Maunoury and Ms Heintz in respect of the wealth tax contribution due for the years 2002 to 2004, 2006 and 2007. The appeal which Mr Bourgès-Maunoury and Ms Heintz brought against those notices on 4 January 2009 was dismissed by decision of the French tax administration of 18 February 2009.

15. Then, on 16 April 2009, Mr Bourgès-Maunoury and Ms Heintz brought before the Tribunal de grande instance de Chartres (Regional Court, Chartres) an action seeking an order, on the one hand, annulling the French tax administration’s decision of 18 February 2009 expressly dismissing their appeal and annulling the two recovery notices issued against them on 19 January 2009 for the years 2002 to 2004, 2006 and 2007 and, on the other hand, cancelling the wealth tax contributions recovered in the amount of EUR 15 663.

B – The wealth tax declaration for 2005

16. Mr Bourgès-Maunoury and Ms Heintz did not, however, request that the wealth tax cap be applied to 2005 and, so, on 7 July 2006, they submitted an amended declaration incorporating that calculation for that year and requested the reimbursement of an overpayment of EUR 6 239 on a declared amount of tax of EUR 8 861.

17. Following the rejection of that request by the French tax administration, on 27 December 2006, Mr Bourgès-Maunoury and Ms Heintz brought an action against that rejection before the Tribunal de grande instance de Chartres. Under Article 24 of the Staff Regulations of Officials of the European Communities, they also requested the assistance of the Commission in this regard, which was granted to them by decision of 6 March 2007.

18. By judgment of 10 October 2007, the Tribunal de grande instance de Chartres dismissed their application.

19. They also lodged a complaint with the Commission, which informed them by letter of 14 January 2008 that it considered that there had been an infringement of Article 13 of the Protocol on Privileges and Immunities and that it was registering their complaint as a case of infringement.

20. By letter of 15 April 2008, the Commission informed the French authorities of its doubts about the compatibility with the second paragraph of Article 13 of the Protocol on Privileges and Immunities of including income of Community origin in the calculation of the wealth tax cap.

21. By judgment of 27 November 2008, the Cour d’appel de Versailles (Court of Appeal, Versailles) set aside the judgment of the Tribunal de grande instance de Chartres of 10 October 2007 rejecting their application in respect of the year 2005.

22. By judgment of 19 January 2010, ( 8 ) the Cour de cassation (Court of Cassation) dismissed the appeal lodged by the French tax administration against that judgment of the Cour d’appel de Versailles.

23. The Cour de Cassation considered that, since the Cour d’appel de Versailles had found that including the pensions and allowances received from the European Union in the calculation of the cap of 85% of total income introduced by Article 885Va of the CGI increased the amount of wealth tax payable by Mr Bourgès-Maunoury and Ms Heintz, it had rightly been able to conclude that the taxpayers were thus being subjected to taxation which had the effect of indirectly taxing their Community income.

24. By letter of 15 October 2010, the Commission informed Mr Bourgès-Maunoury and Ms Heintz that, in the light of the judgment given by the Cour de cassation, it considered that there would be no advantage for them in bringing infringement proceedings against the French Republic.

III – The question referred for a preliminary ruling and the procedure before the Court of Justice

25. It was against that background that the Tribunal de grande instance de Chartres, faced with the claims brought by Mr Bourgès-Maunoury and Ms Heintz with respect to their wealth tax declarations for the years 2002 to 2004, 2006 and 2007 and being in some doubt about the interpretation of the provisions of Article 13 of the Protocol on Privileges and Immunities, decided, in the light in particular of the aforementioned judgment of the Cour de cassation, to refer the following question to the Court for a preliminary ruling: ‘Is it contrary to the second paragraph of Article 13 of Chapter V of the Protocol on the Privileges and Immunities of the European Communities, annexed to the Treaty establishing a Single Council and a Single Commission of the European Communities, for the entirety of a taxpayer’s income, including Community income, to be taken into account in calculating the cap on wealth tax (“impôt de solidarité sur la fortune”)?’

26. Written observations have been submitted by the claimants in the dispute in the main proceedings, the French Republic, the Kingdom of Belgium, the Kingdom of the Netherlands and the Commission.

27. The Court heard counsel for the claimants in the dispute in the main proceedings and the agents for the French Republic and the Commission at the hearing held on 23 November 2011.

IV – Analysis

28. The question referred for a preliminary ruling, notwithstanding its apparent simplicity, calls for an examination of matters relating both to the Protocol on Privileges and Immunities and to the wealth tax and the capping mechanism provided for in Article 885Va of the CGI.

A – Article 13 of the Protocol on Privileges and Immunities

29. The first paragraph of Article 13 of the Protocol on Privileges and Immunities ( 9 ) provides that officials and other servants of the Union are to be liable to a tax on salaries, wages and emoluments ( 10 ) paid to them by the Union, while the second paragraph of that article provides that they are to be exempt from national taxes on those salaries, wages and emoluments.

30. According to the case-law of the Court of Justice, the two paragraphs of that article, which cannot be read in isolation, ( 11 ) seek to replace national taxes with a Community tax which is applicable to the officials and servants of the European Union on the basis of uniform conditions, in the interests of the independence of the European Union, ( 12 ) and are thus intended, on the one hand, to guarantee strict equality of remuneration as between those officials and servants ( 13 ) and, on the other hand, to prevent any double taxation, whether at Community or national level, of the salaries, wages and emoluments paid to them by the European Union.

