CELEX: C2006/096/13
Language: en
Date: 2006-04-22 00:00:00
Title: Case C-104/06: Action brought on  22 February 2006  by the Commission of the European Communities against the Kingdom of Sweden

22.4.2006   
            
            
               EN
            
            
               Official Journal of the European Union
            
            
               C 96/7
            
         Action brought on 22 February 2006 by the Commission of the European Communities against the Kingdom of Sweden
   (Case C-104/06)
   (2006/C 96/13)
   Language of the case: Swedish
   An action against the Kingdom of Sweden was brought before the Court of Justice of the European Communities on 22 February 2006 by the Commission of the European Communities, represented by L. Ström van Lier and R. Lyal, acting as Agents, with an address for service in Luxembourg.
   The Commission claims that the Court should:
   
               1.
            
            
               declare that, by adopting and maintaining in force tax legislation according to which deferred taxation on capital gains which arise on the sale of owner-occupied property when the taxable person acquires a replacement property is permitted only if the property sold and the property acquired are both within Swedish territory, the Kingdom of Sweden has failed to fulfil its obligations under Articles 18, 39, 43 and 56(1) EC and Articles 28, 31 and 40 EEA.
            
         
               2.
            
            
               order the Kingdom of Sweden to pay the costs.
            
         Pleas in law and main arguments
   Swedish income tax law contains provisions on deferred taxation on the sale of private immovable property and the rights thereto. A taxpayer may defer taxation if he/she accounts for capital gains on the basis of a sale which includes a permanent dwelling in Sweden and has acquired or intends to acquire a replacement property in Sweden and has moved or intends to move into the replacement property. However, no deferral of taxation is permitted if the properties sold and newly acquired are situated outside Swedish territory. The above conditions constitute a clear obstacle to the exercise of the fundamental freedoms enshrined in the EC Treaty and the EEA Agreement.
   The Swedish rules are not appropriate to ensure the coherence of the Swedish tax system since, with regard to a single taxpayer, there is no direct link between the fiscal advantage (the deferred taxation) and the compensation for that advantage through a tax levy within the framework of the same taxation. In all the circumstances, the Swedish rules are disproportionate to the aim they seek to achieve.