N v Inspecteur van de Belastingdienst Oost/kantoor Almelo.
Date: 2006-09-07
22. It should be noted in that regard that Article 18 EC, which sets out generally the right of every citizen of the Union to move and reside freely within the territory of the Member States, finds specific expression in Article 43 EC (Case C‑193/94 Skanavi and Chryssanthakopoulos  [1996] ECR I-929, paragraph 22).
26. In that respect, and in accordance with well-established case-law, the concept of "establishment" within the meaning of the Treaty is a very broad one, allowing a Community national to participate, on a stable and continuous basis, in the economic life of a Member State other than his State of origin (Case C‑55/94 Gebhard  [1995] ECR I-4165, paragraph 25). More particularly, the Court has held that a 100% holding in the capital of a company having its seat in another Member State undoubtedly brings such a taxpayer within the scope of application of the Treaty provisions on the right of establishment (Case C‑251/98 Baars  [2000] ECR I‑2787, paragraph 21).
27. Where a Community national lives in one Member State and has a shareholding in the capital of a company established in another Member State which gives him substantial influence over the company’s decisions and allows him to determine its activities, as is always the case where he holds 100% of the shares, that may thus fall within the freedom of establishment (see, to that effect, Baars , paragraphs 22 and 26).
28. The situation here is that of a Community national who, since the transfer of his residence, has been living in one Member State and holding all the shares of companies established in another. It follows that, since that transfer, N has fallen within the scope of Article 43 EC (see, to that effect, Case C‑152/03 Ritter‑Coulais  [2006] ECR I-1711, paragraph 32).
33. In that regard, it must be borne in mind that, according to settled case-law, although direct taxation falls within their competence, Member States must none the less exercise that competence consistently with Community law ( de Lasteyrie du Saillant , paragraph 44; Case C-446/03 Marks & Spencer  [2005] ECR I-10837, paragraph 29).
35. In this case, analogously with what the Court has already found in relation to a similar system ( de Lasteyrie du Saillant , paragraph 46), a taxpayer wishing to transfer his residence outside Netherlands territory, in exercise of the rights guaranteed to him by Article 43 EC, was subjected at the time of the facts to disadvantageous treatment in comparison with a person who maintained his residence in the Netherlands. That taxpayer became liable, simply by reason of such a transfer, to tax on income which had not yet been realised and which he therefore did not have, whereas, if he had remained in the Netherlands, increases in value would have become taxable only when, and to the extent that, they were actually realised. That difference in treatment was likely to discourage the person concerned from transferring his residence outside the Netherlands.
36. An examination of the rules for applying that measure confirms that conclusion. Although it is possible to benefit from suspension of payment, that is not automatic and it is subject to conditions, such as the provision of guarantees. Those guarantees in themselves constitute a restrictive effect, in that they deprive the taxpayer of the enjoyment of the assets given as a guarantee (see, to that effect, de Lasteyrie du Saillant , paragraph 47).
40. According to well-established case-law, however, national measures which are liable to hinder the exercise of fundamental freedoms guaranteed by the Treaty or make them less attractive may nevertheless be allowed if they pursue a legitimate objective in the public interest, are appropriate to ensuring the attainment of that objective, and do not go beyond what is necessary to attain it (see, to that effect de Lasteyrie du Saillant , paragraph 49).
42. This Court finds that preserving the allocation of the power to tax between Member States is a legitimate objective recognised by the Court of Justice (see, to that effect, Marks & Spencer , paragraph 45). In addition, in accordance with Article 293 EC, Member States are to negotiate with each other, as necessary, with a view to securing for the benefit of their nationals the abolition of double taxation within the Community.
43. However, apart from Convention 90/436/EEC on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (OJ 1990 L 225, p. 10), no unifying or harmonising measure for the elimination of double taxation has yet been adopted at Community level, and Member States have not yet concluded any multilateral convention to that effect under Article 293 EC (see, to that effect, Case C‑336/96 Gilly  [1998] I-2793, paragraph 23, and D , paragraph 50).
44. It is in that context that the Court has already held that, in the absence of any unifying or harmonising Community measures, Member States retain the power to define, by treaty or unilaterally, the criteria for allocating their powers of taxation, particularly with a view to eliminating double taxation ( Gilly , paragraphs 24 and 30; Case C-307/97 Saint‑Gobain ZN  [1999] ECR I-6161, paragraph 57; Case C‑385/00 de Groot  [2002] ECR I-11819, paragraph 93; Case C-513/03 van Hilten‑van der Heijden  [2006] ECR I-1957, paragraphs 47 and 48).
45. In this area, it is not unreasonable for the Member States to find inspiration in international practice and, particularly, the model conventions drawn up by the Organisation for Economic Cooperation and Development (OECD) ( Gilly , paragraph 31; van Hilten-van der Heijden , paragraph 48).