31. That provision, taken in its entirety, is intended to guarantee that officials and servants of the European Union are taxed in a uniform manner on the aforementioned salaries, wages and emoluments paid to them, in particular by ensuring, on the one hand, that their actual remuneration does not vary by reason of their nationality or place of residence as a result of the levying of different national taxes, and, on the other hand, that that remuneration is not inordinately taxed as a result of double taxation. ( 14 )

32. The Court has stated that, according to its wording and scheme, Article 13 of the Protocol on Privileges and Immunities provides for ‘an exemption from all direct or indirect national taxes on salaries, wages and emoluments paid by the Union to its officials and other servants’ and that, ‘consequently, it precludes any national tax, regardless of its nature and the manner in which it is levied, which is imposed directly or indirectly on officials and other servants of the Communities by reason of the fact that they are in receipt of remuneration paid by the Union, even if the tax in question is not calculated by reference to the amount of that remuneration’, ( 15 ) thus restricting the Member States’ sovereignty in fiscal matters. ( 16 )

33. That exemption relates specifically to officials and servants of the European Union ( 17 ) and is limited to national taxes of a similar nature to the taxes which the European Union levies on their salaries, wages and emoluments ( 18 ) and to national taxes which may be charged on income arising from the performance of their functions, which is subject to Community tax. ( 19 )

34. It is worth recalling the essentials of the Court’s case-law in this regard.

35. In Humblet v Belgian State, ( 20 ) the Court was called upon to assess the compatibility with Article 11(b) of the ECSC Protocol on Privileges and Immunities of the additional Belgian tax charged on the total combined income of married couples at progressive rates on successive bands of income. In that case, the Belgian tax administration had, in essence, determined the tax rate applicable to the wife of an ECSC official by reference to her husband’s income.

36. In proceedings brought under Article 16 of the ECSC Protocol on Privileges and Immunities, the Court held that that Protocol precluded not only any measure imposing on an official any taxation which is based in whole or in part on the salary paid by the ECSC, but also the taking into account of that salary for the purposes of determining the rate applicable to other income. It held in particular in this regard that the levying of taxes on a category of income at a rate calculated on the basis of other income amounted in essence to the direct taxation of the latter income, in so far as, taking account of logical economic and financial considerations, the total income of a taxpayer constituted an organic whole. ( 21 )

37. In Brouerius van Nidek, ( 22 ) the Court held that death duties, which are levied only once on an estate at the time of its transmission, did not constitute national taxes prohibited by Article 13 of the Protocol on Privileges and Immunities, in so far as they were applied in a non-discriminatory manner to all taxpayers.

38. In Tither, ( 23 ) the Court was faced with a question concerning a mechanism for subsidising interest paid by individuals on loans to purchase or improve their main residence. That mechanism enabled the borrower to deduct from the interest payable to the lender a sum equal to the tax on the income from those payments, the lender being required to consent to that deduction. For tax purposes, the deduction thus applied to the payment of interest had the same effect as tax relief on the borrower’s income. However, persons exempt from income tax were excluded from the benefit of that subsidy. The Court held that Article 13 of the Protocol on Privileges and Immunities did not oblige the Member State to grant that subsidy to officials and servants of the European Union.

39. In Kristoffersen, ( 24 ) the Court was faced with the question whether the Danish law on income tax was compatible with Article 13 of the Protocol on Privileges and Immunities in that it permitted tax to be charged on the rental value of a European official’s home. The Court held that such taxation did not constitute indirect taxation of the salaries, wages and emoluments paid by the European Union in so far as it had no legal connection with them and was levied on an objective basis.

40. Finally, in Vander Zwalmen and Massart, ( 25 ) the Court was faced with a question concerning the grant of the benefit of a marital allowance from the point of view of income tax in Belgium. In the context of the separate taxation of spouses’ income, the Belgian legislation provided for the grant of tax relief (the ‘marital allowance’) to single-income households and households with two incomes the second of which was below a given amount. The Court held that the refusal to grant the marital allowance to households in which one spouse was an official of the European Union and that spouse’s salary was greater than the aforementioned amount was not incompatible with Article 13 of the Protocol on Privileges and Immunities. After all, the exclusion from the allowance stemmed from the application of a general condition applicable to any taxpayer, which was therefore non-discriminatory, and not from an additional condition linked to the status of official of one of the spouses.

41. In Commission v Belgium, ( 26 ) on the other hand, the Court held that the Kingdom of Belgium had failed to fulfil its obligations under Article 13 of the Protocol on Privileges and Immunities by refusing to grant the owners of buildings reductions in the tax on income from immovable assets where the tenant or the tenant’s spouse was an official or servant of the European Union. The Belgian legislation at issue provided, in essence, that the tax on income from immovable assets, which is a tax on real estate in Belgium payable by the owner, could be reduced depending on the social circumstances of the occupant of the property. However, that reduction was inapplicable where the residence was occupied by a tenant exempt from income tax ‘by virtue of international conventions’. Consequently, the owner was refused a reduction in the tax on income from immovable assets if the tenant was an official or servant of the European Union who was exempt from Belgian income tax under Article 13 of the Protocol on Privileges and Immunities.

42. The Court, taking into account the fact that, where the residence was let, the tax was in practice passed on to the tenant by the owner, held that that exclusion from the benefit of a reduction in the rate of the tax on income from immovable assets was contrary to Article 13 of the Protocol on Privileges and Immunities. After all, it amounted to imposing on the officials and servants of the European Union an additional financial charge by comparison with other taxpayers on the ground that they were in receipt of remuneration which was exempt from national taxes. ( 27 )

43. The general but consistent idea which thus emerges from the Court’s case-law is that there is indirect taxation of the income of officials and servants of the European Union only where the national legislation at issue, although in appearance formally compliant with the Protocol on Privileges and Immunities, has as its purpose to tax that income beyond the Community tax and it can be concluded from this that it has the object or effect of ‘circumventing’ that Protocol. In this connection, legislation which ‘targets’ officials and servants of the European Union or treats them in a discriminatory manner, to take up the idea expressed by the Court in Brouerius van Nidek and Vander Zwalmen and Massart, ( 28 ) may be regarded as the manifestation of a desire to circumvent the Protocol on Privileges and Immunities.

