Margaretha Bouanich v Directeur des services fiscaux de la Drôme.
Date: 2014-03-13
26. In this connection, it is to be noted that the tax treatment of dividends may fall within Article 49 TFEU on freedom of establishment and Article 63 TFEU on the free movement of capital (see Joined Cases C‑436/08 and C‑437/08 Haribo Lakritzen Hans Riegel and Österreichische Salinen [2011] ECR I‑305, paragraph 33; Case C‑35/11 Test Claimants in the FII Group Litigation  [2012] ECR, paragraph 89; and Case C‑168/11 Beker [2013] ECR, paragraph 23).
27. As regards the question whether national legislation falls within the scope of one or other of the freedoms of movement, it is clear from well-established case-law that the purpose of the legislation concerned must be taken into consideration ( Test Claimants in the FII Group Litigation , paragraph 90 and the case-law cited, and Beker , paragraph 24).
28. In that respect, it has previously been held that national legislation intended to apply only to those shareholdings which enable the holder to exert a definite influence on a company’s decisions and to determine its activities falls within the scope of Article 49 TFEU on freedom of establishment (see Case C‑387/11 Commission v Belgium  [2012] ECR, paragraph 34; Test Claimants in the FII Group Litigation , paragraph 91 and the case-law cited; and Beker , paragraph 25). On the other hand, national provisions which apply to shareholdings acquired solely with the intention of making a financial investment without any intention to influence the management and control of the undertaking must be examined exclusively in the light of the free movement of capital (see Commission v Belgium , paragraph 34; Test Claimants in the FII Group Litigation , paragraph 92 and the case-law cited; and Beker , paragraph 26).
30. Consequently, in so far as those rules relate to dividends which originate in a Member State, it cannot therefore be determined from their purpose whether they fall predominantly within the scope of Article 49 TFEU or Article 63 TFEU. In such circumstances, the Court takes account of the facts of the case in point in order to determine whether the situation to which the dispute in the main proceedings relates falls within the scope of one or other of those provisions ( Test Claimants in the FII Group Litigation , paragraphs 93 and 94 and the case-law cited, and Beker , paragraphs 27 and 28).
39. Consequently, the case in the main proceedings differs from the Kerckhaert and Morres case. The national legislation at issue in Kerckhaert and Morres  did not make any distinction between dividends from shares in companies established in the territory of the State concerned and dividends from shares in companies established in another Member State which had been subject to a tax levied at source in that other Member State, since that legislation subjected those dividends, within the context of income tax, to the same uniform rate of taxation (see, to that effect, Kerckhaert and Morres , paragraph 17). In such circumstances, the Court held that the adverse consequences which might arise from the application of an income tax system such as that at issue in that case would result from the exercise in parallel by two Member States of their tax jurisdiction ( Kerckhaert and Morres , paragraph 20).
43. According to settled case-law, the measures prohibited by Article 63(1) TFEU, as restrictions on the movement of capital, include those which are such as 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 (Joined Cases C‑338/11 to C‑347/11 Santander Asset Management SGIIC and Others  [2012] ECR, paragraph 15 and the case-law cited).
45. In accordance with settled case-law, discrimination in fiscal matters can arise only through the application of different rules to comparable situations or the application of the same rule to different situations (see Case C‑279/93 Schumacker  [1995] ECR I‑225, paragraph 30; Case C‑383/05 Talotta [2007] ECR I‑2555, paragraph 18; and Case C‑182/06 Lakebrink and Peters-Lakebrink [2007] ECR I‑6705, paragraph 27). Accordingly, a difference in treatment between two categories of taxpayer may be categorised as discrimination within the meaning of the Treaty provided that the situations of those categories of taxpayer are comparable in the light of the taxation rules concerned (Case C‑253/09 Commission v Hungary  [2011] ECR I‑12391, paragraph 51).
57. Article 49 TFEU requires the abolition of restrictions on the freedom of establishment. Therefore, even though, according to their wording, the Treaty provisions on freedom of establishment are aimed at ensuring that foreign nationals are treated in the host Member State in the same way as nationals of that State, they also prohibit the Member State of origin from hindering the establishment in another Member State of one of its nationals or of a company incorporated under its legislation (see Case C‑446/03 Marks & Spencer [2005] ECR I‑10837, paragraph 31, and Case C‑371/10 National Grid Indus [2011] ECR I‑12273, paragraph 35).
