Margarete Block v Finanzamt Kaufbeuren.
Date: 2009-02-12
18. According to settled case-law, Article 56(1) EC lays down a general prohibition on restrictions on movements of capital between Member States (Joined Cases C‑463/04 and C‑464/04 Federconsumatori and Others  [2007] ECR I‑10419, paragraph 19 and case-law cited).
19. In the absence of a definition in the Treaty of ‘movement of capital’ within the meaning of Article 56(1) EC, the Court has previously recognised the nomenclature which constitutes Annex I to Directive 88/361 as having indicative value, even if the latter was adopted on the basis of Articles 69 and 70(1) of the EEC Treaty (after amendment, Articles 69 and 70(1) of the EC Treaty, repealed by the Treaty of Amsterdam), it being understood that, according to the third paragraph of the introduction to that annex, the nomenclature it contains is not exhaustive as regards the term ‘movement of capital’ (see, in particular, Case C‑513/03 van Hilten-van der Heijden  [2006] ECR I‑1957, paragraph 39, and Case C‑256/06 Jäger  [2008] ECR I‑123, paragraph 24).
20. In that regard, the Court – noting, in particular, that inheritances consisting in the transfer to one or more persons of assets left by a deceased person fall under heading XI of Annex I to Directive 88/361, entitled ‘Personal capital movements’ – has held that an inheritance, whether of money, immovable or movable property, is a movement of capital for the purposes of Article 56 EC, except in cases where its constituent elements are confined within a single Member State (see, in particular, Case C‑364/01 Barbier  [2003] ECR I‑15013, paragraph 58; Case C‑43/07 Arens-Sikken  [2008] ECR I‑0000, paragraph 30; Case C‑11/07 Eckelkamp  [2008] ECR I‑0000, paragraph 39; and Case C‑318/07 Persche  [2009] ECR I‑0000, paragraphs 30 and 31).
24. As regards inheritances, it is apparent from the case-law of the Court that the measures prohibited by Article 56(1) EC as being restrictions on the movement of capital include those the effect of which is to reduce the value of the inheritance of a resident of a State other than the Member State in which the assets concerned are situated and which taxes the inheritance of those assets ( van Hilten-van der Heijden , paragraph 44; Jäger , paragraph 31; Arens-Sikken , paragraph 37; and Eckelkamp , paragraph 44).
28. However, as all the Governments that have submitted written observations to the Court, as well as the Commission of the European Communities, correctly submit, that fiscal disadvantage is the result of the exercise in parallel by the two Member States concerned of their fiscal sovereignty, which is demonstrated by the fact that one State, the Federal Republic of Germany, has decided to make capital claims subject to German inheritance tax where the creditor is resident in Germany, while the other, the Kingdom of Spain, has decided to make such claims subject to Spanish inheritance tax where the debtor is established in Spain (see, to that effect, Case C‑513/04 Kerckhaert and Morres  [2006] ECR I‑10967, paragraph 20, and Case C‑298/05 Columbus Container Services  [2007] ECR I‑10451, paragraph 43).
29. In this respect, double taxation conventions such as those envisaged in Article 293 EC are designed to eliminate or mitigate the negative effects on the functioning of the internal market resulting from the coexistence of national tax systems referred to in the preceding paragraph ( Kerckhaert and Morres , paragraph 21, and Columbus Container Services , paragraph 43).
30. Community law, in the current stage of its development and in a situation such as that in the main proceedings, does not lay down any general criteria for the attribution of areas of competence between the Member States in relation to the elimination of double taxation within the European Community. Consequently, apart from Council Directive 90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States (OJ 1990 L 225, p. 6), the Convention of 23 July 1990 on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (OJ 1990 L 225, p. 10) and Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments (OJ 2003 L 157, p. 38), no uniform or harmonisation measure designed to eliminate double taxation has as yet been adopted at Community law level (see Kerckhaert and Morres , paragraph 22, and Columbus Container Services , paragraph 45).
31. It follows from this that, in the current stage of the development of Community law, the Member States enjoy a certain autonomy in this area provided they comply with Community law, and are not obliged therefore to adapt their own tax systems to the different systems of tax of the other Member States in order, inter alia, to eliminate the double taxation arising from the exercise in parallel by those Member States of their fiscal sovereignty and, in consequence thereof, to allow the inheritance tax paid in a Member State other than that in which the heir is resident to be deducted in a case such as that of the main proceedings (see, to that effect, Columbus Container Services , paragraph 51).
35. Furthermore, according to the settled case-law of the Court, the Treaty offers no guarantee to a citizen of the Union that transferring his residence to a Member State other than that in which he previously resided will be neutral as regards taxation. Given the disparities in the tax legislation of the Member States, such a transfer may be to the citizen’s advantage or not, according to circumstances (see, to that effect, Case C‑365/02 Lindfors  [2004] ECR I‑7183, paragraph 34, and Case C‑403/03 Schempp  [2005] ECR I‑6421, paragraph 45).