Hughes de Lasteyrie du Saillant v Ministère de l'Économie, des Finances et de l'Industrie.
Date: 2004-03-11
40. In that respect, it should be noted that Article 52 of the Treaty constitutes one of the fundamental provisions of Community law and has been directly applicable in the Member States since the end of the transitional period. Under that provision, freedom of establishment for nationals of a Member State on the territory of another Member State includes the right 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 country where such establishment is effected (Case 270/83 Commission  v France  [1986] ECR 273, paragraph 13; Case C-311/97 Royal Bank of Scotland  [1999] ECR I-2651, paragraph 22; Case C-251/98 Baars  [2000] ECR I-2787, paragraph 27).
41. In reply to the doubts expressed by certain governments as to the applicability of that provision to the dispute in the main proceedings, and in the absence of sufficient information on that point in the documents presented before the Court, it should be noted that, in proceedings under Article 234 EC, which is based on a clear separation of functions between the national courts and the Court of Justice, any assessment of the facts in the case is a matter for the national court (see, in particular, Case C-326/00 IKA  [2003] ECR I-1703, paragraph 27 and case-law cited therein), and that, in this case, the referring court appears to have concluded that Article 52 of the Treaty applies to the dispute before it.
42. Even if, like the other provisions concerning freedom of establishment, Article 52 of the Treaty is, according to its terms, aimed particularly at ensuring that foreign nationals are treated in the host Member State in the same way as nationals of that State, it also prohibits the Member State of origin from hindering the establishment in another Member State of one of its own nationals (see Baars , paragraph 28, and case-law cited therein).
43. Moreover, a restriction on freedom of establishment is prohibited by Article 52 of the Treaty even if of limited scope or minor importance (see, to that effect, Commission  v France , cited above, paragraph 21, and Case C-34/98 Commission  v France  [2000] ECR I-995, paragraph 49).
44. Moreover, the prohibition on Member States establishing restrictions on the freedom of establishment also applies to tax provisions. According to consistent case-law, even if, in the current state of Community law, direct taxation does not as such fall within the scope of the Community’s jurisdiction, Member States must nevertheless exercise their retained powers in compliance with Community law (Case C-279/93 Schumacker  [1995] ECR I-225, paragraph 21; ICI , cited above, paragraph 19; Case C-436/00 X and Y  [2002] ECR I-10829, paragraph 32).
46. A taxpayer wishing to transfer his tax residence outside French territory, in exercise of the right guaranteed to him by Article 52 of the Treaty, is subjected to disadvantageous treatment in comparison with a person who maintains his residence in France. That taxpayer becomes liable, simply by reason of such a transfer, to tax on income which has not yet been realised and which he therefore does not have, whereas, if he remained in France, increases in value would become taxable only when, and to the extent that, they were actually realised. That difference in treatment concerning the taxation of increases in value, which is capable of having considerable repercussions on the assets of a taxpayer wishing to transfer his tax residence outside France, is likely to discourage a taxpayer from carrying out such a transfer.
47. An examination of the rules for applying that measure confirms that conclusion. Although it is possible to benefit from suspension of payment, that is not automatic and it is subject to strict conditions such as those described by the Advocate General in points 36 and 37 of his Opinion, including, in particular, conditions as to the setting up of guarantees. Those guarantees in themselves constitute a restrictive effect, in that they deprive the taxpayer of the enjoyment of the assets given as a guarantee.
49. It should be noted, secondly, that a measure which is liable to hinder the freedom of establishment laid down by Article 52 of the Treaty can be allowed only if it pursues a legitimate objective compatible with the Treaty and is justified by imperative reasons in the public interest. It is further necessary, in such a case, that its application must be appropriate to ensuring the attainment of the objective thus pursued and must not go beyond what is necessary to attain it (see Futura Participations and Singer , paragraph 26, and the case-law cited therein, and X and Y , paragraph 49).
50. As regards justification based on the aim of preventing tax avoidance, referred to by the national court in its question, it should be noted that Article 167a of the CGI is not specifically designed to exclude from a tax advantage purely artificial arrangements aimed at circumventing French tax law, but is aimed generally at any situation in which a taxpayer with substantial holdings in a company subject to corporation tax transfers his tax residence outside France for any reason whatever (see, to that effect, ICI , paragraph 26, and X and Y , paragraph 61).
51. However, the transfer of a physical person’s tax residence outside the territory of a Member State does not, in itself, imply tax avoidance. Tax avoidance or evasion cannot be inferred generally from the fact that the tax residence of a physical person has been transferred to another Member State and cannot justify a fiscal measure which compromises the exercise of a fundamental freedom guaranteed by the Treaty (see, to that effect, Case C-478/98 Commission  v Belgium  [2000] ECR I-7587, paragraph 45; X and Y , cited above, paragraph 62).
60. In that respect, it is sufficient to recall that, in accordance with settled case-law, diminution of tax receipts cannot be regarded as a matter of overriding general interest which may be relied upon in order to justify a measure which is, in principle, contrary to a fundamental freedom ( ICI , cited above, paragraph 28; Joined Cases C-397/98 and C-410/98 Metallgesellschaft and Others  [2001] ECR I-1727, paragraph 59). Therefore, a simple loss of receipts suffered by a Member State because a taxpayer has moved his tax residence to another Member State, where the tax system is different and may be more advantageous for him, cannot in itself justify a restriction on the right of establishment.
62. The Court has, it is true, acknowledged that, in order to maintain the link between the deductibility of premiums and the taxation of sums due from insurers in the implementation of insurance contracts, tax deductibility of the premiums is subject to the condition that they be paid in that State ( Bachmann , cited above, paragraphs 21 to 23; Case C-300/90 Commission  v Belgium  [1992] ECR I-305, paragraphs 14 to 20).
67. In those circumstances, the premiss on which the Netherlands Government’s argument concerning fiscal coherence is based does not hold true having regard to the aim pursued by the tax system laid down by Article 167a of the CGI. Therefore, justification for such a system based on an objective of fiscal coherence, which, moreover, the French Government has not argued, cannot be accepted.