58. It is also settled case-law that all measures which prohibit, impede or render less attractive the exercise of the freedom of establishment must be regarded as restrictions on that freedom (see Case C‑380/11 DI. VI. Finanziaria di Diego della Valle & C.  [2012] ECR, paragraph 33).
62. However, the derogation under Article 65(1)(a) TFEU, which is to be strictly interpreted, is itself restricted by Article 65(3) TFEU, which provides 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 63 [TFEU]’ (see Case C‑319/02 Manninen  [2004] ECR I‑7477, paragraph 28, and Case C‑194/06 Orange European Smallcap Fund  [2008] ECR I‑3747, paragraph 58).
63. Therefore, the unequal treatment permitted under Article 65(1)(a) TFEU must be distinguished from the discrimination prohibited by Article 65(3) TFEU. According to the Court’s case-law, for a national tax provision which distinguishes between taxpayers depending on the place where their capital is invested to be capable of being regarded as compatible with the Treaty provisions on the free movement of capital, the difference in treatment applies to situations which are not objectively comparable or is justified by overriding reasons in the public interest (see, to that effect, Case C‑35/98 Verkooijen  [2000] ECR I‑4071, paragraph 43; Manninen , paragraph 29; and Orange European Smallcap Fund , paragraph 59).
65. In those circumstances, a restriction on the free movement of capital or the freedom of establishment such as follows from the legislation at issue in the main proceedings is permissible only if it is justified by an overriding reason in the public interest. It is further necessary, in such a case, that the restriction is appropriate for ensuring the attainment of the objective in question and does not go beyond what is necessary to attain it (see National Grid Indus , paragraph 42; Case C‑250/08 Commission v Belgium  [2011] ECR I‑12341, paragraph 51; and, to that effect, Test Claimants in the FII Group Litigation , paragraphs 54 and 55).
69. In that respect, it should be noted that, admittedly, the Court has previously accepted that the need to preserve the coherence of a tax system may justify legislation restricting fundamental freedoms (see Test Claimants in the FII Group Litigation , paragraph 57 and the case-law cited). However, for an argument based on such justification to succeed, a direct link has to be established between the tax advantage concerned and the offsetting of that advantage by a particular tax levy (see Manninen , paragraph 42, and Santander Asset Management SGIIC and Others , paragraph 51 and the case-law cited), the direct nature of that link falling to be examined in the light of the objective pursued by the rules in question (see, to that effect, Case C‑418/07 Papillon  [2008] ECR I‑8947, paragraph 44; Case C‑303/07 Aberdeen Property Fininvest Alpha [2009] ECR I‑5145, paragraph 72; and Test Claimants in the FII Group Litigation , paragraph 58).
81. A justification connected with the need to safeguard the balanced allocation of powers of taxation between the Member States may be accepted, in particular, where the tax system in question is designed to prevent conduct capable of jeopardising the right of a Member State to exercise its powers of taxation in relation to activities carried on in its territory (see Case C‑347/04 Rewe Zentralfinanz  [2007] ECR I‑2647, paragraph 42; Case C‑231/05 Oy AA  [2007] ECR I‑6373, paragraph 54; Aberdeen Property Fininvest Alpha , paragraph 66; and Case C‑284/09 Commission v Germany [2011] ECR I‑9879, paragraph 77).
84. It must be recalled, in that respect, that, in accordance with settled case-law, although the Member States are free to determine the connecting factors for the allocation of fiscal jurisdiction in bilateral conventions for the avoidance of double taxation, that allocation of fiscal jurisdiction does not allow them to apply measures contrary to the freedoms of movement guaranteed by the Treaty. As far as concerns the exercise of the power of taxation so allocated by bilateral conventions to prevent double taxation, the Member States must comply with EU rules (see, to that effect, Case C‑385/00 de Groot  [2002] ECR I‑11819, paragraphs 93 and 94; Case C‑265/04 Bouanich [2006] ECR I‑923, paragraphs 49 and 50; and Case C‑303/12 Imfeld and Garcet  [2013] ECR, paragraphs 41 and 42).