Case C-224/03: Action brought on 22 May 2003 by the Italian Republic against the Commission of the European Communities
Date: 2003-08-02
Institutions: Court of Justice
Subjects: ECSC Treaty, European Commission, Italy, action for annulment (EU)

C 184/20

EN

Official Journal of the European Union

2.8.2003

Action brought on 19 May 2003 by the Commission of the
European Communities against the Kingdom of Spain

(Case C-219/03)

(2003/C 184/35)

An action against the Kingdom of Spain was brought before
the Court of Justice of the European Communities on 19 May
2003 by the Commission of
the European Communities,
represented by M. Díaz-Llanos La Roche and L. Escobar Guer-
rero, with an address for service in Luxembourg.

The applicant claims that the Court should:

1. Declare that, with regard to the tax on capital gains made
on transfers since 1 January 1997 of shares purchased
prior to 31 December 1994, the Kingdom of Spain has
failed to fulfil its obligations under Articles 49 and 56 of
the EC Treaty and the corresponding Articles 36 and 40
of the EEA Agreement inasmuch as it established a tax
regime which is
favourable to shares quoted in
markets other than Spanish regulated markets; and

less

2. Order the Kingdom of Spain to pay the costs.

Pleas in law and main arguments

The Commission is of
the view that Spanish legislation
concerning income tax on natural persons is incompatible
with Community law and constitutes an obstacle to the free
movement of capital and the freedom to provide services so
far as concerns tax on capital gains made on transfers since
1 January 1997 of shares purchased prior to 31 December
1994. Such legislation establishes for Spanish regulated markets
a more favourable tax regime than that applicable to shares
quoted on other markets:

when determining the reduction of the amount of the taxable
capital gain, a higher weighting is applied to shares quoted on
Spanish regulated markets than to shares quoted on other
markets (25 % as compared to 14,28 %). The latter are there-
fore subjected to a more onerous tax burden.

— in order not to be liable to tax, shares quoted on markets
other than Spanish regulated markets must have been
owned by their proprietor for longer (eight years instead
of five).

— The Spanish legislation is thus contrary to Article 56 EC
the Agreement on the European
and Article 40 of
Economic Area (EEA)
it constitutes an
obstacle to the free movement of capital. By establishing
the Spanish legislation
a less-favourable tax treatment,
appears to deter natural persons liable to income tax

inasmuch as

it

from investing their capital in shares quoted on markets
other
is
than Spanish regulated markets; moreover,
probably the case that such legislation prevents those
undertakings whose shares are quoted in such markets
from raising capital
in Spain. Furthermore, the differen-
tiated treatment affects the conduct of undertakings which
issue shares,
in particular because Spanish undertakings,
which are more likely to have shareholders who are liable
to Spanish income tax, are encouraged to see to it that
their shares are quoted on a Spanish regulated market so
that their shareholders may benefit from a more favour-
able tax regime.

Moreover, the Spanish legislation in issue also constitutes an
obstacle to the freedom to provide services, guaranteed under
Article 49 EC and Article 36 of the EEA Agreement, inasmuch
as it hinders markets other than Spanish regulated markets
from providing services to Spanish undertakings by creating a
split in the European market in services provided by the stock
markets and exchanges, creating a captive market which
favours Spanish regulated markets. Under those circumstances,
such undertakings are not free to choose another European
market from among those which offer a better service.

Action brought on 22 May 2003 by the Italian Republic
against the Commission of the European Communities

(Case C-224/03)

(2003/C 184/36)

An action against the Commission of the European Commu-
nities was brought before the Court of Justice of the European
Communities on 22 May 2003, by the Italian Republic,
represented by Ivo Maria Braguglia, acting as Agent, assisted
by State Advocate, Maurizio Fiorilli.

The applicant claims that the Court should:

and competence of

— Declare that, under Article 97 of the Treaty establishing
the European Coal and Steel Community, with effect from
24 July 2002 the powers
the
Commission of
the European Communities established
by Article 9 of the Treaty of 8 April 1965 (Merger Treaty)
— in the sectors assigned under the ECSC Treaty to the
the ECSC — have lapsed, with the
High Authority of
result that any measure adopted or to be adopted by it in
those sectors which have not formed the subject-matter of
a new agreement by the signatory states, is to be deemed
null and void and of no effect.

