Finanzamt Offenbach am Main-Land v Keller Holding GmbH.
Date: 2006-02-23
24. Given that the legislation at issue in the main proceedings applies to situations related to intra-Community trade, the problem raised by those proceedings may fall within the scope of the provisions of the Treaty relating to the fundamental freedoms (see, to that effect, Case 286/81 Oosthoek’s Uitgeversmaatschappij  [1982] ECR 4575, paragraph 9, and Case C-300/01 Salzmann  [2003] ECR I-4899, paragraph 32).
26. However, it is for the Court to provide the national court with all those elements for the interpretation of Community law which may be of assistance in adjudicating on the case pending before it, whether or not that court has specifically referred to them in its questions (see, inter alia, Case C-87/97 Consorzio per la tutela del formaggio Gorgonzola  [1999] ECR I-1301, paragraph 16, and Case C-456/02 Trojani  [2004] ECR I-7573, paragraph 38).
28. First of all, it should be recalled that, according to settled case-law, although direct taxation falls within their competence, the Member States must none the less exercise that competence consistently with Community law (Case C-311/97 Royal Bank of Scotland  [1999] ECR I-2651, paragraph 19, and Case C-319/02 Manninen  [2004] ECR I-7477, paragraph 19).
29. The freedom of establishment conferred by Article 52 of the Treaty on Community nationals, which entails for them access to, and pursuit of, activities as self-employed persons and the forming and management of undertakings on the same conditions as those laid down for its own nationals by the laws of the Member State of establishment, includes, pursuant to Article 58 of the Treaty, the right of companies or firms formed in accordance with the laws of a Member State and having their registered office, central administration or principal place of business within the Community to pursue their activities in the Member State concerned through a subsidiary, a branch or an agency (Case C-307/97 Saint-Gobain ZN [1999] ECR I-6161, paragraph 35).
30. Furthermore, even though, according to their wording, the provisions concerning freedom of establishment are directed to ensuring that foreign nationals and companies are treated in the host Member State in the same way as nationals of that State, they also prohibit the Member State of origin from hindering the establishment in another Member State of one of its nationals or of a company incorporated under its legislation (Case C-264/96 ICI  [1998] ECR I-4695, paragraph 21).
35. In the light of that difference in treatment, a parent company might be dissuaded from carrying on its activities through the intermediary of subsidiaries or indirect subsidiaries established in other Member States (see, to that effect, Case C-168/01 Bosal  [2003] ECR I‑9409, paragraph 27).
40. In that respect, it should be pointed out that, in paragraphs 28 and 21 respectively of the judgments in Bachmann  and Commission  v Belgium , the Court recognised that the need to maintain the cohesion of a tax system can justify a restriction on the exercise of the fundamental freedoms guaranteed by the Treaty. However, for an argument based on such a justification to succeed, a direct link must be established between the tax advantage concerned and the offsetting of that advantage by a particular tax levy (see, to that effect, Case C‑484/93 Svensson and Gustavsson  [1995] ECR I-3955, paragraph 18; ICI , paragraph 29; and Manninen , paragraph 42).
44. For the same reasons, the national legislation at issue in the main proceedings cannot be justified by reference to the principle of territoriality, as acknowledged by the Court in paragraph 22 of the judgment in Case C‑250/95 Futura Participations and Singer  [1997] ECR I‑2471. That legislation cannot be regarded as an application of that principle since it excludes the deductibility of financing costs incurred by a parent company subject to unlimited tax liability in Germany and receiving dividends from an indirect subsidiary established in Austria by reason of the fact that they are exempt from tax in Germany, whereas dividends paid to the same parent company by an indirect subsidiary subject to unlimited tax liability in Germany and having its registered office in that Member State also benefit in fact, by means of the method of offsetting the tax paid by the distributing company, from such an exemption.
45. Nor is the German Government entitled, in order to justify the national legislation at issue in the main proceedings, to rely on the fact that the legislation merely implements a taxing power provided for in Article 4(2) of Directive 90/435, which affords to each Member State the option of providing, where a parent company receives profits distributed by a subsidiary established in another Member State – profits which the first Member State refrains from taxing or taxes while authorising that parent company to deduct from the amount of tax due that fraction of the corporation tax paid by the subsidiary which relates to those profits –, that charges relating to that holding may not be deducted from the taxable profits of that parent company. Irrespective of the question whether that directive applies to the present case, such an option can be exercised only in compliance with the fundamental provisions of the Treaty, in this case Article 52 thereof.
48. As Article 6 thereof states, the provisions of that agreement, in so far as they are identical in substance to corresponding rules of the Treaty and to acts adopted in application of that Treaty, must, in their implementation and application, be interpreted in conformity with the relevant rulings of the Court given prior to the date of signature of that agreement. Furthermore, both the Court and the EFTA Court have recognised the need to ensure that the rules of the EEA Agreement which are identical in substance to those of the Treaty are interpreted uniformly (Case C-452/01 Ospelt and Schlössle Weissenberg [2003] ECR I-9743, paragraph 29; Case C-286/02 Bellio F.lli  [2004] ECR I‑3465, paragraph 34; see also the judgment of the EFTA Court of 12 December 2003 in Case E-1/03 EFTA Surveillance Authority  v Iceland , EFTA Court Report, p. 143, paragraph 27).
49. It must be observed that the rules prohibiting restrictions on the freedom of establishment, set out in Article 31 of the EEA Agreement, are identical to those imposed by Article 52 of the Treaty.
51. Since the provisions of the Treaty and of the EEA Agreement relating to freedom of establishment thus preclude national legislation such as that at issue in the main proceedings, it is not necessary to consider whether the provisions of the Treaty relating to free movement of capital also preclude that legislation.
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