Case C-43/07: Judgment of the Court (Third Chamber) of 11 September 2008 (reference for a preliminary ruling from the Hoge Raad der Nederlanden (Netherlands)) — D.M.M.A. Arens-Sikken v Staatssecretaris van Financiën (Free movement of capital — Articles 73b and 73d of the EC Treaty (now Articles 56 EC and 58 EC respectively) — National rules concerning inheritance duties and transfer duties which do not provide for the deduction, in the assessment of those duties, of overendowment debts resulting from a testamentary parental partition inter vivos where the person whose estate is being administered was not residing, at the time of death, in the Member State in which the immovable property included in the estate is situated — Restriction — Justification — None — No bilateral agreement for the prevention of double taxation — Consequences for the restriction of the free movement of capital of a lower level of compensation to prevent double taxation in that person's Member State of residence)
Date: 2008-09-11
Institutions: Court of Justice
Subjects: capital transfer tax, debt, inheritance, interpretation of the law, law of succession, real property, tax system

8.11.2008

EN

Official Journal of the European Union

C 285/7

Re:

Parties to the main proceedings

Preliminary ruling — Hof van beroep te Gent — Interpretation
of Articles 12 EC, 17 EC, 18 EC, 56 EC and 58 EC — National
legislation on the calculation of duty payable in respect of the
acquisition, through inheritance, of immovable property which
does not allow for deduction, from the value of the immovable
property, of mortgage-related charges relating to that property
on the ground that the testator, at the time of death, was resi-
dent in another Member State

Applicant: D.M.M.A. Arens-Sikken

Defendant: Staatssecretaris van Financiën

Operative part of the judgment

Re:

The combined provisions of Articles 56 EC and 58 EC must be inter-
preted as precluding national legislation, such as that at issue in the
main proceedings,
inheritance and
concerning the assessment of
transfer duties payable in respect of an immovable property situated in
a Member State, which makes no provision for the deductibility of
debts secured on such property where the person whose estate is being
administered was residing, at the time of death, not in that State but
in another Member State, whereas provision is made for such deduct-
ibility where that person was, at
time, residing in the first-
mentioned Member State, in which the immovable property included in
the estate is situated.

that

(1) OJ C 56, 10.3.2007.

Preliminary ruling — Hoge Raad der Nederlanden — Interpreta-
tion of Articles 56 EC and 58 EC — National rules on the
calculation of inheritance duty payable on immovable property
which do not allow for deduction, from the value of immovable
property, of debts associated with the testamentary partition in
the case where the testator was resident in another Member
State at the time of his death — Method of comparison applic-
able for the purpose of determining the amount of inheritance
duty in the case where the testator was resident, at the time of
his death, in the Member State in which the immovable prop-
erty is situated — Bilateral convention designed to prevent
double taxation

Operative part of the judgment

1. Articles 73b and 73d of the Treaty (subsequently, Articles 56 EC
and 58 EC respectively) must be interpreted as precluding national
rules, such as those at issue in the main proceedings, concerning
the assessment of inheritance duties and transfer duties payable in
respect of an immovable property situated in a Member State,
which, for the assessment of those duties, makes no provision for
the deductibility of overendowment debts resulting from a testamen-
tary parental partition inter vivos where the person whose estate is
being administered was residing, at the time of death, not in that
State but in another Member State, whereas provision is made for
such deductibility where that person was residing, at the time of
death, in the first-mentioned Member State, in which the immo-
vable property included in the estate is situated, in so far as such
rules apply a progressive rate of taxation and in so far as the
combination of (i) the failure to take into account such debts and
(ii) that progressive rate could result in a greater tax burden for
heirs who are not in a position to rely on such deductibility.

2. The answer set out in point 1 of the operative part of this judgment
is not affected by the fact that the rules of the Member State in
which the person whose estate is being administered was residing at
the time of death provide unilaterally for the possibility that a tax
credit may be granted in respect of inheritance duties payable in
another Member State on immovable property situated in that
other State.

(1) OJ C 69, 24.3.2007.

Judgment of the Court (Third Chamber) of 11 September
2008 (reference
a preliminary ruling from the
Hoge Raad der Nederlanden (Netherlands)) — D.M.M.A.
Arens-Sikken v Staatssecretaris van Financiën

for

(Case C-43/07) (1)

(Free movement of capital — Articles 73b and 73d of the EC
Treaty (now Articles 56 EC and 58 EC respectively) —
National rules concerning inheritance duties and transfer
duties which do not provide for the deduction, in the assess-
ment of those duties, of overendowment debts resulting from a
testamentary parental partition inter vivos where the person
whose estate is being administered was not residing, at the
time of death, in the Member State in which the immovable
property included in the estate is situated — Restriction —
Justification — None — No bilateral agreement for the
prevention of double taxation — Consequences for the restric-
tion of the free movement of capital of a lower level of
compensation to prevent double taxation in that person's
Member State of residence)

(2008/C 285/10)

Language of the case: Dutch

Referring court

Hoge Raad der Nederlanden