2.8.2003

EN

Official Journal of the European Union

C 184/21

Pleas in law and new arguments

In general terms, for the provisions of an international treaty
to be able to continue to have effect after its natural expiry a
decision in that behalf must be taken in concertation by the
signatory States and only by them.

No joint position was adopted by the signatory States of the
ECSC Treaty, prior
to the expiry thereof, with a view to
extending its validity in its entirety and to providing for a
general transitional regime to ensure the continuance in effect
of all
its provisions. Instead the signatory States allowed the
ECSC Treaty to be extinguished, merely regulating the transfer
of ECSC provisions to the EC regime in regard to certain
sectors. In particular, no joint provision was made in regard
to a transitional regime in competition matters under the ECSC
Treaty. In the case of investigations under way at the time of
expiry of the ECSC Treaty such expiry could not be claimed to
be ‘non-retroactive’ since that would entail the continuance in
effect of its provisions, no right, obligation or legal situation
arising during the currency of the Treaty itself.

From the applicant's point of view, absorption of the ECSC
rules within the EC rules may occur only by way of an
instrument manifesting the common will in that regard of the
signatory states.

Action brought on 28 May 2003 by the Commission of
the Republic of
the European Communities

against

Finland

(Case C-232/03)

(2003/C 184/37)

An action against the Republic of Finland was brought before
the Court of Justice of the European Communities on 28 May
2003 by the Commission of
the European Communities,
represented by D. Martin and I. Koskinen, acting as Agents,
with an address for service in Luxembourg.

The Commission claims that the Court should:

1. Declare that, by preventing cross-frontier workers from
benefiting from certain benefits provided to them by their
employers on the sole ground that the workers in ques-
tion live in the Republic of Finland,
into which the
vehicles owned by their employers have been imported,
the Republic of Finland has failed to fulfil its obligations
under Articles 10 EC and 39 EC;

2. Order Finland to pay the costs.

vehicle registered abroad. They require payment of the car tax
chargeable in Finland before the vehicle may be used. Car tax
is to be levied on vehicles which are used in traffic in Finland,
even to a small extent, unless a specific exception is laid down
by law.

Under the Finnish provisions, car tax is to be paid on a vehicle
before it is used on Finnish territory. If the vehicle is never-
theless used without paying tax in cases in which tax should
have been regarded as paid, the authorities levy tax on the
vehicle.

The Finnish legislation, contrary to Article 39 EC, prevents the
realisation of
freedom of movement of workers, because
employees living in Finland cannot use a car provided by their
employer and registered in another Member State for their
work in Finland, if tax is not paid on the car in Finland. As
a result of the Finnish legislation, employees resident in Finland
cannot accept an offer of work from a neighbouring State of
the European Union where the use in both countries of a car
provided by the employer is part of the work.

Companies operating in another Member State cannot engage
employees living in Finland because they cannot use a car
registered in another country in Finland if Finnish tax has not
been paid on the car. The practice discriminates in particular
against cross-frontier workers living in Finland, who cannot
use a car provided by the employer for daily work journeys
between the home and the workplace. The use of a car
provided by the employer
the
remuneration. A Member State breaches the duty of coopera-
tion under Article 10 EC if
the
Member State prevent freedom of movement in such a way
that workers living in another Member State cannot pursue
their occupation in the other Member State.

is often a regular part of

the national measures of

Reference for a preliminary ruling by the Audiencia
Nacional by order of that Court of 16 April 2003 in the
case of Contse S.A., Vivisol SRL and Oxigen Salud S.A.
against INSALUD (now INGESA)

(Case C-234/03)

(2003/C 184/38)

Pleas in law and main arguments

the possibility for a
Provisions of Finnish legislation limit
person permanently resident in Finland to use in Finland a

the
Reference has been made to the Court of
European Communities by order of
the Audiencia Nacional
(National High Court) of 16 April 2003, received at the Court
Registry on 2 June 2003, for a preliminary ruling in the case
of Contse S.A., Vivisol SRL and Oxigen Salud S.A. against
INSALUD (now INGESA) on the following questions:

Justice of