X v Ministerraad.
Date: 2017-05-17
35


With a view to answering the question as asked, it should be recalled at the outset that it is the company’s registered office that serves as the connecting factor with the legal system of a particular State, like nationality in the case of natural persons (see, inter alia, judgments of 28 January 1986, Commission v France, 270/83, EU:C:1986:37, paragraph 18, and of 14 December 2000, AMID, C‑141/99, EU:C:2000:696, paragraph 20).
39


Freedom of establishment, which Article 49 TFEU grants to European Union nationals, includes the right for them 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 Member State where such establishment is effected. It entails, in accordance with Article 54 TFEU, for 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 European Union, the right to exercise their activity in the Member State concerned through a subsidiary, a branch or an agency (judgment of 17 July 2014, Nordea Bank Danmark, C‑48/13, EU:C:2014:2087, paragraph 17 and the case-law cited).
40


As regards treatment in the host Member State, the case-law of the Court holds that, since the second sentence of the first paragraph of Article 49 TFEU expressly leaves economic operators free to choose the appropriate legal form in which to pursue their activities in another Member State, that freedom of choice must not be limited by discriminatory tax provisions (order of 4 June 2009, BC Bank and Beleggen, Risicokapitaal, Beheer, C‑439/07 and C‑499/07, EU:C:2009:339, paragraphs 77 and the case-law cited).
41


As regards tax provisions, it follows from the case-law of the Court that it is for each Member State to organise, in compliance with EU law, its system for taxing profits, in so far as those profits come within the tax jurisdiction of the Member State concerned. It follows that the host Member State is free to determine the chargeable event of the tax, the taxable amount and the tax rates which apply to the various forms of establishments of the companies operating in that Member State, on condition that non-resident companies are not treated in a manner that is discriminatory in comparison with comparable national establishments (see, to that effect, judgments of 12 December 2006, Test Claimants in the FII Group Litigation, C‑446/04, EU:C:2006:774, paragraph 47, and of 26 June 2008, Burda, C‑284/06, EU:C:2008:365, paragraph 86 and the case-law cited).
42


Discrimination can arise only through the application of different rules to comparable situations or the application of the same rule to different situations (judgments of 14 February 1995, Schumacker, C‑279/93, EU:C:1995:31, paragraph 30, and of 1 December 2011, Commission v Hungary, C‑253/09, EU:C:2011:795, paragraph 50 and the case-law cited).
47


In the present case, it is for the referring court, the only court with jurisdiction to interpret national law, taking into account all the elements of the tax legislation at issue in the main proceedings and the national tax system as a whole, to ascertain whether the method of calculating the taxable amount results, in all situations, in the tax treatment reserved for a non-resident company conducting its activity in Belgium through a permanent establishment not being less advantageous than that to which a resident company is subject (see, to that effect, judgment of 17 September 2015, Miljoen and Others, C‑10/14, C‑14/14 and C‑17/14, EU:C:2015:608, paragraph 48).
50


Such an obstacle is permissible only if it relates to situations which are not objectively comparable or if it is justified by overriding reasons in the public interest (judgment of 17 July 2014, Nordea Bank Danmark, C‑48/13, EU:C:2014:2087, paragraph 23 and the case-law cited).
51


It should be noted that the comparability or otherwise of a cross-border situation with an internal situation must be examined having regard to the aim pursued by the national tax legislation at issue (see, to that effect, judgments of 8 November 2012, Commission v Finland, C‑342/10, EU:C:2012:688, paragraph 36, and of 2 June 2016, Pensioenfonds Metaal en Techniek, C‑252/14, EU:C:2016:402, paragraph 48).
52


With regard to tax legislation of the host Member State aimed at preventing the profits generated in that State, as a result of the use of certain tax advantages provided for by the national tax system, from being distributed without having been taxed in the hands of the taxpayer, the situation of a non-resident taxpayer conducting an economic activity in that Member State through a permanent establishment is comparable to that of a resident taxpayer. In both cases, that tax legislation seeks to permit that State to exercise its power of taxation in respect of profits coming within its tax jurisdiction (see, to that effect, judgments of 14 November 2006, Kerckhaert and Morres, C‑513/04, EU:C:2006:713, paragraph 19, and of 3 September 2014, Commission v Spain, C‑127/12, not published, EU:C:2014:2130, paragraphs 77 and 78).
56


In that regard, it is sufficient to state that, while those two objectives constitute overriding reasons in the public interest capable of justifying a restriction on the exercise of freedom of movement guaranteed by the Treaty (see judgment of 5 July 2012, SIAT, C‑318/10, EU:C:2012:415, paragraphs 36 and 37 and the case-law cited), the legislation at issue in the main proceedings is not suitable for ensuring their attainment, so that those objectives cannot, in a case such as that at issue in the main proceedings, justify any obstacle to freedom of establishment.
60


The fact that national tax legislation places non-resident companies at a disadvantage cannot be compensated for by the fact that, in other situations, the same legislation may result in advantageous treatment for such companies (see, to that effect, judgment of 2 June 2016, Pensioenfonds Metaal en Techniek, C‑252/14, EU:C:2016:402, paragraphs 38 and 39).
63


The settled case-law of the Court holds that, in order for a tax to be classified as a withholding tax within the meaning of Article 5 of the Parent-Subsidiary Directive, three cumulative criteria must be satisfied. Thus, first, the tax must be levied in the State in which the dividends are distributed and its chargeable event must be the payment of dividends or of any other income from shares; second, the taxable amount is the income from those shares; and third, the taxable person is the holder of the shares (see, by analogy, judgment of 24 June 2010, P. Ferrero e C. and General Beverage Europe, C‑338/08 and C‑339/08, EU:C:2010:364, paragraph 26 and the case-law cited).
66


That finding is not called into question by the argument put forward by X and the Commission that it would be appropriate in the present case to favour an approach based on economic assessments. In that regard, it is sufficient to recall that in the judgment of 26 June 2008, Burda (C‑284/06, EU:C:2008:365, paragraphs 58 to 62), the Court rejected such an approach.
71


To that end, Article 4(1) of the Parent-Subsidiary Directive leaves it to the Member States to choose between two systems, namely between an exemption system and an imputation system (see, to that effect, judgment of 12 December 2006, Test Claimants in the FII Group Litigation, C‑446/04, EU:C:2006:774, paragraph 44). In accordance with recitals 7 and 9 of that directive, that provision stipulates that where a parent company or its permanent establishment, by virtue of the association of the parent company with its subsidiary, receives distributed profits, the Member State of the parent company and the Member State of its permanent establishment are, except when the subsidiary is liquidated, either to refrain from taxing such profits or to tax them while authorising the parent company and the permanent establishment to deduct from the amount of tax due that fraction of the tax relating to those profits and paid by the subsidiary and any lower-tier subsidiary.