52. As the Advocate General has observed in paragraph 113 of her Opinion, the Community legislature has already taken harmonisation measures, which essentially pursue the same goal. In particular, Council Directive 77/799/EEC of 19 December 1977 concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation, certain excise duties and taxes on insurance premiums (OJ 1977 L 336, p. 15), as amended by Council Directive 2004/106/EC of 16 November 2004, allows a Member State to request from the compentent authorities of another Member State all the information enabling it to ascertain the correct amount of income tax (Case C-55/98 Vestergaard  [1999] ECR I‑7641, paragraph 26; Case C-422/01 Skandia and Ramstedt  [2003] ECR I-6817, paragraph 42).
53. Moreover, Council Directive 76/308/EEC of 15 March 1976 on mutual assistance for the recovery of claims resulting from operations forming part of the system of financing the European Agricultural Guidance and Guarantee Fund, and of the agricultural levies and customs duties (OJ 1976 L 73, p. 18), as amended by Council Directive 2001/44/EC of 15 June 2001 (OJ 2001 L 175, p. 17), provides that a Member State may request the assistance of another Member State in the recovery of debts relating to certain taxes, including those on income and capital.
59. As for the possibility of obtaining compensation for the damage arising from having to constitute a guarantee in order to be able to benefit from a deferment of payment of the tax in question, it is for the Member States, under the principle of cooperation laid down in Article 10 EC, to ensure the legal protection which individuals derive from the direct effect of Community law. In the absence of Community rules governing a matter, it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from the direct effect of Community law. However, such rules must not be less favourable than those governing similar domestic actions (principle of equivalence) nor render virtually impossible or excessively difficult the exercise of rights conferred by Community law (principle of effectiveness) (see, to that effect, Case 33/76 Rewe  v Landwirtschaftskammer für das Saarland  [1976] ECR 1989, paragraph 5; Case C-312/93 Peterbroeck  [1995] ECR I-4599, paragraph 12; and Joined Cases C-397/98 and C-410/98 Metallgesellschaft and Others  [2001] ECR I-1727).
60. The Court of Justice has, furthermore, already held that it is for national law, observing the principles referred to above, to settle all ancillary questions relating to the reimbursement of charges improperly levied, such as the payment of interest, including the rate of interest and the date from which it must be calculated (Case 26/74 Roquette Frères  v Commission  [1976] ECR 677, paragraphs 11 and 12; Case 130/79 Express Dairy Foods  [1980] ECR 1887, paragraphs 16 and 17; and Metallgesellschaft and Others , paragraph 86 ).
63. As for the conditions under which a Member State is liable to make reparation for loss and damage caused to individuals as a result of breaches of Community law for which it can be held responsible, the case-law of the Court of Justice shows that there are three, namely that the rule of law infringed must have been intended to confer rights on individuals, that the breach must be sufficiently serious, and that there must be a direct causal link between the breach of the obligation resting on the State and the loss or damage sustained by the injured parties. Those conditions are to be applied according to each type of situation (Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur and Factortame  [1996] ECR I-1029, paragraph 51; Joined Cases C-178/94, C‑179/94 and C-188/94 to C‑190/94 Dillenkofer and Others  [1996] ECR I‑4845, paragraph 21; and Case C‑424/97 Haim  [2000] ECR I-5123, paragraph 36).
64. More particularly concerning the second condition, the Court has held that a breach of Community law will be sufficiently serious where, in the exercise of its legislative power, a Member State manifestly and gravely disregarded the limits on its discretion ( Factortame , par agraph 55; Dillenkofer , paragraph 25) and that where, at the time when it committed the infringement, the Member State in question had only considerably reduced, or even no, discretion, the mere infringement of Community law may be sufficient to establish the existence of a sufficiently serious breach (Case C‑5/94 Hedley Lomas [1996] ECR I-2553, paragraph 28).
65. In order to determine whether a breach of Community law is sufficiently serious, the national court hearing a claim for compensation must take account of all the factors which characterise the situation which is brought before it. Those factors include, in particular, the clarity and precision of the rule infringed, whether the infringement and the damage caused was intentional or involuntary, whether any error of law was excusable or inexcusable, and the fact that the position taken by a Community institution may have contributed towards the adoption or maintenance of national measures or practices contrary to Community law ( Factortame , paragraph 56; Haim , paragraph 43).
69. However, it is clear from the case-law that the need to provide an interpretation of Community law which will be of use to the national court makes it necessary that the national court define the factual and legislative context of the questions it is asking or, at the very least, explain the factual circumstances on which those questions are based (see, in particular, Joined Cases C-320/90 to C-322/90 Telemarsicabruzzo and Others  [1993] ECR I-393, paragraphs 6 and 7; Case C‑67/96 Albany  [1999] ECR I-5751, paragraph 39; and Case C‑176/96 Lehtonen and Castors Braine  [2000] ECR I-2681, paragraph 22).
70. The information provided in decisions making references must not only enable the Court to reply usefully but also give the governments of the Member States and other interested parties the opportunity to submit observations pursuant to Article 23 of the EC Statute of the Court of Justice. It is the Court’s duty to ensure that that opportunity is safeguarded, bearing in mind that, by virtue of the abovementioned provision, only the decisions making references are notified to the interested parties (see, in particular, the order in Case C‑458/93 Saddik  [1995] ECR I-511, paragraph 13, and the judgments in Albany , paragraph 40, and Lehtonen , paragraph 23).