Fidelity Funds and Others v Skatteministeriet.
Date: 2018-06-21
22


In that regard, it should be noted that, under the second paragraph of Article 252 TFEU, it is the duty of the Advocate General, acting with complete impartiality and independence, to make, in open court, reasoned submissions on cases which, in accordance with the Statute of the Court of Justice, require his involvement. The Court is not bound either by the Advocate General’s Opinion or by the reasoning on which it is based (judgment of 22 June 2017, Federatie Nederlandse Vakvereniging and Others, C‑126/16, EU:C:2017:489, paragraph 31 and the case-law cited).
23


It must also be noted in this regard that the Statute of the Court of Justice of the European Union and the Rules of Procedure of the Court make no provision for interested parties to submit observations in response to the Advocate General’s Opinion (judgment of 25 October 2017, Polbud — Wykonawstwo, C‑106/16, EU:C:2017:804, paragraph 23 and the case-law cited). As a consequence, the fact that a party disagrees with the Advocate General’s Opinion, irrespective of the questions examined in the Opinion, cannot in itself constitute grounds justifying the reopening of the oral procedure (judgments of 25 October 2017, Polbud — Wykonawstwo, C‑106/16, EU:C:2017:804, paragraph 24, and of 29 November 2017, King, C‑214/16, EU:C:2017:914, paragraph 27 and the case-law cited).
32


As the question referred for a preliminary ruling concerns both Article 56 TFEU and Article 63 TFEU, it is necessary to establish, as a preliminary point, whether, and if so, to what extent, national legislation such as that at issue in the main proceedings is liable to affect the exercise of the freedom to provide services and the free movement of capital.
33


In that regard, it is clear from settled case-law that the purpose of the legislation concerned must be taken into consideration (judgments of 13 November 2012, Test Claimants in the FII Group Litigation, C‑35/11, EU:C:2012:707, paragraph 90 and the case-law cited, and of 5 February 2014, Hervis Sport- és Divatkereskedelmi, C‑385/12, EU:C:2014:47, paragraph 21 and the case-law cited).
37


Furthermore, even if the legislation at issue in the main proceedings has the effect of prohibiting, impeding or rendering less attractive the activities of a UCITS established in a Member State other than the Kingdom of Denmark where it lawfully provides similar services, such effects are the unavoidable consequence of the tax treatment of the dividends paid to that UCITS which is not resident in Denmark and do not justify an independent examination in the light of the freedom to provide services (see, to that effect, judgment of 17 September 2009, Glaxo Wellcome, C‑182/08, EU:C:2009:559, paragraph 51 and the case-law cited). Indeed, that freedom is secondary here in relation to the free movement of capital and may be considered together with it (judgment of 26 May 2016, NN (L) International, C‑48/15, EU:C:2016:356, paragraph 41).
40


It follows from settled case-law that the measures prohibited by Article 63(1) TFEU, as restrictions on the movement of capital, include those that 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 (judgment of 10 May 2012, Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 15 and the case-law cited).
44


Such disadvantageous treatment may discourage, on the one hand, non-resident UCITS from investing in Danish companies and, on the other hand, investors resident in Denmark from acquiring shares in non-resident UCITS (judgment of 10 May 2012, Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 17).
47


In so far as that provision is a derogation from the fundamental principle of the free movement of capital, it must be interpreted strictly. Accordingly, it cannot 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 FEU Treaty. Indeed, the derogation in Article 65(1)(a) TFEU is itself limited 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]’ (judgment of 10 April 2014, Emerging Markets Series of DFA Investment Trust Company, C‑190/12, EU:C:2014:249, paragraphs 55 and 56 and the case-law cited).
48


A distinction must, therefore, be made between the differences in treatment authorised by Article 65(1)(a) TFEU and discrimination prohibited by Article 65(3) TFEU. According to the Court’s case-law, for national tax legislation such as that at issue in the main proceedings to be capable of being regarded as compatible with the provisions of the Treaty concerning the free movement of capital, the difference in treatment must concern situations that are not objectively comparable or must be justified by an overriding reason in the public interest (judgment of 10 May 2012, Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 23 and the case-law cited).
50