B – The national provision

44. The referring court provides hardly any details either of the wealth tax or, in particular, of the meaning and purpose of the capping mechanism applicable to the calculation of the wealth tax in its order for reference. However, having regard to the question raised, it is necessary to carry out an examination not only of the nature and structure of the wealth tax but also of the capping mechanism provided for in Article 885Va of the CGI and, therefore, in fine, of the calculation of the amount of the wealth tax contribution.

45. That said, the fact remains that it is for the referring court alone to interpret the provisions of its national law. For that reason, there will come a point in the course of examining the national law with a view to giving that court a useful answer to its question when it will have to rely on its own interpretation of that national law.

46. The examination of national law will look first at the wealth tax itself, then at the capping mechanism provided for in Article 885Va of the CGI and, finally, at the non-exclusion of income of Community origin from the calculation of the cap.

1. The nature and legitimacy of the wealth tax

47. Under Article 885A of the CGI, the wealth tax is payable both by natural persons whose residence for tax purposes is in France, on their assets situated in France or outside France, and by natural persons whose residence for tax purposes is outside France, on their assets situated in France, ( 29 ) in accordance with a progressive scale which is updated each year, in accordance with Article 885U of the CGI, ( 30 ) once the value of those assets exceeds the first band of that scale. ( 31 )

48. Under Article 885E of the CGI, ( 32 ) the basis of assessment for the wealth tax is constituted by the net value of the entirety of the taxpayer’s taxable assets, interests and securities. ( 33 ) It therefore covers all assets, whether financial (liquid funds, transferable securities) or non-financial (main or secondary residences, property for letting, land) ( 34 ) belonging to the taxpayer. The taxpayer himself assesses his taxable assets in accordance with the rules in force on the transfer of property mortis causa. The assets are assessed at their actual market value on the date of the taxable event, that is to say 1 January of the tax year in question.

49. The wealth tax is thus a tax assessed on the possession of property, that is to say the taxpayer’s net assets. ( 35 ) In those terms, it seems clear to me that the Court may reasonably adopt an interpretation to the effect that, in the light of its basis of assessment, the wealth tax is levied on assets as a source of wealth different from income.

50. That said, it must be emphasised that this case in no way calls into question the legitimacy, from the point of view of the Protocol on Privileges and Immunities, of a tax on wealth levied in parallel with income tax, nor the power of the Member States to require officials and servants of the European Union subject to their fiscal sovereignty to pay such a tax. The Court is not therefore called upon to answer the question whether a national tax, in so far as it is formally levied on assets, is in all circumstances compatible with the Protocol on Privileges and Immunities.

51. In any event, it is important to dismiss the idea that, given the extent of its basis of assessment, the wealth tax is levied on income in so far as its collection reduces the taxpayer’s total disposable wealth. It is true that, in so far as the wealth tax applies to the entirety of a taxpayer’s assets, including his financial assets, it therefore necessarily incorporates a residual fraction of unexpended income from the year preceding the tax year. However, any taxation of assets is ultimately a tax on ‘frozen income’, that is to say the unconsumed income forming part of the taxpayer’s assets. ( 36 )

2. The wealth tax capping mechanism

a) Description of the wealth tax

52. Put very simply, the wealth tax cap provided for in Article 885Va of the CGI ( 37 ) is designed to ensure that, taken together, the direct taxes payable by a taxpayer, including income tax and the wealth tax, do not exceed a certain percentage of his income. ( 38 )

53. Capping ( 39 ) essentially involves subtracting ( 40 ) from the amount of the wealth tax contribution due in principle for the current year the amount represented by the difference between, on the one hand, the total of the wealth tax contribution due for the current year plus the taxes ( 41 ) due in France and abroad ( 42 ) on income from the previous year and, on the other hand, 85% of the income accruing to the taxpayer in the previous year. Article 885Va of the CGI requires the inclusion within that 85% ( 43 ) of the income-tax-exempt income generated in France or abroad, including remuneration, benefits, annuities, pensions and other income paid by the European Union during the year prior to that in which the wealth tax is charged, which is at issue in this case. The mechanism is therefore triggered only on condition, essentially, that the total amount of direct taxes payable for the current year exceeds 85% ( 44 ) of the total amount of income received during the previous year.

b) The meaning and purpose of the wealth tax cap

54. In so far as it essentially precludes a taxpayer’s overall tax burden from exceeding 85% of his income, ( 45 ) the wealth tax capping mechanism has as its main objective to ensure that taxpayers on a modest income but with substantial assets generating a poor return are not obliged to sell part of their assets in order to pay the tax due. ( 46 ) It therefore seeks to adjust the impact of the wealth tax specifically to the taxpayer’s income and is therefore intended to limit the potentially confiscatory nature of the wealth tax. ( 47 )

55. In this regard, it is clear from the parliamentary debates on the subject ( 48 ) that the capping mechanism was indeed introduced with a view to ensuring that the wealth tax did not have a confiscatory effect and did not appear to be unacceptable and intolerable from the point of view of social justice and fairness. ( 49 )

56. It seems, ( 50 ) moreover, that it was in order to take account of the case-law of the Conseil constitutionnel, ( 51 ) which focused on observance of the principle of equality and, more specifically, on the principle of equality vis-a-vis public charges, ( 52 ) that the legislature decided to introduce a capping mechanism for the wealth tax. ( 53 )

57. All the same, it must be emphasised that the capping mechanism is not, in itself, called into question in this case either. Moreover, it is capable of benefiting both officials and servants of the European Union and other taxpayers subject to the wealth tax. After all, the possibility cannot be ruled out that an official or servant of the European Union who is subject to the wealth tax may be affected by the ‘syndrome des pêcheurs de l’Île de Ré’. ( 54 ) Consequently, without the wealth tax cap, he might have to set aside a very large share of his Community income to pay the wealth tax. There are therefore situations in which the officials and servants of the European Union not only cannot do without the cap but must actually be able to benefit from it. ( 55 )

58. As thus described, the capping mechanism that forms part of the procedure for calculating the wealth tax has all the characteristics of what, in the legal culture of certain Member States and in particular the German-speaking States, is known as a ‘hardship clause’, ( 56 ) although the underlying idea can be found in the legal culture of all the Member States. ( 57 )

59. Any legal system required to express itself through general and abstract formulations, as law by its very nature does, will inevitably contain provisions to mitigate the consequences of its application and make use of exceptions. The rigour of the law must be limited once it reaches a certain degree of intensity. It is in these circumstances that the legislature should intervene by introducing a hardship clause, or at any rate it should if it wishes to be recognised as a legitimate and fair legislature or, more simply, if it wishes to remain consistent with the requirements of the principle of proportionality.

