Vera Mattner v Finanzamt Velbert.
Date: 2010-04-22
18. According to settled case-law, Article 56(1) EC lays down a general prohibition on restrictions on the movement of capital between Member States (Case C‑11/07 Eckelkamp and Others  [2008] ECR I‑6845, paragraph 37; Case C‑43/07 Arens‑Sikken  [2008] ECR I‑6887, paragraph 28; and Case C‑67/08 Block  [2009] ECR I‑883, paragraph 18).
19. In the absence of a definition in the Treaty of ‘movement of capital’ for the purposes of Article 56(1) EC, the Court has previously recognised the nomenclature which forms Annex I 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adopted on the basis of Articles 69 and 70(1) of the EEC Treaty (later Articles 69 and 70(1) of the EC Treaty; articles repealed by the Treaty of Amsterdam), it being understood that, in accordance with the introduction to that annex, the list it contains is not exhaustive (see, inter alia, Case C‑513/03 van Hilten-van der Heijden  [2006] ECR I‑1957, paragraph 39; Eckelkamp and Others , paragraph 38; Arens-Sikken , paragraph 29; and Block , paragraph 19). Gifts and endowments appear under heading XI, ‘Personal capital movements’, of Annex I to Directive 88/361 (Case C‑318/07 Persche  [2009] ECR I‑359, paragraph 24).
20. Like the tax charged on inheritances, which consist in the transfer to one or more persons of assets left by a deceased person and likewise fall under that heading of Annex I to the directive (see, inter alia, Case C‑256/06 Jäger  [2008] ECR I‑123, paragraph 25; Eckelkamp and Others , paragraph 39; Arens-Sikken , paragraph 30; Block , paragraph 20; and Case C‑35/08 Busley and Cibrian Fernandez  [2009] ECR I‑0000, paragraph 18), the tax treatment of gifts, whether they are gifts of money, immovable property or movable property, therefore comes under the Treaty provisions on the movement of capital, except where their constituent elements are confined within a single Member State (see, to that effect, Persche , paragraph 27).
23. In those circumstances, since there is nothing in the order for reference which could connect the dispute in the main proceedings with freedom of movement for workers or freedom of establishment, there is no need to consider whether Articles 39 EC and 43 EC apply (see, to that effect, Busley and Cibrian Fernandez , paragraph 19).
25. It follows from the Court’s case-law on inheritance that national provisions which determine the value of immovable property for the purposes of calculating the amount of tax payable when it is acquired as a gift not only may be capable of discouraging the purchase of immovable property in the Member State concerned but may also have the effect of reducing the value of a gift by a resident of a Member State other than that in which the property is located (see, to that effect, Jäger , paragraph 30; Eckelkamp and Others , paragraph 43; and Arens-Sikken , paragraph 36).
26. In the case of gifts, it follows from that case-law that the measures prohibited by Article 56(1) EC as being restrictions on the movement of capital include those whose effect is to reduce the value of a gift by a resident of a Member State other than that in which the property concerned is located and which taxes the gift of that property (see, by analogy, van Hilten-van der Heijden , paragraph 44; Jäger , paragraph 31; Eckelkamp and Others , paragraph 44; Arens-Sikken , paragraph 37; and Block , paragraph 24).
27. In the present case, national provisions such as those at issue in the main proceedings, in so far as they provide that a gift of immovable property located in the Federal Republic of Germany qualifies for a smaller allowance against the taxable value where the donor and the donee reside in another Member State than would apply if one of them were resident in German territory, with the result that gifts in the first category are subject to gift tax that is higher than the tax payable on the second category of gifts, have the effect of restricting the movement of capital by reducing the value of a gift which includes such property (see, by analogy, Eckelkamp and Others , paragraph 45).
28. Where those provisions make the application of an allowance against the taxable value of the immovable property concerned dependent on the place of residence of the donor and the donee on the date of the gift, the greater tax burden on the gift between non-residents constitutes a restriction on the free movement of capital (see, by analogy, Eckelkamp and Others , paragraph 46).
32. In so far as that provision of Article 58 EC is a derogation from the fundamental principle of the free movement of capital, it must be interpreted strictly. It cannot therefore be interpreted as meaning that all tax legislation which draws a distinction between taxpayers on the basis of their place of residence or the Member State in which they invest their capital is automatically compatible with the Treaty (see Jäger , paragraph 40; Eckelkamp and Others , paragraph 57; and Arens-Sikken , paragraph 51).
33. The derogation in Article 58(1)(a) EC is itself limited by Article 58(3) EC, which provides that the national provisions referred to in paragraph 1 of that article ‘shall not constitute a means of arbitrary discrimination or a disguised restriction on the free movement of capital and payments as defined in Article 56’.
