Européenne et Luxembourgeoise d’investissements SA (ELISA) v Directeur général des impôts and Ministère public.
Date: 2007-10-11
39. As regards the obligations imposed by Directive 77/799, it must first be stated that, under the combined the provisions of Article 1(1), (3), and (4) thereof, the competent authorities of the Member States are to exchange any information which may enable them to effect a correct assessment of taxes on income and capital and taxes and charges of a similar nature, such as the disputed tax.
40. Next, Article 2 of Directive 77/799 provides that this exchange of information is to occur at the request of the competent authority of the Member State concerned. As is clear from Article 3 of that directive, the competent authorities of the Member States are also to exchange information without prior request, automatically, in respect of certain categories of cases referred to in the directive or even, in accordance with Article 4 thereof, spontaneously.
42. Lastly, Article 11 of Directive 77/799 states that the provisions of the directive are not to impede the fulfilment of any wider obligations to exchange information which might flow from other legal acts.
58. As regards Article 73b of the Treaty, it must be pointed out that the right to acquire, use or dispose of immovable property on the territory of another Member State, which is the corollary of freedom of establishment, as is apparent from Article 54(3)(e) of the EC Treaty (now Article 44(2)(e) EC), generates capital movements when it is exercised (Case C‑370/05 Festersen  [2007] ECR I‑0000, paragraph 22, and case-law cited there).
59. According to settled case-law, capital movements include investments in immovable property on the territory of a Member State by non-residents, as is clear from the nomenclature of capital movements set out in Annex I to Council Directive 88/361/EEC of 24 June 1988 for the implementation of Article 67 of the Treaty [article repealed by the Treaty of Amsterdam] (OJ 1988 L 178, p. 5), that nomenclature retaining the same indicative value for the purposes of defining the notion of capital movements (see Festersen , paragraph 23 and case-law cited there).
60. It is common ground that the applicant in the main proceedings, as a holding companies incorporated under Luxembourg law, has purchased immovable property in France. There is no doubt that such a cross-border investment is a capital movement within the meaning of that nomenclature (see Case C‑376/03 D . [2005] ECR I‑5821, paragraph 24).
62. As regards Article 52 of the Treaty, it is clear from the case-law of the Court that freedom of establishment, which is conferred by that article on Community nationals and which entails for them access to, and pursuit of, activities as self-employed persons as well as the establishment and management of undertakings on the same conditions as those laid down for its own nationals by the laws of the Member State of establishment, includes the right of companies formed in accordance with the laws 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 subsidiary, a branch or an agency (Case C‑471/04 Keller Holding  [2006] ECR I‑2107, paragraph 29, and Case C‑386/04 Centro di Musicologia Walter Stauffer  [2006] ECR I‑8203, paragraph 17 and case-law there cited).
63. In addition, the concept of establishment within the meaning of the Treaty is a very broad one, implying that a Community national may participate, on a stable and continuous basis, in the economic life of a Member State other than his State of origin and to profit therefrom, so contributing to economic and social interpenetration within the Community in the sphere of activities as a self-employed person (see, inter alia, Centro di Musicologia Walter Stauffer , paragraph 18 and case-law there cited).
64. However, in order for the provisions relating to freedom of establishment to apply, it is generally necessary to have secured a permanent presence in the host Member State and, where immovable property is purchased and held, that that property should be actively managed ( Centro di Musicologia Walter Stauffer , paragraph 19).
68. In that regard, it is relevant to point out, by way of preliminary, that, according to settled case-law, while direct taxation falls within their competence, the Member States must none the less exercise that competence consistently with Community law (see, inter alia, Case C‑319/02 Manninen  [2004] ECR I‑7477, paragraph 19; Case C‑292/04 Meilicke and Others  [2007] ECR I‑0000, paragraph 19; and Case C‑157/05 Holböck  [2007] ECR I‑0000, paragraph 21).
69. It also follows from the case-law of the Court that the measures prohibited by Article 73b(1) of the Treaty, as restrictions on the movement of capital, include those which are likely to discourage non-residents from making investments in a Member State or to discourage that Member State’s residents from doing so in other States ( Festersen , paragraph 24 and case-law there cited).
75. It follows that, before legal persons which do not have their centre of management in France can benefit from the exemption from the disputed tax pursuant to Articles 990 D and 990 E(2) and (3) of the CGI, they, by contrast to other persons liable to the tax, must satisfy an additional condition, namely that there is a convention concluded between the French Republic and the State concerned.
76. In that regard, it must be observed that, in the absence of such a convention, a legal person which does not have its centre of management in France is deprived of the possibility of making a successful application for exemption from the disputed tax pursuant to Articles 990 D and 990 E(2) and (3) of the CGI. Given that only the States concerned can decide whether to bind themselves by means of conventions, the condition linked to the existence of a convention on administrative assistance or of a treaty may entail, for that category of legal persons, a de facto permanent regime of non-exemption from the disputed tax.
