Commission of the European Communities v French Republic.
Date: 1986-01-28
13 IT MUST BE STATED FIRSTLY THAT ARTICLE 52 OF THE EEC TREATY EMBODIES ONE OF THE FUNDAMENTAL PRINCIPLES OF THE COMMUNITY AND HAS BEEN DIRECTLY APPLICABLE IN THE MEMBER STATES SINCE THE END OF THE TRANSITIONAL PERIOD . BY VIRTUE OF THAT PROVISION , FREEDOM OF ESTABLISHMENT FOR NATIONALS OF ONE MEMBER STATE ON THE TERRITORY OF ANOTHER INCLUDES THE RIGHT TO TAKE UP AND PURSUE ACTIVITIES AS SELF-EMPLOYED PERSONS AND TO SET UP AND MANAGE UNDERTAKINGS UNDER THE CONDITIONS LAID DOWN FOR ITS OWN NATIONALS BY THE LAW OF THE COUNTRY WHERE SUCH ESTABLISHMENT IS EFFECTED . THE ABOLITION OF RESTRICTIONS ON FREEDOM OF ESTABLISHMENT ALSO APPLIES TO RESTRICTIONS ON THE SETTING UP OF AGENCIES , BRANCHES OR SUBSIDIARIES BY NATIONALS OF ANY MEMBER STATE ESTABLISHED IN THE TERRITORY OF ANY MEMBER STATE .
14 ARTICLE 52 IS THUS INTENDED TO ENSURE THAT ALL NATIONALS OF MEMBER STATES WHO ESTABLISH THEMSELVES IN ANOTHER MEMBER STATE , EVEN IF THAT ESTABLISHMENT IS ONLY SECONDARY , FOR THE PURPOSE OF PURSUING ACTIVITIES THERE AS A SELF-EMPLOYED PERSONS RECEIVE THE SAME TREATMENT AS NATIONALS OF THAT STATE AND IT PROHIBITS , AS A RESTRICTION ON FREEDOM OF ESTABLISHMENT , ANY DISCRIMINATION ON GROUNDS OF NATIONALITY RESULTING FROM THE LEGISLATION OF THE MEMBER STATE .
18 IT MUST FIRST BE EMPHASIZED IN THAT REGARD THAT FREEDOM OF ESTABLISHMENT , WHICH ARTICLE 52 GRANTS TO NATIONALS OF ANOTHER MEMBER STATE AND WHICH ENTAILS THEIR RIGHT TO TAKE UP AND PURSUE ACTIVITIES AS SELF-EMPLOYED PERSONS UNDER THE CONDITIONS LAID DOWN FOR ITS OWN NATIONALS BY THE LAW OF THE COUNTRY WHERE SUCH ESTABLISHMENT IS EFFECTED , INCLUDES , PURSUANT TO ARTICLE 58 OF THE EEC TREATY , THE RIGHT OF COMPANIES OR FIRMS FORMED IN ACCORDANCE WITH THE LAW OF A MEMBER STATE AND HAVING THEIR REGISTERED OFFICE , CENTRAL ADMINISTRATION OR PRINCIPAL PLACE OF BUSINESS WITHIN THE COMMUNITY TO PURSUE THEIR ACTIVITIES IN THE MEMBER STATE CONCERNED THROUGH A BRANCH OR AGENCY . WITH REGARD TO COMPANIES , IT SHOULD BE NOTED IN THIS CONTEXT THAT IT IS THEIR REGISTERED OFFICE IN THE ABOVE-MENTIONED SENSE THAT SERVES AS THE CONNECTING FACTOR WITH THE LEGAL SYSTEM OF A PARTICULAR STATE , LIKE NATIONALITY IN THE CASE OF NATURAL PERSONS . ACCEPTANCE OF THE PROPOSITION THAT THE MEMBER STATE IN WHICH A COMPANY SEEKS TO ESTABLISH ITSELF MAY FREELY APPLY TO IT A DIFFERENT TREATMENT SOLELY BY REASON OF THE FACT THAT ITS REGISTERED OFFICE IS SITUATED IN ANOTHER MEMBER STATE WOULD THUS DEPRIVE THAT PROVISION OF ALL MEANING .
20 SINCE THE RULES AT ISSUE PLACE COMPANIES WHOSE REGISTERED OFFICE IS IN FRANCE AND BRANCHES AND AGENCIES SITUATED IN FRANCE OF COMPANIES WHOSE REGISTERED OFFICE IS ABROAD ON THE SAME FOOTING FOR THE PURPOSES OF TAXING THEIR PROFITS , THOSE RULES , CANNOT , WITHOUT GIVING RISE TO DISCRIMINATION , TREAT THEM DIFFERENTLY IN REGARD TO THE GRANT OF AN ADVANTAGE RELATED TO TAXATION , SUCH AS SHAREHOLDERS '  TAX CREDITS . BY TREATING THE TWO FORMS OF ESTABLISHMENT IN THE SAME WAY FOR THE PURPOSES OF TAXING THEIR PROFITS , THE FRENCH LEGISLATURE HAS IN FACT ADMITTED THAT THERE IS NO OBJECTIVE DIFFERENCE BETWEEN THEIR POSITIONS IN REGARD TO THE DETAILED RULES AND CONDITIONS RELATING TO THAT TAXATION WHICH COULD JUSTIFY DIFFERENT TREATMENT .