60. The rules governing tax law are no different. ( 58 ) In the constitutional traditions common to the Member States, the tax system is subject, inter alia, to the criteria of justice, to which the legislature strives to give general and abstract expression in meaningful formulations. It is important to be aware, however, that there are limits even to that aspiration. Thus, the well-known and widely-recognised idea that the exercise of fiscal power must not have confiscatory effects may just as conceivably govern the general formulation of the tax provision as form the basis for the exceptions, the hardship clauses, to which that provision is subject.

61. It is from this point of view that methods of interpretation take on their full significance. It is of course commonly accepted that any exception to a provision must be interpreted strictly. In the case of hardship clauses, however, that cannot be the only consideration. On the contrary, anyone interpreting those clauses must never lose sight of their purpose, which is what prompted the legislature to introduce them in the first place. Any interpretation of a hardship clause which visibly departs from the reason for the clause’s existence distorts the clause and thus deprives it of all its original legitimacy.

62. While it is important to remember that it is for the referring court to interpret the provisions of its national law, it is none the less reasonable to take the view that the purpose of the wealth tax capping mechanism is to mitigate the potentially confiscatory effect of the wealth tax, in keeping with Article 1 of the First Additional Protocol to the European Convention on Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, ( 59 ) and, more broadly, the constitutional traditions common to the Member States. ( 60 )

c) Non-exclusion of EU income

63. The third aspect of the national legislation which has yet to be examined is the inclusion of income of Community origin in the calculation of the wealth tax cap.

64. As I have already stated, the issue which Article 885Va of the CGI raises in relation to European Union law is that it includes taxpayers’ exempt income in the calculation of the cap. That article takes account of the fact that some wealth tax taxpayers receive income from an employment relationship with a European Union institution.

65. That inclusion or, rather, non-exclusion of income of Community origin in the calculation of the cap may, in a number of cases, increase the wealth tax contribution owed by the taxpayer. ( 61 ) To be more precise, since the inclusion of income of Community origin increases the level of income taken into consideration, it lessens the effectiveness of the cap, which automatically increases the wealth tax contribution in proportion to the volume of the taxpayer’s assets.

66. This is the only point at issue in this case.

C – Non-exclusion of income of Community origin from the calculation of the wealth tax cap in the light of Article 13 of the Protocol on Privileges and Immunities.

1. The consequences of the non-exclusion of European Union income

67. It should be pointed out once again that the non-exclusion of income of Community origin from the calculation of the wealth tax cap may, in some cases, have the effect of deactivating or neutralising the hardship clause, the indirect consequence of which is to increase the wealth tax contribution owed by the taxpayer. Although that fact alone is not necessarily sufficient to support the view that the provisions of Article 885Va of the CGI are incompatible with Article 13 of the Protocol on Privileges and Immunities, it does make it necessary to continue the analysis in order to ensure that, notwithstanding its specific nature, the wealth tax does not indirectly tax that income.

68. What Mr Bourgès-Maunoury and Ms Heintz are actually seeking to obtain by their claim is to have the hardship clause applied to them, albeit on the basis that the assessment of their income does not take into account income of Community origin. Is that claim legitimate?

2. Information obtained from the Court’s case-law

69. The wealth tax and its cap are clearly different, in two respects, from the tax provision at issue in Humblet v Belgian State. On the one hand, bearing in mind that the wealth tax is a progressive system of taxation, ( 62 ) income of Community origin is not taken into account in determining the wealth tax rate applicable. On the other hand, and in consequence, although it is true that the capping mechanism may increase the wealth tax contribution owed by officials and servants of the European Union, the view none the less cannot be taken that the income of those officials has been taxed more heavily solely because they receive income of Community origin, ( 63 ) since that increase depends on the ratio of total income to assets.

70. Nor can the view be taken, in the light of the judgment in Commission v Belgium concerning the tax on income from immovable assets, ( 64 ) that the wealth tax cap has the effect of denying officials and servants of the European Union a tax advantage by reason of their status as such, that is to say, even though they otherwise fulfil the eligibility conditions laid down by the national legislation.

71. After all, it is not possible, in my view, to consider that the specific purpose of including income of Community origin in the calculation of the cap was to take account of the situation of French officials and servants of the European Union, ( 65 ) although this is a matter for the referring court to determine.

72. Thus, an examination of the wealth tax cap in the light of the Court’s case-law does not support the conclusion that it is incompatible with the second paragraph of Article 13 of the Protocol on Privileges and Immunities. That case-law law might even sustain the finding that Article 885Va of the CGI does not infringe Article 13.

73. However, the specific issue which the wealth tax cap raises in relation to Article 13 of the Protocol on Privileges and Immunities has never arisen before and therefore calls for an ad hoc response from the Court, in keeping with its relevant case-law, which takes into consideration the special nature of the wealth tax and the capping mechanism linked to it.

3. The non-exclusion of income from the European Union as an integral component of a hardship clause

74. It seems fair to assume that the capping mechanism was introduced only as a hardship clause, that is to say, in order to prevent an unfair situation, to mitigate the potentially confiscatory effect of the wealth tax. Mr Bourgès-Maunoury and Ms Heintz seem to be claiming that their Community income should not be included in the income taken into consideration in the calculation of the wealth tax cap, on the basis of Article 13 of the Protocol on Privileges and Immunities. In my view, however, an affirmative response to that claim would distort the nature of the hardship clause represented by the capping mechanism, inasmuch as it would fail entirely to take account of the reasons why that clause was introduced into the legislation.

