Heinrich Bauer Verlag BeteiligungsGmbH v Finanzamt für Großunternehmen in Hamburg.
Date: 2008-10-02
15. It must be noted that it is not for the Court of Justice to rule on the interpretation of provisions of national law, but that it is the task of the Court to take account, under the division of jurisdiction between the Community courts and the national courts, of the factual and legislative context, as described in the order for reference, in which the question put to it is set (see Case C‑475/99 Ambulanz Glöckner  [2001] ECR I‑8089, paragraph 10, and Case C‑153/02 Neri  [2003] ECR I‑13555, paragraphs 34 and 35).
17. First, although direct taxation falls within their competence, Member States must nonetheless exercise that competence consistently with Community law and avoid any discrimination on grounds of nationality (see, inter alia, Case C‑251/98 Baars  [2000] ECR I‑2787, paragraph 17, and Case C‑105/07 Lammers & Van Cleef [2008] ECR I‑0000, paragraph 12).
25. According to settled case-law, the freedom of establishment which Article 52 of the Treaty grants to nationals of the Member States and which entails the right for them to take up and pursue activities as self-employed persons under the same conditions laid down for its own nationals by the law of the Member State where such establishment is effected, includes, pursuant to Article 58 of the 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 corporate seat in the above sense 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, Case C‑141/99 AMID  [2000] ECR I‑11619, paragraph 20).
26. It must also be pointed out that even though, according to their wording, the provisions concerning freedom of establishment are mainly aimed at ensuring that foreign nationals and companies are treated in the host Member State in the same way as nationals of that State, they also prohibit the State of origin from hindering the establishment in another Member State of one of its nationals or of a company incorporated under its legislation which comes within the definition contained in Article 58 of the Treaty (see AMID , paragraph 21).
27. In accordance with settled case-law, national provisions which apply to holdings by nationals or companies of the Member State concerned in the capital of a company established in another Member State, giving them definite influence on the company’s decisions and allowing them to determine its activities, come within the substantive scope of the provisions of the Treaty on freedom of establishment (see Case C‑347/04 Rewe Zentralfinanz  [2007] ECR I‑2647, paragraphs 22 and 70, and Case C‑231/05 Oy AA  [2007] ECR I‑6373, paragraph 20).
29. It may be helpful to point out that that is the case where a resident company owns 100% of the shares in a company established in another Member State, or, again, where the shares of a company established in another Member State are held, directly or indirectly, by members of one family, residing in another Member State, who pursue the same interests, take decisions by agreement, through the same representative at general meetings of that company, and decide on its activities (see Rewe Zentralfinanz , paragraph 23, and Case C‑298/05 Columbus Container Services  [2007] ECR I‑10451, paragraphs 13, 14 and 31).
33. In the light of that difference, and the fact that HBV is entirely owned by that parent company, HBV might be discouraged from acquiring a holding in a partnership established in another Member State (see, to that effect, Rewe Zentralfinanz , paragraph 31).
34. A restriction on freedom of establishment can be justified only if that provision pursues a legitimate aim compatible with the Treaty and is justified by overriding reasons of public interest. Even if that were so, it would still have to be of such a nature as to ensure achievement of the aim in question and not go beyond what was necessary for that purpose (see, inter alia, Case C‑436/00 X and Y  [2002] ECR I‑10829, paragraph 49).
37. As regards the justification put forward by the Finanzamt, the need to maintain the cohesion of a tax system can indeed justify a restriction on the exercise of the fundamental freedoms guaranteed by the Treaty. However, for an argument based on such reasoning to succeed, a direct link must be established between the tax advantage concerned and the offsetting of that advantage by a particular tax levy (see, inter alia, Rewe Zentralfinanz , paragraph 62, and Case C‑443/06 Hollmann  [2007] ECR I‑8491, paragraph 56).
40. As regards the argument put forward by the German Government, the Court has held, on several occasions, that the effectiveness of fiscal supervision constitutes an overriding reason of public interest capable of justifying a restriction on the exercise of fundamental freedoms guaranteed by the Treaty (see Case C‑386/04 Centro di Musicologia Walter Stauffer  [2006] ECR I‑8203, paragraph 47).
41. Even if 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 and indirect taxation (OJ 1977 L 336, p. 15) were not applicable in the main proceedings, that could not justify the method of calculating the value of holdings in companies or firms established in other Member States being designed in such a way as to be less favourable than the method of calculating the value of holdings in companies or firms established in the Member State concerned. The tax authorities could request the taxpayers concerned to provide themselves the evidence which the authorities consider necessary to carry out a calculation of the value of the holdings of those taxpayers in companies or firms established in other Member States (see, to that effect, Case C‑464/05 Geurts and Votgen  [2007] ECR I‑9325, paragraph 28).
43. Having regard to the documents before the court, it should, so far as relevant, be noted that, in any event, Article 67(1) of the EEC Treaty ( subsequently Article 67(1) of the EC Treaty, repealed by the Treaty of Amsterdam) did not have the effect of abolishing restrictions on movements of capital by the end of the transitional period, that being effected by Council Directive 88/361/EEC of 24 June 1988 for the implementation of Article 67 of the Treaty (OJ 1988 L 178, p. 5), adopted pursuant to Articles 69 and 70(1) of the EEC Treaty (subsequently Articles 69 and 70 of the EC Treaty, repealed by the Treaty of Amsterdam) (see Case C‑484/93 Svensson and Gustavsson  [1995] ECR I-3955, paragraphs 5 and 6). However, in accordance with Article 6(1) of Directive 88/361, that directive had to be transposed into national law by no later than 1 July 1990, namely after the period concerned in the main proceedings.
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