Judgment of the Court of 3 October 2012 in Case E-15/11 — Arcade Drilling AS v The Norwegian State, represented by Tax Region West (Freedom of establishment — Articles 31 and 34 EEA — Taxation — Anti-avoidance principles — Proportionality)
Date: 2012-10-03
Institutions: EFTA Court
Subjects: Norway, legal domicile, principle of proportionality, right of establishment, tax avoidance








C_2013029EN.01000701.xml










31.1.2013   


EN


Official Journal of the European Union


C 29/7





JUDGMENT OF THE COURT
of 3 October 2012
in Case E-15/11
Arcade Drilling AS v The Norwegian State, represented by Tax Region West
(Freedom of establishment — Articles 31 and 34 EEA — Taxation — Anti-avoidance principles — Proportionality)
2013/C 29/08
In Case E-15/11 Arcade Drilling AS v The Norwegian State, represented by Tax Region West — REQUEST to the Court under Article 34 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice by Oslo tingrett (Oslo District Court), concerning the interpretation of Articles 31 and 34 of the EEA Agreement, the Court, composed of Carl Baudenbacher, President, Per Christiansen and Páll Hreinsson (Judge-Rapporteur), Judges, gave judgment on 3 October 2012, the operative part of which is as follows:






1.


In the absence of clear and precise provisions of national law that a company moving its head office outside the State of incorporation must liquidate, and of any decision by the competent authorities and courts putting the liquidation into effect, the relocation of head office to another EEA State does not frustrate the company‘s right to rely on Article 31 EEA. In such circumstances, the company may rely on Article 31 EEA to challenge the lawfulness of a tax imposed on it by the home State on the occasion of the relocation of its head office to another EEA State.
The definitive establishment of the amount of tax payable by a company that relocates its head office outside the realm of Norway based on the assessment of the tax authorities that it is in avoidance of taxation consequent to an obligation to wind up and liquidate the company pursuant to national company law, constitutes a restriction under Articles 31 and 34 EEA if companies deemed to be in breach of such an obligation, but not seeking relocation, are not subject to liquidation taxation.










2.


The definitive establishment of the amount of tax payable by a company based on the assessment of the tax authorities that the company is in avoidance of taxation consequent to an obligation to wind up and liquidate the company pursuant to national company law may be justified on the grounds of maintaining the balanced allocation of powers of taxation between the EEA States and preventing tax avoidance. These grounds constitute overriding reasons in the public interests. Moreover, the definitive establishment of the amount of tax payable by a company is appropriate in relation to ensuring the attainment of these objectives.
The definitive establishment of the amount of tax payable by a company based on the assessment of the tax authorities in the EEA State of origin that the company is in avoidance of taxation consequent to an obligation to wind up and liquidate the company pursuant to national company law must be regarded as not going beyond what is necessary to attain the objectives relating to the need to maintain the balanced allocation of powers of taxation between the EEA States and to prevent tax avoidance, insofar as it provides for the consideration of objective and verifiable elements in order to determine whether the relocation of a head office represents an arrangement incompatible with the rules of domestic company law.
If the consideration of objective and verifiable elements leads to the conclusion that the company is not in compliance with the rules of national company law and should therefore be subject to liquidation, the definitive establishment of the amount of tax payable must be confined to the consequences of liquidation in order to remain compatible with the principle of proportionality. It is for the national court to verify whether the decision at issue in the main proceedings goes beyond what is necessary to attain the objectives pursued by the legislation.
A national measure that prescribes the immediate recovery of tax on unrealised assets and tax positions at the time of the assessment of the tax authorities that a company has lost its status as a separate legal entity under national law, but without any decision by the authorities or courts competent to determine that the company has lost that status, is precluded by Article 31 EEA.