75. If the hardship clause were applied in this way to French officials and servants who derive all, or almost all, of their income from the salaries, wages, emoluments, pensions or allowances paid to them by the European Union, as can very often be the case, their assets would be all but removed from the scope of the wealth tax. In the absence of any other income that might be included in the calculation of the cap, the amount of the wealth tax would usually exceed the 85% threshold and, as a result, that category of taxpayer would be exempt from the wealth tax. Such an approach would have the effect of exempting officials and servants of the European Union from any taxation of their assets, a proposition which is hard to defend given that it would distort the objective pursued by a hardship clause.

76. Consequently, I consider that the inclusion of income of Community origin in the calculation of the wealth tax cap provided for by Article 885Va of the CGI is not contrary to the second paragraph of Article 13 of the Protocol on Privileges and Immunities, in so far as it has the characteristics of and pursues no purpose other than that of a hardship clause, which it is for the referring court to determine.

V – Conclusion

77. I therefore ask the Court to answer the question referred by the national court as follows: The second paragraph of Article 13 of the Protocol on the Privileges and Immunities of the European Communities must be interpreted as meaning that it does not preclude a national provision such as that at issue in the main proceedings, which provides for a mechanism to ‘cap’ the amount of the contribution due by way of wealth tax (‘impôt de solidarité sur la fortune’) that takes into account the entirety of a taxpayer’s income, including income of Community origin which is exempt from national income tax, in so far as it has the characteristics of and pursues no purpose other than that of a hardship clause, which it is for the referring court to determine.

( 1 ) Original language: French.

( 2 ) The ‘Protocol on Privileges and Immunities’, which, since the entry into force of the Treaty of Lisbon on 1 December 2009, has become the second paragraph of Article 12 of Protocol No 7 on the Privileges and Immunities of the European Union.

( 3 ) For an overview, see in particular Grosclaude, J., ‘Genèse et problématique’, JurisClasseur Impôt sur la fortune, Vol. No 15.

( 4 ) That tax, introduced by Article 2 of Law No 81-1160 on Finances for 1982 of 30 December 1981 (JORF of 31 December 1981, p. 3539), had been repealed by Amending Law No 86-824 on Finances for 1986 of 11 July 1986 (JORF of 12 July 1986, p. 8688), which entered into force on 1 January 1987.

( 5 ) Law No 88-1149 of 23 December 1988 (JORF of 28 December 1988, p. 16320).

( 6 ) Provision as contained in Law No 98-1266 on Finances for 1999 of 30 December 1998 (JORF of 31 December 1998, p. 20050), as amended by Article 1 of Decree No 2009-389 of 7 April 2009 incorporating into the General Tax Code various texts amending and supplementing certain provisions of that Code (JORF of 9 April 2009, p. 6236).

( 7 ) Provision as contained in Article 16 of Law No 98-1266, as amended by Article 38 of Amending Law No 2004-1485 on Finances for 2004 of 30 December 2004 (JORF of 31 December 2004, p. 22522). Article 885Va of the CGI has since been repealed by Amending Law No 2011-900 on Finances for 2011 of 29 July 2011 (JORF of 30 July 2011, p. 12969).

( 8 ) Appeal No H 09-11.174.

( 9 ) That provision, the applicable wording of which at the time of the facts of the dispute in the main proceedings dates back to 1 July 1967, the date of entry into force of the so-called ‘merger’ treaty, signed in Brussels on 8 April 1965, reproduces the substance of the identical provisions of Article 12 of the eponymous protocols annexed to the EEC and EAEC Treaties respectively, signed in Rome on 25 March 1957. Article 11(b) of the Protocol on Privileges and Immunities annexed to the ECSC Treaty, signed in Paris on 18 April 1951, also established the principle that members and officials of the High Authority must be exempt from all taxes on salaries and emoluments paid to them by the European Coal and Steel Community (ECSC), but did not provide for the imposition of a Community tax. See in this regard Case 23/68 Klomp [1969] ECR 43, paragraph 8.

( 10 ) The conditions and procedure for determining and levying that tax are established by Regulation (EEC, Euratom, ECSC) No 260/68 of the Council of 29 February 1968 laying down the conditions and procedure for applying the tax for the benefit of the European Communities (OJ English Special Edition 1968 (I), p. 37). Regulation (Euratom, ECSC, EEC) No 3821/81 of the Council of 15 December 1981 amending the Staff Regulations of officials of the European Communities and the conditions of employment of other servants of those Communities (OJ 1981 L 386, p. 1), which introduced the exceptional crisis levy at issue in Case 3/83 Abrias and Others v Commission [1985] ECR 1995, had also been adopted on the basis of Article 13 of the Protocol on Privileges and Immunities.

( 11 ) Case 7/74 Brouerius van Nidek [1974] ECR 757, paragraph 10. In that judgment (paragraph 11), the Court emphasises the idea that the exemption from all national taxes provided for by the second paragraph of Article 13 of the Protocol on Privileges and Immunities is a consequence of levying a Community tax, as provided for in the first paragraph of that article, an idea which could not by definition be defended under the ECSC Protocol on Privileges and Immunities. See also Case 208/80 Bruce of Donington [1981] ECR 2205, paragraph 11.

( 12 ) Case 85/86 Commission v EIB [1988] ECR 1281, paragraph 23. See also Case C-288/04 AB [2005] ECR I-7837, paragraph 27, in which the Court states that the assignment of immunities and privileges necessary for the performance of the tasks of the Community institutions on the basis of overriding provisions, those of the Protocol on Privileges and Immunities, makes it possible to guarantee their ‘institutional and functional autonomy’.

