Keywords
Summary

Keywords

Tax provisions – Harmonisation of laws – Indirect taxes on the raising of capital – National legislation imposing tax on applications for new securities and the physical delivery of new bearer securities – Not permissible

(Council Directive 69/335, Art. 11)

Summary

A Member State fails to fulfil its obligations under Article 11 of Directive 69/335 concerning indirect taxes on the raising of capital, as amended by Directive 85/303 which provides, among other things, that Member States must not subject to any form of taxation the creation, issue, admission to quotation on a stock exchange, making available on the market or dealing in stocks, shares or other securities of the same type

- which imposes a tax on stock exchange transactions on applications made in that Member State for new securities issued when a company or investment fund is being set up or following the completion of an increase in capital or as part of a loan issue, and

- which imposes a tax on the delivery of bearer securities on the physical delivery of bearer securities relating to its national or foreign government stocks, in the case of new securities issued when a company or investment fund is being set up or following the completion of an increase in capital or as part of a loan issue,

While it is true that that provision does not expressly mention the first acquisition or the initial delivery of the securities referred to, the fact remains that to permit the levying of tax or duty on the initial acquisition of a newly issued security or on the physical delivery of a bearer security occurring as part of its issue, amounts in reality to taxing the very issue of that security as those transactions form an integral part of an overall transaction with regard to the raising of capital.

(see paras 32, 46-47, 53, operative part)