Missionswerk Werner Heukelbach eV v Belgian State.
Date: 2011-02-10
15. Next, as regards the free movement of capital, it should be borne in mind that, in the absence of a definition in the FEU Treaty of the concept of ‘movement of capital’, the Court has recognised the Nomenclature annexed to Directive 88/361 as having indicative value, even though that directive 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, which in turn became Articles 56 EC to 60 EC), it being understood that, in accordance with its introduction, the list set out therein is not exhaustive (see Case C‑513/03 van Hilten-van der Heijden [2006] ECR I‑1957, paragraph 39; Case C-386/04 Centro di Musicologia Walter Stauffer  [2006] ECR I-8203, paragraph 22; Case C‑11/07 Eckelkamp and Others  [2008] ECR I‑6845, paragraph 38; Case C‑43/07 Arens‑Sikken  [2008] ECR I‑6887, paragraph 29; and Case C‑510/08 Mattner  [2010] ECR I‑0000, paragraph 19).
16. 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 is a movement of capital for the purposes of Article 63 TFEU, except in cases where its constituent elements are confined within a single Member State (see, to that effect, Eckelkamp and Others , paragraph 39 and the case-law cited). However, a situation such as that in the case before the referring court, in which a person residing in Belgium has left a legacy to a non-profit-making body with its seat in Germany, in no way constitutes a purely internal situation.
18. Lastly, as regards the relevance of the reference made in the question to Article 18 TFEU, which lays down a general prohibition of all discrimination on grounds of nationality, it should be noted that that provision applies independently only to situations governed by EU law for which the TFEU lays down no specific rules of non-discrimination (Case C‑311/08 SGI  [2010] ECR I‑0000, paragraph 31 and the case-law cited, and Case C‑97/09 Schmelz  [2010] ECR I‑0000, paragraph 44).
19. Accordingly, since the provisions on the free movement of capital are applicable and provide specific rules on non-discrimination, Article 18 TFEU does not apply.
21. Article 63(1) TFEU lays down a general prohibition on restrictions on the movement of capital between Member States.
22. It is settled law that the measures prohibited by Article 63(1) TFEU as being restrictions on the movement of capital include, in the case of inheritances, those which have the effect of reducing 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 and the case-law cited).
24. Thus, that legislation leads a legacy to be taxed more heavily where the beneficiary is a non-profit-making body which has its centre of operations in a Member State in which the deceased neither actually resided nor worked and, as a consequence, has the effect of restricting the movement of capital by reducing the value of that inheritance (see, by analogy, Eckelkamp and Others , paragraph 45).
25. Furthermore, as the Commission has stated, the application to certain cross-border capital movements of a higher rate of tax than that applied to movements within Belgium is liable to make those cross-border capital movements less attractive, by dissuading Belgian residents from naming as beneficiaries persons established in Member States in which those Belgian residents have not actually resided or worked (see, to that effect, Case C‑318/07 Persche [2009] ECR I‑359, paragraph 38).
29. The Court has consistently held that, for national tax legislation to be capable of being regarded as compatible with the provisions of the FEU Treaty on the free movement of capital, the difference in treatment must concern situations which are not objectively comparable or it must be justified by an overriding reason in the public interest (Case C‑35/98 Verkooijen  [2000] ECR I‑4071, paragraph 43; Case C‑319/02 Manninen  [2004] ECR I‑7477, paragraph 29; Case C‑512/03 Blanckaert  [2005] ECR I‑7685, paragraph 42; and Case C-182/08 Glaxo Wellcome  [2009] ECR I-8591, paragraph 68).
30. According to the Court, whilst it is lawful for a Member State to require, for the purposes of granting certain tax advantages, that there be a sufficiently close link between the bodies which that Member State recognises as pursuing some of its charitable purposes and the activities pursued by those bodies (see, to that effect, Centro di Musicologia Walter Stauffer , paragraph 37), that Member State cannot grant such advantages only to bodies which are established in its territory and whose activities are capable of relieving that State of some of its responsibilities (see, to that effect, Persche , paragraph 44).
31. In particular, the possibility that a Member State may be relieved of some of its responsibilities does not mean that it is free to introduce a difference in treatment between, on the one hand, national bodies which are recognised as pursuing charitable purposes and, on the other, bodies established in another Member State which are recognised as pursuing charitable purposes, on the ground that legacies left to the latter cannot, even though the activities of those bodies reflect the same objectives as the legislation of the former Member State, have compensatory effects for budgetary purposes. It is settled law that the need to prevent the reduction of tax revenues is neither among the objectives stated in Article 65 TFEU nor an overriding reason in the public interest capable of justifying a restriction on a freedom instituted by the Treaty (see, to that effect, Persche , paragraph 46).
32. The Court has also held that, where a body recognised as pursuing charitable purposes in one Member State satisfies the conditions laid down for that purpose in the legislation of another Member State and where its object is to promote the very same interests of the community at large, so that it would be likely to be recognised in the latter Member State as pursuing charitable purposes – a matter which it is for the national authorities of that Member State, including its courts, to determine – the authorities of the latter Member State cannot deny that body the right to equal treatment solely on the ground that it is not established in the territory of that Member State (see, to that effect, Persche , paragraph 49).
33. A body which is established in one Member State but satisfies the conditions laid down in another Member State for the grant of tax advantages, is, as regards the grant by the latter Member State of tax advantages intended to encourage the charitable activities concerned, in a situation which is comparable to that of the bodies established in the latter Member State which are recognised as having charitable purposes (see, to that effect, Persche , paragraph 50).
37. It follows from all the foregoing that the answer to the question referred is that Article 63 TFEU precludes legislation of a Member State which reserves application of succession duties at the reduced rate to non-profit-making bodies which have their centre of operations in that Member State or in the Member State in which, at the time of death, the deceased actually resided or had his place of work, or in which he had previously actually resided or had his place of work.
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