Heirs of M. E. A. van Hilten-van der Heijden v Inspecteur van de Belastingdienst/Particulieren/Ondernemingen buitenland te Heerlen.
Date: 2006-02-23
26. It is settled case-law that, in order to provide a useful reply to the court which has referred to it a question for a preliminary ruling, the Court may be required to take into consideration rules of Community law to which the national court did not refer in its questions (see, among others, Case C-60/03 Wolff & Müller [2004] ECR I‑9553, paragraph 24, and Case C‑153/03 Weide  [2005] ECR I‑0000, paragraph 25).
36. It should be noted, at the outset, that, although direct taxation falls within their competence, Member States must none the less exercise that competence consistently with Community law (see, in particular, Case C‑80/94 Wielockx [1995] ECR I-2493, paragraph 16, and Case C‑39/04 Laboratoires Fournier  [2005] ECR I‑2057, paragraph 14).
37. Also, it must be borne in mind that Article 73b(1) of the Treaty gives effect to the free movement of capital between the Member States and between Member and non-member States. To that end, it provides, in the chapter of the Treaty entitled ‘Capital and payments’, that all restrictions on the movement of capital between Member States and between Member and non-member States are to be prohibited.
39. In that regard, it must be observed that the Treaty does not define the terms ‘movement of capital’ and ‘payments’. However, it is settled case‑law that, inasmuch as Article 73b of the Treaty substantially reproduces the content of Article 1 of Directive 88/361, and even if the latter was adopted on the basis of Articles 69 and 70(1) of the EEC Treaty (Articles 67 to 73 of the EEC Treaty were replaced by Articles 73b to 73g of the EC Treaty, now Articles 56 EC to 60 EC), the nomenclature of capital movements annexed thereto retains the same indicative value, for the purposes of defining the term ‘movement of capital’, as it did before their entry into force, subject to the qualification, contained in the introduction to the nomenclature, that the list set out therein is not exhaustive (see to that effect, among others, Case C‑222/97 Trummer and Mayer  [1999] ECR I‑1661, paragraph 21, and Joined Cases C‑515/99, C‑519/99 to C‑524/99 and C‑526/99 to C‑540/99 Reisch and Others  [2002] ECR I‑2157, paragraph 30).
40. Inheritances appear under heading XI of Annex I to Directive 88/361, entitled ‘Personal capital movements’. As the Advocate General pointed out in point 53 of his Opinion, that heading mentions, particularly, operations by which the whole or part of a person’s property is transferred during his lifetime, or after his death.
41. An inheritance consists of the transfer to one or more persons of the estate left by a deceased person or, in other words, a transfer to the deceased’s heirs of the ownership of the various assets, rights, etc., of which that estate is composed.
42. It follows that an inheritance is a movement of capital within the meaning of Article 73b of the Treaty (see to that effect, also, Case C‑364/01 Barbier  [2003] ECR I‑15013, paragraph 58), except in cases where its constituent elements are confined within a single Member State.
44. In that regard, it follows from the case‑law that the measures prohibited by Article 73b(1) of the Treaty, as being restrictions on the movement of capital, include those which are likely to discourage non-residents from making investments in a Member State or to discourage that Member State’s residents to do so in other States or, in the case of inheritances, those whose effect 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 (see to that effect Case C‑484/93 Svensson and Gustavsson [1995] ECR I‑3955, paragraph 10; Trummer and Mayer , paragraph 26; Case C‑439/97 Sandoz [1999] ECR I‑7041, paragraph 19; and Barbier , paragraph 62).
47. As regards the differences in treatment between residents who are nationals of the Member State concerned and those who are nationals of other Member States resulting from national legislation such as that in question in the main proceedings, it must be observed that such distinctions, for the purposes of allocating powers of taxation, cannot be regarded as constituting discrimination prohibited by Article 73b of the Treaty. They flow, in the absence of any unifying or harmonising measures adopted in the Community context, from the Member States’ power to define, by treaty or unilaterally, the criteria for allocating their powers of taxation (see to that effect, as regards Article 48 of the EC Treaty (now, after amendment, Article 39 EC), Case C‑336/96 Gilly [1998] ECR I‑2793, paragraph 30, and, as regards Article 52 of the EC Treaty (now, after amendment, Article 43 EC) and Article 58 of the EC Treaty (now Article 48 EC), Case C‑307/97 Saint‑Gobain ZN  [1999] ECR I‑6161, paragraph 57).
48. Moreover, the Court has already had occasion to decide that, for the purposes of the allocation of powers of taxation, it is not unreasonable for the Member States to find inspiration in international practice and, particularly, the model conventions drawn up by the Organisation for Economic Cooperation and Development (OECD) (see Gilly , paragraph 31). As the Netherlands Government observed, the legislation in question in the main proceedings complies with the commentaries in the Model Double Taxation Convention concerning Inheritances and Gifts (Report of the Fiscal Affairs Committee of the OECD, 1982). It is clear from the commentaries on Articles 4, 7, 9A and 9B of that model that that type of legislation is justified by the concern to prevent a form of tax evasion whereby a national of a State, in contemplation of his death, transfers his residence to another State where the tax is lower. The commentaries state that double taxation is avoided by a system of tax credits and that, since prevention of tax evasion is justified only if the death occurs only a short time after the transfer of residence, the maximum permitted period is 10 years. The same commentaries state also that the scope can be extended to cover not only nationals of the State concerned but also residents who are not nationals of that State.