A. Leur-Bloem v Inspecteur der Belastingdienst/Ondernemingen Amsterdam 2.
Date: 1997-07-17
21. The Netherlands Government points out that the judgment to be given by the Court would not be binding on national courts in the sense indicated in Kleinwort Benson  since the interpretation sought is asked for only in order to enable the court making the reference to apply domestic law. It also states that the reference to Community law made in the explanatory memorandum to the Netherlands Law is not binding but is only a factor in the interpretation of that Law.
24. According to settled case-law, the procedure provided for in Article 177 of the Treaty is a means of cooperation between the Court of Justice and national courts. It follows that it is for the national courts alone which are seised of the case and are responsible for the judgment to be delivered to determine, in view of the special features of each case, both the need for a preliminary ruling in order to enable them to give their judgment and the relevance of the questions which they put to the Court (see, in particular, the judgments in Joined Cases C-297/88 and C‑197/89 Dzodzi  [1990] ECR I-3763, paragraphs 33 and 34, and in Case C-231/89 Gmurzynska-Bscher  [1990] ECR I‑4003, paragraphs 18 and 19).
25. Consequently, where questions submitted by national courts concern the interpretation of a provision of Community law, the Court is, in principle, obliged to give a ruling (see Dzodzi  and Gmurzynska-Bscher , cited above, paragraphs 35 and 20 respectively). Neither the wording of Article 177 nor the aim of the procedur e established by that article indicates that the Treaty makers intended to exclude from the jurisdiction of the Court requests for a preliminary ruling on a Community provision where the domestic law of a Member State refers to that Community provision in order to determine the rules applicable to a situation which is purely internal to that State (see Dzodzi  and Gmurzynska-Bscher , cited above, paragraphs 36 and 25 respectively).
26. A reference by a national court can be rejected only if it appears that the procedure laid down by Article 177 of the Treaty has been misused and a ruling from the Court elicited by means of a contrived dispute, or it is obvious that Community law cannot apply, either directly or indirectly, to the circumstances of the case referred to the Court (see, to this effect, Dzodzi  and Gmurzynska-Bscher , cited above, paragraphs 40 and 23).
27. Applying that case-law, the Court has repeatedly held that it has jurisdiction to give preliminary rulings on questions concerning Community provisions in situations where the facts of the cases being considered by the national courts were outside the scope of Community law but where those provisions had been rendered applicable either by domestic law or merely by virtue of terms in a contract (see, as regards the application of Community law by domestic law, Dzodzi  and Gmurzynska-Bscher , cited above; Case 166/84 Thomasdünger  [1985] ECR 3001; Case C-384/89 Tomatis and Fulchiron  [1991] ECR I-127 and, as regards the application of Community law by the effect of contractual provisions, Case C-88/91 Federconsorzi  [1992] ECR I-4035 and Case C-73/89 Fournier [1992] ECR I-5621, all those cases being hereinafter referred to as ‘the Dzodzi  line of cases’). In those cases, the provisions of domestic law and the relevant contractual terms, which incorporated Community provisions, clearly did not limit application of the latter.
29. In Kleinwort Benson , the Court observed, in paragraph 19, that, unlike the situation in the Dzodzi  line of cases, the provisions of the Convention which the Court was asked to interpret had not been rendered applicable as such by the law of the contracting State concerned. In paragraph 16 of its judgment in Kleinwort Benson  the Court pointed out that the Act of Parliament in question took the Convention only as a model and only partially reproduced its terms. It went on to note, in paragraph 18, that express provision was made in the Act for the authorities of the contracting State concerned to adopt modifications ‘designed to produce divergence’ between provisions of the Act and the corresponding provisions of the Convention. Furthermore, the Act also made an express distinction between the provisions applicable to Community situations and those applicable to domestic situations. In the first case, in interpreting the relevant provisions of the Act, the national courts were bound by the case-law of the Court on the Convention, whereas in the second case they had only to take account of it, so that they could set it aside.
32. In those circumstances, where, in regulating purely internal situations, domestic legislation adopts the same solutions as those adopted in Community law in order, in particular, to avoid discrimination against its own nationals or, as in the case before the national court, any distortion of competition, it is clearly in the Community interest that, in order to forestall future differences of interpretation, provisions or concepts taken from Community law should be interpreted uniformly, irrespective of the circumstances in which they are to apply (see, to this effect, the judgment in Dzodzi , cited above, paragraph 37).
