Proceedings brought by F.E. Familienprivatstiftung Eisenstadt.
Date: 2015-09-17
35. According to the settled case-law of the Court, Article 56(1) EC lays down a general prohibition on restrictions on the movement of capital between Member States (judgments in Persche , C‑318/07, EU:C:2009:33, paragraph 23, and Mattner , C‑510/08, EU:C:2010:216, paragraph 18).
36. In the absence of a definition in the EC Treaty of ‘movement of capital’ for the purposes of Article 56(1) EC, the Court has recognised the nomenclature which forms Annex I to Council Directive 88/361/EEC of 24 June 1988 for the implementation of Article 67 of the Treaty [repealed by the Treaty of Amsterdam] (OJ 1988 L 178, p. 5) as having indicative value, even though that directive was adopted on the basis of Articles 69 and 70(1) of the EEC Treaty (later Articles 69 and 70(1) of the EC Treaty both of which were repealed by the Treaty of Amsterdam), it being understood that, in accordance with the introduction to that annex, the list it contains is not exhaustive. Gifts and endowments appear under heading XI, ‘Personal capital movements’, of that annex (judgments in Persche , C‑318/07, EU:C:2009:33, paragraph 24; Mattner , C‑510/08, EU:C:2010:216, paragraph 19; and Commission  v Spain , C‑127/12, EU:C:2014:2130, paragraph 52).
37. The Court has already held that the tax treatment of gifts, whether they are gifts of money, immovable property or movable property, falls under the provisions of the Treaty on the movement of capital, except where their constituent elements are confined within a single Member State (see, to that effect, judgments in Persche , C‑318/07, EU:C:2009:33, paragraph 27; Mattner , C‑510/08, EU:C:2010:216, paragraph 20; and Q , C‑133/13, EU:C:2014:2460, paragraph 18).
50. According to the settled case-law of the Court, a restriction on a fundamental freedom is prohibited by the Treaty, even if it is of limited scope or minor importance (see, to that effect, regarding the free movement of capital, judgment in Dijkman and Dijkman-Lavaleije , C‑233/09, EU:C:2010:397, paragraph 42; and, regarding the freedom of establishment, judgments in Commission  v France , C‑34/98, EU:C:2000:84, paragraph 49, and de Lasteyrie du Saillant , C‑9/02, EU:C:2004:138, paragraph 43).
51. A cash-flow disadvantage which arises from a cross-border situation can form a restriction on a fundamental freedom where such a disadvantage does not arise in a purely national situation (see, to that effect, judgments in Metallgesellschaft and Others , C‑397/98 and C‑410/98, EU:C:2001:134, paragraphs 44, 54 and 76; X and Y , C‑436/00, EU:C:2002:704, paragraphs 36 and 37; Rewe Zentralfinanz , C‑347/04, EU:C:2007:194, paragraphs 26 to 30; National Grid Indus , C‑371/10, EU:C:2011:785, paragraphs 36 and 37; DMC , C‑164/12, EU:C:2014:20, paragraphs 40 to 43; and Commission v Germany , C‑591/13, EU:C:2015:230, paragraphs 55 to 61).
56. In so far as Article 58(1)(a) EC is a derogation from the fundamental principle of the free movement of capital, it must be interpreted strictly. It cannot therefore be interpreted as meaning that all tax legislation which draws a distinction between taxpayers on the basis of their place of residence or the State in which they invest their capital is automatically compatible with the Treaty (judgments in Mattner , C‑510/08, EU:C:2010:216, paragraph 32, and Santander Asset Management SGIIC and Others , C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 21).
57. The derogation in Article 58(1)(a) EC is itself limited by Article 58(3) EC, which states that the national provisions referred to in paragraph 1 of that article ‘shall not constitute a means of arbitrary discrimination or a disguised restriction on the free movement of capital and payments as defined in Article 56’ (judgments in Mattner , C‑510/08, EU:C:2010:216, paragraph 33, and Santander Asset Management SGIIC and Others , C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 22).
