CELEX: C2003/184/35
Language: en
Date: 2003-08-02 00:00:00
Title: Case C-219/03: Action brought on 19 May 2003 by the Commission of the European Communities against the Kingdom of Spain

C 184/20                EN                         Official Journal of the European Union                                          2.8.2003
Action brought on 19 May 2003 by the Commission of the                           from investing their capital in shares quoted on markets
   European Communities against the Kingdom of Spain                             other than Spanish regulated markets; moreover, it is
                                                                                 probably the case that such legislation prevents those
                                                                                 undertakings whose shares are quoted in such markets
                           (Case C-219/03)                                       from raising capital in Spain. Furthermore, the differen-
                                                                                 tiated treatment affects the conduct of undertakings which
                                                                                 issue shares, in particular because Spanish undertakings,
                           (2003/C 184/35)                                       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-
An action against the Kingdom of Spain was brought before                        able tax regime.
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-                Moreover, the Spanish legislation in issue also constitutes an
rero, with an address for service in Luxembourg.                           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
The applicant claims that the Court should:
                                                                           from providing services to Spanish undertakings by creating a
                                                                           split in the European market in services provided by the stock
1.    Declare that, with regard to the tax on capital gains made           markets and exchanges, creating a captive market which
      on transfers since 1 January 1997 of shares purchased                favours Spanish regulated markets. Under those circumstances,
      prior to 31 December 1994, the Kingdom of Spain has                  such undertakings are not free to choose another European
      failed to fulfil its obligations under Articles 49 and 56 of         market from among those which offer a better service.
      the EC Treaty and the corresponding Articles 36 and 40
      of the EEA Agreement inasmuch as it established a tax
      regime which is less favourable to shares quoted in
      markets other than Spanish regulated markets; and
2.    Order the Kingdom of Spain to pay the costs.
                                                                           Action brought on 22 May 2003 by the Italian Republic
                                                                             against the Commission of the European Communities
Pleas in law and main arguments
The Commission is of the view that Spanish legislation                                              (Case C-224/03)
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                                          (2003/C 184/36)
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:                                                   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,
when determining the reduction of the amount of the taxable                represented by Ivo Maria Braguglia, acting as Agent, assisted
capital gain, a higher weighting is applied to shares quoted on            by State Advocate, Maurizio Fiorilli.
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.                               The applicant claims that the Court should:
—     in order not to be liable to tax, shares quoted on markets
                                                                           —     Declare that, under Article 97 of the Treaty establishing
      other than Spanish regulated markets must have been
                                                                                 the European Coal and Steel Community, with effect from
      owned by their proprietor for longer (eight years instead
                                                                                 24 July 2002 the powers and competence of the
      of five).
                                                                                 Commission of the European Communities established
                                                                                 by Article 9 of the Treaty of 8 April 1965 (Merger Treaty)
—     The Spanish legislation is thus contrary to Article 56 EC                  — in the sectors assigned under the ECSC Treaty to the
      and Article 40 of the Agreement on the European                            High Authority of the ECSC — have lapsed, with the
      Economic Area (EEA) inasmuch as it constitutes an                          result that any measure adopted or to be adopted by it in
      obstacle to the free movement of capital. By establishing                  those sectors which have not formed the subject-matter of
      a less-favourable tax treatment, the Spanish legislation                   a new agreement by the signatory states, is to be deemed
      appears to deter natural persons liable to income tax                      null and void and of no effect.