( 13 ) In its judgment in Case 6/60 Humblet v Belgian State [1960] ECR 559, 577 and 578, the Court had already held that the Community’s exclusive power to fix the net amount of the salaries of its officials was necessary in order to ‘reinforce the independence of [its] administrative departments … vis-à-vis the national powers’ but also to guarantee the equality of remuneration for officials of different nationalities.

( 14 ) Case 32/67 Van Leeuwen [1968] ECR 43, in particular 48, and Brouerius van Nidek, paragraph 11.

( 15 ) Wording unchanged since the judgment in Case 260/86 Commission v Belgium [1988] ECR 955, paragraph 10; see in particular Case C-333/88 Tither [1990] ECR I-1133, paragraph 12, and Case C-263/91 Kristoffersen [1993] ECR I-2755, paragraph 15.

( 16 ) Case C-229/98 Vander Zwalmen and Massart [1999] ECR I-7113, paragraph 24.

( 17 ) In its judgment in Humblet (in particular 570) concerning Article 11(b) of the ECSC Protocol on Privileges and Immunities, which was therefore delivered at a time when the Community tax on the remuneration of ECSC officials did not exist, the Court had held that the privileges and immunities of officials of the ECSC, including exemption from national taxes, although provided for in the public interest of the Community, were none the less granted directly to those officials and conferred an individual right on them.

( 18 ) Brouerius van Nidek, paragraph 12.

( 19 ) Case C-437/04 Commission v Belgium [2007] ECR I-2513, paragraph 61.

( 20 ) Cited above.

( 21 ) In particular, 579.

( 22 ) Cited above.

( 23 ) Cited above.

( 24 ) Cited above.

( 25 ) Cited above.

( 26 ) Cited above.

( 27 ) Paragraph 12.

( 28 ) Paragraph 14.

( 29 ) See in particular ‘Champ d’application’, ‘Fait générateur’ and ‘Personnes imposables’ in JurisClasseur Impôt sur la fortune, Vol No 20.

( 30 ) The rates applicable ranged from 0.55% to 1.8% of the net value of the assets. After the reform introduced in 2011, there are now only two rates, 0.25% for assets of between EUR 1 300 000 and 3 000 000 and 0.50% thereafter.

( 31 ) That is to say, a value exceeding EUR 720 000 between March 2002 and January 2005, EUR 732 000 between January 2005 and January 2007 and EUR 760 000 between January 2007 and April 2008.

( 32 ) See in particular ‘Assiette de l’impôt’, ‘Patrimoine à prendre en consideration’ in JurisClasseur Impôt sur la fortune, Vol. No 24.

( 33 ) However, the wealth tax burden is reduced, in particular, by rebates such as the main residence allowance and total or partial exemptions, including those relating to business assets, company shares subject to a commitment to preservation (see in this regard Decision No 2003-477 DC of the Conseil constitutionnel (Constitutional Council) of 31 July 2003, Law of Economic Initiative, Rep. p. 418, 11th to 16th recitals), but also works of art, antiques and collectors’ items, woods and forests, inventors’ and authors’ intellectual property rights, or even certain life annuities. See in this regard the various volumes of the JurisClasseur Impôt sur la fortune.

( 34 ) Debts are deducted from the basis of assessment for the wealth tax in accordance with the same conditions and limits as are applicable to succession duty.

( 35 ) See in this regard the analysis of Migaud, D., in the rapport d’information de l’Assemblée nationale No 1065, sur la fiscalité du patrimoine et de l’épargne of 16 July 1998, in particular p. 35. The author states that the social significance of the wealth tax lies in its aim of ensuring greater fairness between taxpayers in so far as it taxes the capacity to contribute conferred on the holder of assets by his very possession of those assets.

( 36 ) The Conseil constitutionnel held in this regard that, in so far as its basis of assessment is not confined to income-producing assets, the wealth tax was not an income tax under French law but, more broadly, a tax charged on ‘the capacity to contribute conferred by the possession of a set of assets and interests’. See Decision No 2010-44 QPC of 29 September 2010, Epoux M., 11th recital; Crouy-Chanel, E., and Le Bris, A.-S., ‘La décision No 2010-44 QPC du Conseil constitutionnel: réflexions sur la notion de faculté contributive’Revue de Droit fiscal, No 9, p. 230; Feldman, J.-Ph., Le Conseil constitutionnel et l’ISF. De l’égalité et de la progressivité de l’impôt, Dalloz, 2010, No 39, p. 2620; Decision No 2010-99 QPC of 11 February 2011, Mrs Laurence N., fifth recital; Roemer, F., ‘Conformité à la Constitution du principe de la limitation du plafonnement de l’impôt sur la fortune’, Semaine juridique édition Générale, 2011, No 15, p. 703.

( 37 ) It must be made clear that it was applicable only to persons whose residence for tax purposes was in France. The Commission had formally initiated infringement proceedings against the French Republic in this regard, which were terminated on 27 October 2011 following the 2011 reform abolishing the cap; see Commission, press release IP/101/1405 of 28 October 2010, ‘Direct taxation: The European Commission asks France to review two capping measures’.

( 38 ) Provided for by Law No 88-1149 of 23 December 1988 creating the wealth tax, the cap was initially fixed at 70% of disposable income before being raised to 85% by Article 16 of Law No 90-1168 on Finances for 1991 of 29 December 1990 (JORF of 30 December 1990, p. 16367). Article 885Va of the CGI has since been repealed by Law No 2011-900, the tax scale having been amended at the same time; see in this regard Decision No 2011-638 DC of the Conseil Constitutionnel of 28 July 2011, Amending Law on Finances for 2011 (JORF of 30 July 2011, p. 13001, 18th recital).

( 39 ) On the specific rules for calculating the cap, see Thibault-Liger, J., ‘Tarif et liquidation de l’impôt’, JurisClasseur Impôt sur la fortune, Vol. No 70.