77. It follows that the requirements laid down by the national legislation at issue in the main proceedings in order to benefit from the exemption from the disputed tax make investment in immovable property in France less attractive for non-resident companies, such as the holding companies incorporated under Luxembourg law.
79. That being the case, what must be examined, thirdly and lastly, is whether the restriction resulting from the disputed tax is justified by an overriding requirement of general interest.
81. It is admittedly clear from the case-law of the Court that the prevention of tax evasion is an overriding requirement of general interest capable of justifying a restriction on freedom of movement (see Centro di Musicologia Walter Stauffer , paragraph 32, and Case C‑150/04 Commission  v Denmark  [2007] ECR I‑0000, paragraph 51 and the case-law there cited).
82. However, the restriction in question must be appropriate to the objective pursued, and must not go beyond what is necessary to attain that objective (see, to that effect, Manninen , paragraph 29; Centro di Musicologia Walter Stauffer , paragraph 32; Commission  v Denmark , paragraph 46; and Case C‑522/04 Commission  v Belgium  [2007] ECR I‑0000, paragraph 47).
91. In that regard it must be recalled that, in accordance with settled case-law, the prevention of tax evasion can be accepted as justification only if the legislation is aimed at wholly artificial arrangements the objective of which is to circumvent the tax laws, which precludes any general presumption of tax evasion. Consequently, a general presumption of tax avoidance or tax evasion cannot justify a fiscal measure which compromises the objectives of the Treaty (see, to that effect, Case C‑478/98 Commission  v Belgium  [2000] ECR I‑7587, paragraph 45; Case C‑334/02 Commission  v France  [2004] ECR I‑2229, paragraph 27; and Case C‑196/04 Cadbury Schweppes and Cadbury Schweppes Overseas  [2006] ECR I‑7995, paragraph 50 and case-law cited there).
92. It is also in accordance with settled case-law of the Court that Directive 77/799 may be relied on by a Member State for the purposes of obtaining from the competent authorities of another Member State any information which is necessary to enable it to effect a correct assessment of the taxes covered by the directive (see Cadbury Schweppes and Cadbury Schweppes Overseas , paragraph 71, and Commission  v Denmark , paragraph 52). Further, it follows from the answer given to the second question referred for a preliminary ruling that the disputed tax is covered by Directive 77/799.
94. However, it is also apparent from the case-law that, although Article 8(1) of Directive 77/799 does not oblige the tax authorities of the Member States to cooperate when the competent authorities are prevented by their laws or administrative practices from conducting enquiries or from collecting or using information for those States’ own purposes, the fact that it may be impossible to request that cooperation cannot justify refusal of a tax benefit.
95. There is no reason why the tax authorities concerned should not request from the taxpayer the evidence that they consider they need to effect a correct assessment of the taxes and duties concerned and, where appropriate, refuse the exemption applied for if that evidence is not supplied (see Commission  v Denmark , paragraph 54 and case-law cited there).
96. Thus, the taxpayer should not be excluded a priori from providing relevant documentary evidence enabling the tax authorities of the Member State imposing the tax to ascertain, clearly and precisely, that he is not attempting to avoid or evade the payment of taxes (see, to that effect, Case C‑254/97 Baxter and Others  [1999] ECR I‑4809, paragraphs 19 and 20, and Case C‑39/04 Laboratoires Fournier  [2005] ECR I‑2057, paragraph 25).
98. However, that difficulty cannot justify a categorical refusal to grant a tax benefit in respect of investments made by investors from that Member State. When the holding companies incorporated under Luxembourg law apply for exemption from the disputed tax, the French tax authorities may request those companies themselves to provide the evidence which they consider they need to be fully satisfied as to the transparency of those companies’ rights of ownership and the structure of their shareholdings, irrespective of whether there is a convention on administrative assistance or a treaty containing a clause which prohibits discrimination in matters of taxation.
99. The French legislation at issue in the main proceedings in the present case does not allow companies which are excluded from the scope of a convention on administrative assistance and do not fall under a treaty containing a clause prohibiting discrimination in matters of taxation, but which invest in immovable property situated in France, to provide documentary evidence to establish the identity of their shareholders and any other information which the French tax authorities consider to be necessary. As a result, it is clear that that legislation wholly prevents those companies from demonstrating that their objective is not that of tax evasion.
100. It follows that the French Government could have adopted less restrictive measures in order to attain the objective of combating tax evasion.
101. Consequently, the disputed tax cannot be justified on the ground of combating tax evasion.