Keywords

Summary



Keywords

1. Questions referred for a preliminary ruling - Jurisdiction of the Court - Limits - Interpretation sought owing to the applicability, to purely internal situations, of provisions of a directive transposed into national law following alignment with Community law of the treatment accorded to internal situations - Jurisdiction to provide such an interpretation

(Art. 234 EC)

2. Approximation of laws - Common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States - Directive 90/434 - Transfer of a branch of activity - Concept - Transaction involving maintenance by the transferring company of the proceeds of a loan contracted by it and the transfer of the resulting obligations to the company receiving the transfer - Excluded - Retention by the transferring company of a small number of shares in a third company - Irrelevant

(Council Directive 90/434, Art. 2(c) and (i))

3. Approximation of laws - Common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States - Directive 90/434 - Transfer of a branch of activity - Independent business - Concept - Assessment by the national court

(Council Directive 90/434, Art. 2(i))

Summary

1. The Court has jurisdiction under Article 234 EC to interpret the provisions of a directive even though they do not directly govern the situation at issue in the main proceedings but the national legislature has decided, when transposing the provisions of the directive into national law, to treat purely internal situations in the same way as those governed by the directive and has therefore aligned the provisions governing purely internal situations with Community law.

Where, in regulating purely internal situations, domestic legislation adopts the same solutions as those adopted in Community law in order, particularly, to avoid the appearance of discrimination against foreign nationals or any distortion of competition, it is clearly in the Community interest that, in order to forestall future differences of interpretation, provisions or concepts taken from Community law should be interpreted uniformly, irrespective of the circumstances in which they are to apply.

( see paras 17-19 )

2. Article 2(c) and (i) of Directive 90/434 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States must be interpreted as meaning that there is no transfer of assets, in the form of a transfer of a branch of activity, within the meaning of that directive where the terms of a transaction are such that the proceeds of a significant loan contracted by the transferring company remain with that company and the obligations arising from the loan are transferred to the company receiving the transfer. For a transfer of assets to be covered by the directive, it is necessary that the assets and liabilities relating to a branch of activity should be transferred in their entirety.

It is immaterial in this regard that the transferring company retains a small number of shares in a third company, as that fact is not such as to exclude a transfer of a branch of activity unrelated to those shares.

( see paras 24, 25, 28, 29 and operative part 1 )

3. The question whether a transfer of assets involves an independent business within the meaning of Article 2(i) of Directive 90/434, that is to say, an entity capable of functioning by its own means, must be assessed primarily from a functional point of view - the assets transferred must be able to operate as an independent undertaking without needing to have recourse, for that purpose, to additional investments or transfers of assets - and only secondarily from a financial point of view, this being a matter to be left to the assessment of the national court in view of the special circumstances of each case. That will, more particularly, be the case where a credit facility necessary for the future cash-flow requirements of the company receiving the transfer must be granted to it by a financial institution in return for security provided in the form of shares representing the capital of that company.

( see paras 35, 37 and 38, and operative part 2 )