( 40 ) Subject to the cap on the cap. Article 885Va of the CGI provides both for a cap on the wealth tax and for a cap on the wealth tax cap. The cap on the cap, established by Law No 95-1346 on Finances for 1996 of 30 December 1995 (JORF of 31 December 1995, p. 109030), is also not at issue in this case. Its objective was to ensure that the cap was not too advantageous, that the taxpayer did not lower his income in order to reduce considerably the tax due on very substantial assets. See in this regard, for example, Chenevoy-Gueriaud, M., ‘L’impôt de solidarité sur la fortune: une évolution inachevée’, Revue de la recherche juridique, Droit prospectif, 2006, No 3.

( 41 ) On the calculation of the amount to be taken into account in this regard, see, confirming Administrative Instruction 7 R-1-89 of 28 April 1989 (BOI 7 R-1-89), [the judgment of] the Conseil d’État of 28 February 2007, Application No 292912, Mr and Mrs Lefoulon, and Mr Collin’s Opinion, Droit fiscal, 2007, No 43, commentary No 936.

( 42 ) It is clear from Article 885Va of the CGI that this includes the taxes paid to the European Union by its officials and servants.

( 43 ) Since 1999.

( 44 ) The French Conseil constitutionnel held in this regard that, although high, the 85% threshold set by the legislature none the less did not seriously breach the principle of equality vis-à-vis public charges, pointing out that its aim was to prevent taxpayers with the most sizeable assets from adjusting their circumstances in such a way as to ensure that they held only assets that did not yield any taxable income and thus to limit the advantage which the latter derive from the cap. See Decision No 2010-99 QPC of 11 February 2011, Laurence, N., 5th recital.

( 45 ) The legislature subsequently introduced a second mechanism, the tax shield, which considerably reduced the scope of the cap, but it is not at issue in this case and was abolished at the same time as the cap by Law No 2011-90.

( 46 ) A consequence known as the ‘syndrome des pêcheurs de l’Île de Ré’, an island on which the pressure on immovable property makes it impossible for certain farmers with sizeable assets, and therefore subject to the wealth tax, to discharge their obligations because of inadequate income.

( 47 ) On the logic of this mechanism, see Chouvelon, Th., ‘Le plafonnement de l’ISF’, Semaine juridique edition Notariale, 1993, Nos 51 and 52, pp. 684 to 687.

( 48 ) See in particular Migaud, D., rapport d’information No 1065: ‘[t]he original justification for the cap was the desire to remove any confiscatory characteristics from the tax on net assets, particularly in the case of taxpayers with assets generating a low rate of return, as is the case for example where their assets are made up principally of immovable property, and on only a modest income.

( 49 ) See in particular in this regard Turot, J., ‘Le caractère confiscatoire de l’ISF’, Lettre des avocats conseils fiscaux 1999, No 66, p. 34; Maublanc, J.-P., ‘Le contribuable peut-il tenir en échec le caractère confiscatoire de l’ISF?’, Actualité Juridique Droit Immobilier, 2005, No 11, p. 823; Courrec du Pont, N., and Mercier, J.-Y., ‘Le plafonnement de l’ISF est-il bien conforme aux exigences constitutionnelles?’, Semaine juridique edition Entreprises, 2008, Nos 17 and 18, p. 46.

( 50 ) See to this effect Marini, Ph., L’impôt sur la fortune, rapport d’information, Commission des finances du Sénat, No 351; Fribourg, M., ‘Impôt sur le revenu, impôt de solidarité sur la fortune et équité fiscale’, No 177, in Conseil des prélèvements obligatoires, Prélèvements obligatoires sur les ménages: progressivité et effets redistributifs, May 2011.

( 51 ) In particular, that established in Decision No 81-133 DC of 30 December 1981, Law on Finances for 1982 (Rep. p. 41, 4th to 7th recitals), where the Conseil declared the ‘impôt sur les grandes fortunes’ to be in conformity with the constitution. Although, as it happens, the Conseil constitutionnel has never been formally requested to rule on the constitutionality of the wealth tax cap as such, it has nevertheless had occasion to comment on the principle of a cap on the tax, in casu the tax shield, in terms which merit full citation. It has held that ‘the requirement laid down in Article 13 of the Declaration of 1789 would not be satisfied if the tax were confiscatory in nature or imposed on a category of taxpayers a burden which was excessive in the light of their capacity to contribute’ and that, ‘consequently, the capping of the share of a household’s income that is set aside for the payment of direct taxes, far from disregarding the notion of equality in matters of taxation, seeks in principle to prevent a serious breach of the notion of equality vis-à-vis public charges; see Decision No 2007-555 DC of 16 August 2007, Law promoting work, employment and purchasing power (Rep. p. 310, 24th recital), and Decision No 2005-530 DC of 29 December 2005, Law on Finances for 2006 (Rep. p. 168, 65th and 66th recitals). In its recent decision concerning the Amending Law on Finances for 2011 (Decision 2011-638 DC, 18th recital), which, among other things, abolished the wealth tax cap provided for in Article 885Va of the CGI and amended the wealth tax scale, the Conseil constitutionnel held that the fact that the wealth tax was less progressive following the amendment to the scale complained of by the applicants was in conformity with the Constitution. It considered in this regard that, by amending the wealth tax scale, the legislature had ’sought to ensure that the simultaneous abolition of the cap provided for in Article 885Va of the [CGI] and [the tax shield] did not have the effect of imposing on a category of taxpayers a burden which was excessive in the light of their capacity to contribute’.