33. In such a case, and pursuant to the allocation of judicial functions between national courts and the Court of Justice under Article 177, it is for the national court alone to assess the precise scope of that reference to Community law, the jurisdiction of the Court being confined to considering provisions of Community law only ( Dzodzi  and Federconsorzi , cited above, paragraphs 41 to 42 and paragraph 10 respectively). Consideration of the limits which the national legislature may have placed on the application of Community law to purely internal situations is a matter for domestic law and consequently falls within the exclusive jurisdiction of the courts of the Member State ( Dzodzi , cited above, paragraph 42 and the judgment in Case C-73/89 Fournier  [1992] ECR I-5621, paragraph 23).
34. It follows from all the foregoing considerations that the answer to the first question must be that the Court of Justice has jurisdiction under Article 177 of the Treaty to interpret Community law where the situation in question is not governed directly by Community law but the national legislature, in transposing the provisions of a directive into domestic law, has chosen to apply the same treatment to purely internal situations and to those governed by the directive, so that it has aligned its domestic legislation to Community law.
The second question
The second question (a) to (d)
36. It must be observed first of all that it is clear from Article 2(d) and from the general scheme of the Directive that the common tax rules which it lays down, which cover different tax advantages, apply without distinction to all mergers, divisions, transfer of assets or exchanges of shares irrespective of the reasons, whether financial, economic or simply fiscal, for those operations.
38. Secondly, Article 11(1)(a) allows the Member States to refuse to apply or withdraw the benefit of all or any part of the provisions of the Directive, including the tax advantages to which the main proceedings relate, where it appears that the merger, division, transfer of assets or exchange of shares has, in particular, as its principal objective or as one of its principal objectives tax evasion or tax avoidance.
39. As part of that reservation of competence, Article 11(1)(a) provides that where ‘one of the operations referred to ... is not carried out for valid commercial reasons such as the restructuring or rationalization of the activities of the companies participating in the operation’, this may constitute a presumption of tax evasion or tax avoidance.
40. It is therefore clear from Article 2(d) and (h) and from Article 11(1)(a) that the Member States must grant the tax advantages provided for by the Directive in respect of the exchanges of shares referred to in Article 2(d) unless those operations have as their principal objective or as one of their principal objectives tax evasion or tax avoidance. In this regard, the Member States may stipulate that the fact that those operations were not carried out for valid commercial reasons constitutes a presumption of tax evasion or tax avoidance.
41. However, in order to determine whether the planned operation has such an objective, the competent national authorities cannot confine themselves to applying predetermined general criteria but must subject each particular case to a general examination. According to established case-law, such an examination must be open to judicial review (see, to this effect, the judgment in Case C-19/92 Kraus  [1993] ECR I-1663, paragraph 40).
43. In the absence of more detailed Community provisions concerning application of the presumption mentioned in Article 11(1)(a), it is for the Member States, observing the principle of proportionality, to determine the provisions needed for the purposes of applying this provision.
44. However, the laying down of a general rule automatically excluding certain categories of operations from the tax advantage, on the basis of criteria such as those mentioned in the second question (a) to (d), whether or not there is actually tax evasion or tax avoidance, would go further than is necessary for preventing such tax evasion or tax avoidance and would undermine the aim pursued by the Directive. This would also be the case if a rule of this kind were to be made subject to the mere possibility of the grant of a derogation, at the discretion of the administrative authority.
45. Such an interpretation is consistent with the aims both of the Directive and of Article 11 thereof. According to the first recital of its preamble, the aim of the Directive is to introduce tax rules which are neutral from the point of view of competition in order to allow enterprises to adapt themselves to the requirements of the common market, to increase their productivity and to improve their competitive strength at the international level. That same recital also states that mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States ought not to be hampered by restrictions, disadvantages or distortions arising in particular from the tax provisions of the Member States. It is only when the planned operation has as its objective tax evasion or tax avoidance that, according to Article 11 and the last recital of the preamble to the Directive, the Member States may refuse to apply the Directive.
Question 2(e)
47. It is clear from the wording and aims of Article 11, as it is from those of the Directive, that ‘valid commercial reasons’ is a concept involving more than the attainment of a purely fiscal advantage. A merger by way of exchange of shares having only such an aim cannot therefore constitute a valid commercial reason within the meaning of that article.