In that regard, it is clear from the Court’s case-law that the comparability of a cross-border situation with an internal one must be examined having regard to the aim pursued by the national provisions at issue as well as their purpose and content (judgment of 2 June 2016, Pensioenfonds Metaal en Techniek, C‑252/14, EU:C:2016:402, paragraph 48 and the case-law cited).
51


Moreover, only the relevant distinguishing criteria established by the legislation in question must be taken into account in determining whether the difference in treatment resulting from that legislation reflects an objectively different situation (judgments of 10 May 2012 in Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 28, and of 2 June 2016, Pensioenfonds Metaal en Techniek, C‑252/14, EU:C:2016:402, paragraph 49).
53


As concerns the first aim invoked by the Danish Government, it is clear from the Court's case-law that, in relation to measures laid down by a Member State in order to prevent or mitigate the imposition of a series of charges to tax on, or the economic double taxation of, income distributed by a resident company, resident companies receiving income are not necessarily in a situation which is comparable to that of companies receiving income which are resident in another Member State (judgment of 25 October 2012, Commission v Belgium, C‑387/11, EU:C:2012:670, paragraph 48 and the case-law cited).
54


However, as soon as a Member State, either unilaterally or by way of a convention, subjects not only resident companies but also non-resident companies to tax on the income which they receive from a resident company, the situation of those non-resident companies becomes comparable to that of resident companies (see, to that effect, judgment of 25 October 2012, Commission v Belgium, C‑387/11, EU:C:2012:670, paragraph 49 and the case-law cited).
55


It is solely because of the exercise by that State of its power of taxation that, irrespective of any taxation in another Member State, a risk of a series of charges to tax or economic double taxation may arise. In such a case, in order for non-resident companies receiving dividends not to be subject to a restriction on the free movement of capital prohibited in principle by Article 63 TFEU, the State in which the company making the distribution is resident must ensure that, under the procedures laid down by its national law in order to prevent or mitigate a series of charges to tax or economic double taxation, non-resident companies are subject to the same treatment as resident companies (see, to that effect, judgment of 25 October 2012, Commission v Belgium, C‑387/11, EU:C:2012:670, paragraph 50 and the case-law cited).
56


As the Kingdom of Denmark chose to exercise its powers of taxation on the income received by non-resident UCITS, the latter are consequently in a situation comparable to that of UCITS resident in Denmark as regards the risk of economic double taxation of dividends paid by companies resident in Denmark (judgment of 20 October 2011, Commission v Germany, C‑284/09, EU:C:2011:670, paragraph 58, and of 10 May 2012, Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 42).
64


Such a restriction is permissible only if it is justified by overriding reasons in the public interest, if it is appropriate for ensuring the attainment of the objective that it pursues and does not go beyond what is necessary in order to attain it (judgment of 24 November 2016, SECIL, C‑464/14, EU:C:2016:896, paragraph 56).
69


In this connection, it is true that the preservation of the allocation of the power to impose taxes between Member States may constitute an overriding reason in the public interest justifying a restriction on the exercise of freedom of movement within the European Union (judgment of 12 December 2013, Imfeld and Garcet, C‑303/12, EU:C:2013:822, paragraph 68 and the case-law cited).
70


Such justification may be accepted, in particular, where the 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 out in its territory (judgment of 10 May 2012, Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 47 and the case-law cited).
71


However, the Court has already held that, where a Member State has chosen, as in the situation at issue in the main proceedings, not to tax resident UCITS in receipt of nationally-sourced dividends, it cannot rely on the argument that there is a need to ensure a balanced allocation between the Member States of the power to tax in order to justify the taxation of non-resident UCITS in receipt of such income (judgment of 10 May 2012, Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 48 and the case-law cited).
79


In that regard, it must be recalled that the Court has previously held that the need to safeguard the coherence of a tax system may justify rules that are liable to restrict fundamental freedoms (judgment of 10 May 2012, Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 50 and the case-law cited).
80


However, for an argument based on such a justification to succeed, according to settled case-law, a direct link must be established between the tax advantage concerned and the compensating of that advantage by a particular tax levy, with the direct nature of that link falling to be examined in the light of the objective pursued by the rules in question (judgment of 10 May 2012, Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 51 and the case-law cited).