( 52 ) See, in particular, Eveillard, G., ‘L’exigence de critères objectifs et rationnels dans le contrôle de l’égalité devant l’impôt par le Conseil constitutionnel’, Les Petites Affiches, 26 January 2000, p. 8; Castagnède, B., ‘Le contrôle constitutionnel d’égalité fiscale’, Les Petites Affiches, 1 May 2001, p. 4.; Mastor, W., L’impôt de solidarité sur la fortune à l’épreuve de la Constitution, Dalloz, 2005, p. 1257; Frank, A., ‘Les critères objectifs et rationnels dans le contrôle constitutionnel de l’égalité’, Revue du droit public, 2009, p. 77; Dussart, M.-L., ‘Les choix de politiques fiscales du législateur, l’égalité devant les charges publiques et le pouvoir d’appréciation du juge constitutionnel’, Revue du droit public, 2010, p. 1003.; Montgolfier, J.-F., ‘Le conseil constitutionnel et la propriété privée des personnes privées’, Nouveaux cahiers du Conseil constitutionnel, 2011, p. 35; Fouquet, O., ‘Le Conseil constitutionnel et le principe d’égalité devant l’impôt’, Nouveaux cahiers du Conseil constitutionnel, 2011, p. 7.

( 53 ) As regards the case-law of the Cour de cassation, see in particular Albert, J.-L., La Cour de cassation et l’impôt de solidarité sur la fortune: conséquences et inconséquence, Dalloz, 2005, No 25, p. 1659; Mercier, J.-Y., ‘L’ISF est-il spoliateur? Une réponse négative de la Cour de cassation’, Bulletin de gestion fiscale des entreprises, 2005, No 2, p. 25; Quilici, S., ‘ISF et caractère confiscatoire: choix de gestion n’est pas raison’, Semaine juridique édition entreprises, 2009, No 42. See in particular the judgment of 4 October 2011 of the Cour de cassation, Commercial Chamber, application No 10-18.601, Alain Y. and Mrs X., referring to Conseil constitutionnel Decisions No 2010-44 QPC and No 2010-99 QPC, and declaring Articles 885E and 885Va of the CGI respectively to be in conformity with the constitution.

( 54 ) See footnote 48 of this Opinion.

( 55 ) See, by analogy, Vander Zwalmen and Massart (paragraphs 28 and 29).

( 56 ) The term ‘hardship clause’ is used here as a translation of the German ‘Härteklausel’, ‘clause de cas de rigueur’ in French. See in this regard Pernice, I., Billigkeit und Härteklausel im öffentlichen Recht, Nomos, 1991; Lücke, J., Die (Un-) Zumutbarkeit als allgemeine Grenze öffentlich-rechtlicher Pflichten des Bürgers, Duncker & Humblot, 1973.

( 57 ) See, for example, Guillod, O., ‘La clause de dureté dans quelques législations européennes sur le divorce’, Revue internationale de droit comparé, 1983, Vol. 3, No 4, pp. 787; Fouletier, M., Recherches sur l’équité en droit public français, LGDJ, 2003, in particular p. 44 et seq.; Philip, L., ‘solidarité et politique fiscale’, in Béguin, J.-C., Charlot, P. and Laidié, Y., La solidarité en droit public, L’Harmattan, 2005, p. 241; Almeida Prado, M., Le hardship dans le droit du commerce international, Bruylant et Forum Européen de la Communication, Brussels and Paris, 2003.

( 58 ) Isensee, J., Das Billigkeitskorrektiv des Steuergesetzes. Rechtfertigung und Reichweite des Steuererlasses im Rechtssystem des Grundgesetzes, Festschrift für Werner Flume, 1978, Vol. 2, p. 129.

( 59 ) The European Court of Human Rights has also had occasion to rule that the procedure for applying the wealth tax, in particular the procedure for applying the capping rule and determining the basis of assessment for its calculation, fell within the State’s discretion to implement its own tax policy; see Decision of 4 January 2008, Applications Nos 25834/05 and 27815/05, Epoux Imbert de Tremiolles v. France, p. 11; Van Brustem, E.-J., L’ISF et la notion d’impôt confiscatoire sous l’angle de l’article 1er du Protocole no 1 de la Convention européenne des droits de l’homme, Droit fiscal, 2008, No 15, pp. 33 to 38. See also, more extensively, ECHR, decision of 14 December 1988, Liv Ömsesidigt, Försäkringsbolaget Valands Pensionsstiftelse and a group of approximately 15000 individuals v. Sweden, Application No 13013/87, ECtHR No 58, p. 191; ECtHR, judgment of 3 July 2003, Buffalo SRL in liquidation v. Italy, Application No 38746/97, § 32.

( 60 ) It should be noted that the German Constitutional Court declared the German wealth tax to be unconstitutional on account of the lack of such a capping mechanism; see in this regard Grosclaude, J., De l’inconstitutionnalité de l’imposition de la fortune en Allemagne et en France, Droit fiscal, 2002, No 24, p. 879.

( 61 ) It should be noted that this was the very finding reached by the Cour d’appel de Versailles in its judgment of 27 November 2008 when it concluded that the levying of the wealth tax in respect of 2005 had indirectly taxed Mr Bourgès-Maunoury and Ms Heintz’ income of Community origin, which finding was confirmed by the Cour de cassation in its judgment of 19 April 2010; see points 19 to 21 above.

( 62 ) The 2011 reform abolished the progressive scale at the same time as the capping mechanism.

( 63 ) See in this regard Humblet v Belgian State (p. 1160).

( 64 ) Also in the light of the judgment in Vander Zwalmen and Massart (paragraph 26).

( 65 ) Although the wealth tax cap was provided for from the outset, it was not until the Law on Finances for 1999 that exempt income was included in the calculation of the cap. It must be emphasised here that, as is clear from the parliamentary debates, the inclusion of tax-exempt income was motivated mainly by domestic considerations far removed from any desire to take into account exempt Community income, although even this cannot be regarded as decisive for the purposes of answering the question referred. See Migaud, D., report No 1078 produced on behalf of the Commission des finances, de l’économie générale et du plan, on the draft Law on Finances for 1999, Volume II, in particular the presentation of Article 11 of the draft law.