58. The differences in treatment authorised by Article 58(1)(a) EC must therefore be distinguished from discrimination prohibited by Article 58(3) EC. The case-law of the Court shows that, for national tax legislation such as that at issue in the case in the main proceedings to be capable of being regarded as compatible with the provisions of the Treaty on the free movement of capital, it is necessary that the difference in treatment concern situations which are not objectively comparable or be justified by an overriding reason in the public interest. In order to be justified, moreover, the difference in treatment between those two categories of gifts must not go beyond what is necessary in order to attain the objective of the legislation in question (see, to that effect, judgments in Manninen , C‑319/02, EU:C:2004:484, paragraph 29; Mattner , C‑510/08, EU:C:2010:216, paragraph 34; and Santander Asset Management SGIIC and Others , C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 23).
Whether the situations are comparable
68. It should be recalled in that regard that preservation of a balanced allocation of powers of taxation between Member States is a legitimate objective recognised by the Court. Moreover, it is settled case-law of the Court that, in the absence of any unifying or harmonising measures adopted by the European Union, the 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 (judgments in DMC , C‑164/12, EU:C:2014:20, paragraphs 46 and 47; Commission  v Germany , C‑591/13, EU:C:2015:230, paragraph 64; and Grünewald , C‑559/13, EU:C:2015:109, paragraph 40).
70. A justification concerning the necessity to preserve a balanced allocation of powers of taxation between Member States may be sanctioned, in particular, where the tax regime at issue is designed to prevent conduct capable of jeopardising the right of a Member State to exercise its tax jurisdiction in relation to activities carried out in its territory (see, to that effect, judgments in Rewe Zentralfinanz , C‑347/04, EU:C:2007:194, paragraph 42; Oy AA , C‑231/05, EU:C:2007:439, paragraph 54; and Aberdeen Property Fininvest Alpha , C‑303/07, EU:C:2009:377, paragraph 66).
74. Furthermore, in the case giving rise to the judgment in Argenta Spaarbank (C‑350/11, EU:C:2013:447), which concerned the tax treatment of corporation tax and the taking of losses into account, the Court held, in paragraph 51 of that judgment, that the fact that under a double taxation convention the profits attributable to a permanent establishment situated in a Member State are solely taxable in that Member State and that, consequently, the other Member State to the convention cannot exercise its power to tax in relation to the profits attributable to that permanent establishment cannot systematically justify any refusal to grant an advantage to the company established in the territory of the latter Member State to which the permanent establishment belongs.
75. Such a refusal would be tantamount to justifying a difference in treatment solely on the ground that a company established in a Member State has developed a cross-border economic activity which is not liable to generate tax revenue for that Member State (see, to that effect, judgment in Argenta Spaarbank , C‑350/11, EU:C:2013:447, paragraph 52 and the case-law cited).
76. In the same way, the Court has held that any advantage resulting from the low taxation to which a subsidiary established in a Member State other than the one in which the parent company was incorporated is subject cannot by itself authorise that Member State to offset that advantage by less favourable tax treatment of the parent company. The need to prevent the reduction of tax revenue is indeed not one of the grounds listed in Article 46(1) EC or a matter of overriding general interest which would justify a restriction on a freedom introduced by the Treaty (see, to that effect, judgment in Cadbury Schweppes and Cadbury Schweppes Overseas , C‑196/04, EU:C:2006:544, paragraph 49).
81. For an argument based on such a justification to succeed, the Court requires a direct link to be established between the tax advantage concerned and the offsetting of that advantage by a particular tax, and the directness of that link to be assessed with regard to the purpose of the legislation at issue (see, to that effect, judgments in Papillon , C‑418/07, EU:C:2008:659, paragraphs 43 and 44; Commission  v Germany , C‑211/13, EU:C:2014:2148, paragraph 55; and Grünewald , C‑559/13, EU:C:2015:109, paragraph 47).
83. First, there is no such direct link when it is a question, in particular, of different taxes or the tax treatment of different taxpayers (see, to that effect, judgments in DI. VI. Finanziaria di Diego della Valle & C. , C‑380/11, EU:C:2012:552, paragraph 47, and Grünewald , C‑559/13, EU:C:2015:109, paragraph 49). That is the case here since the deduction of the amount corresponding to the gifts made by the private foundation subject to the interim tax and the taxation of the beneficiaries for those gifts necessarily concern different taxpayers.