21 NOTWITHSTANDING THE FRENCH GOVERNMENT ' S ARGUMENT TO THE CONTRARY , THE DIFFERENCE IN TREATMENT ALSO CANNOT BE JUSTIFIED BY ANY ADVANTAGES WHICH BRANCHES AND AGENCIES MAY ENJOY VIS-A-VIS COMPANIES AND WHICH , ACCORDING TO THE FRENCH GOVERNMENT , BALANCE OUT THE DISADVANTAGES RESULTING FROM THE FAILURE TO GRANT THE BENEFIT OF SHAREHOLDERS '  TAX CREDITS . EVEN IF SUCH ADVANTAGES ACTUALLY EXIST , THEY CANNOT JUSTIFY A BREACH OF THE OBLIGATION LAID DOWN IN ARTICLE 52 TO ACCORD FOREIGN COMPANIES THE SAME TREATMENT IN REGARD TO SHAREHOLDERS '  TAX CREDITS AS IS ACCORDED TO FRENCH COMPANIES . IT IS ALSO NOT NECESSARY IN THIS CONTEXT TO ASSESS THE EXTENT OF THE DISADVANTAGES WHICH BRANCHES AND AGENCIES OF FOREIGN INSURANCE COMPANIES SUFFER AS A RESULT OF THE FAILURE TO GRANT THEM THE BENEFIT OF SHAREHOLDERS '  TAX CREDITS AND TO CONSIDER WHETHER THOSE DISADVANTAGES COULD HAVE ANY EFFECT ON THEIR TARIFFS , SINCE ARTICLE 52 PROHIBITS ALL DISCRIMINATION , EVEN IF ONLY OF A LIMITED NATURE .
22 FURTHERMORE , THE FACT THAT INSURANCE COMPANIES WHOSE REGISTERED OFFICE IS SITUATED IN ANOTHER MEMBER STATE ARE AT LIBERTY TO ESTABLISH THEMSELVES BY SETTING UP A SUBSIDIARY IN ORDER TO HAVE THE BENEFIT OF THE TAX CREDIT CANNOT JUSTIFY DIFFERENT TREATMENT . THE SECOND SENTENCE OF THE FIRST PARAGRAPH OF ARTICLE 52 EXPRESSLY LEAVES TRADERS FREE TO CHOOSE THE APPROPRIATE LEGAL FORM IN WHICH TO PURSUE THEIR ACTIVITIES IN ANOTHER MEMBER STATE AND THAT FREEDOM OF CHOICE MUST NOT BE LIMITED BY DISCRIMINATORY TAX PROVISIONS .
24 IT MUST FIRST BE NOTED THAT THE FACT THAT THE LAWS OF THE MEMBER STATES ON CORPORATION TAX HAVE NOT BEEN HARMONIZED CANNOT JUSTIFY THE DIFFERENCE OF TREATMENT IN THIS CASE . ALTHOUGH IT IS TRUE THAT IN THE ABSENCE OF SUCH HARMONIZATION , A COMPANY ' S TAX POSITION DEPENDS ON THE NATIONAL LAW APPLIED TO IT , ARTICLE 52 OF THE EEC TREATY PROHIBITS THE MEMBER STATES FROM LAYING DOWN IN THEIR LAWS CONDITIONS FOR THE PURSUIT OF ACTIVITIES BY PERSONS EXERCISING THEIR RIGHT OF ESTABLISHMENT WHICH DIFFER FROM THOSE LAID DOWN FOR ITS OWN NATIONALS .
26 FINALLY , THE FRENCH GOVERNMENT IS WRONG TO CONTEND THAT THE DIFFERENCE OF TREATMENT IN QUESTION IS DUE TO THE DOUBLE-TAXATION AGREEMENTS . THOSE AGREEMENTS DO NOT DEAL WITH THE CASES HERE AT ISSUE AS DEFINED ABOVE . MOREOVER , THE RIGHTS CONFERRED BY ARTICLE 52 OF THE TREATY ARE UNCONDITIONAL AND A MEMBER STATE CANNOT MAKE RESPECT FOR THEM SUBJECT TO THE CONTENTS OF AN AGREEMENT CONCLUDED WITH ANOTHER MEMBER STATE . IN PARTICULAR , THAT ARTICLE DOES NOT PERMIT THOSE RIGHTS TO BE MADE SUBJECT TO A CONDITION OF RECIPROCITY IMPOSED FOR THE PURPOSE OF OBTAINING CORRESPONDING ADVANTAGES IN OTHER MEMBER STATES .
27 CONSEQUENTLY , BY FAILING TO GRANT TO THE BRANCHES AND AGENCIES IN FRANCE OF INSURANCE COMPANIES WHOSE REGISTERED OFFICE IS IN ANOTHER MEMBER STATE THE BENEFIT OF SHAREHOLDERS '  TAX CREDITS IN RESPECT OF DIVIDENDS PAID BY FRENCH COMPANIES TO SUCH BRANCHES OR AGENCIES , ARTICLE 158 TER OF THE CODE GENERAL DES IMPOTS DOES NOT APPLY TO THOSE COMPANIES THE CONDITIONS LAID DOWN BY FRENCH LAW FOR INSURANCE COMPANIES WHOSE REGISTERED OFFICE IS IN FRANCE . THAT DISCRIMINATION CONSTITUTES A RESTRICTION ON THE RIGHT OF ESTABLISHMENT OF INSURANCE COMPANIES WHOSE REGISTERED OFFICE IS IN ANOTHER MEMBER STATE , WHICH IS CONTRARY TO THE FIRST AND SECOND PARAGRAPHS OF ARTICLE 52 OF THE EEC TREATY .