34. A distinction must therefore be drawn between the unequal treatment permitted under Article 58(1)(a) EC and the arbitrary discrimination prohibited under Article 58(3) EC. According to the case-law, in order for national tax legislation such as that at issue in the main proceedings – which, for the purposes of calculating gift tax, distinguishes as to the amount of the allowance applicable to the taxable value of immovable property located in the Member State concerned according to whether the donor or the donee resides in that State or they both reside in another Member State – to be regarded as compatible with the Treaty provisions on the free movement of capital, the difference in treatment must concern situations which are not objectively comparable or be justified by overriding reasons in the general interest. In order to be justified, moreover, the difference in treatment between those two categories of gifts must not go beyond what is necessary in order to attain the objective of the legislation in question (see Case C‑319/02 Manninen  [2004] ECR I‑7477, paragraph 29; Eckelkamp and Others , paragraphs 58 and 59; and Arens-Sikken , paragraphs 52 and 53).
35. Contrary to the submissions of the Finanzamt and the German Government, that difference in treatment cannot be justified on the ground that it relates to situations which are objectively different.
36. According to the case-file submitted to the Court, the amount of the tax on gifts of immovable property in Germany is calculated pursuant to the ErbStG on the basis both of the value of the property and of the family relationship, if any, between the donor and the donee. Neither of those criteria depends on the place of residence of the donor or the donee. Consequently, as regards the amount of gift tax payable in respect of immovable property in Germany which is the subject of a gift, there cannot be any objective difference justifying the unequal tax treatment of the situation in which neither person resides in that Member State and that in which at least one of them resides there. Ms Mattner’s situation is therefore comparable to that of any donee who acquires immovable property in Germany by gift from a person resident in Germany with whom there is a family link, and also to that of a donee residing in Germany who makes that acquisition from such a person who is not resident there (see, to that effect, Jäger , paragraph 44; Eckelkamp and Others , paragraph 61; and Arens-Sikken , paragraph 55).
37. The German legislation in principle regards both the recipient of a gift between non-residents and the recipient of a gift involving at least one resident as taxpayers for the purposes of charging gift tax on gifts of immovable property in Germany. Only with respect to the allowance applied to the taxable value does that legislation, for the purposes of calculating the tax on gifts of immovable property in Germany, apply different treatment to gifts between non-residents and gifts involving a resident. By contrast, the determination of the class and rate of tax, laid down in Paragraphs 15 and 19 of the ErbStG, follows the same rules for both categories of gifts (see, by analogy, Eckelkamp and Others , paragraph 62, and Arens-Sikken , paragraph 56).
38. Where national legislation places on the same footing, for the purposes of taxing immovable property acquired by gift which is located in the Member State concerned, non-resident donees who have acquired the property from a non‑resident donor, on the one hand, and non-resident or resident donees who have acquired it from a resident donor and resident donees who have acquired it from a non-resident donor, on the other, it cannot without infringing the requirements of European Union law treat those donees differently in connection with that tax as regards the application of an allowance against the taxable value of the immovable property. By treating gifts to those two classes of persons in the same way except in relation to the amount of the allowance the donee may benefit from, the national legislature accepted that there is no objective difference between them in regard to the detailed rules and conditions of charging gift tax which could justify a difference in treatment (see, by analogy, Eckelkamp and Others , paragraph 63, and Arens-Sikken , paragraph 57).
41. On this point, the Court has already held, in its case-law on the free movement of capital and inheritance tax, that a national of a Member State cannot be deprived of the possibility of relying on the provisions of the Treaty on the ground that he is profiting from tax advantages which are legally provided for by the rules in force in a Member State other than his State of residence (Case C‑364/01 Barbier  [2003] ECR I‑15013, paragraph 71, and Eckelkamp and Others , paragraph 66).
42. In any event, the Member State in which the immovable property which is the subject of the gift is located cannot, in order to justify a restriction on the free movement of capital arising from its own legislation, rely on the possibility, beyond its control, of the donee benefiting from a similar allowance by another Member State, such as that in which the donor and the donee resided on the date of the gift, which might wholly or partly offset the loss incurred by the donee as a result of the smaller allowance when calculating the gift tax payable in the former Member State (see, by analogy, Eckelkamp and Others , paragraph 68, and Arens‑Sikken , paragraph 65).
43. A Member State cannot rely on the existence of an advantage granted unilaterally by another Member State – in this case the Member State in which the donor and the donee reside – to escape its obligations under the Treaty, in particular under the Treaty provisions on the free movement of capital (see Eckelkamp and Others , paragraph 69, and Arens-Sikken , paragraph 66).
53. On this point, it should be recalled that the Court has indeed held that the need to preserve the coherence of a tax system may justify a restriction on the exercise of the fundamental freedoms guaranteed by the Treaty. However, for such a justification to be accepted, a direct link has to be established between the granting of the tax advantage concerned and the offsetting of that advantage by a particular tax charge (see Manninen , paragraph 42, and Case C‑182/08 Glaxo Wellcome  [2009] ECR I‑0000, paragraphs 77 and 78).
54. In the present case, it suffices to state that the tax advantage resulting, in the Member State in which the immovable property which is the subject of a gift is located, from the application of a full allowance to the taxable value where that gift involves at least one resident of that State is not offset in that State by any particular tax charge in the context of gift tax.