Keywords
Summary

Keywords

1. Questions referred for a preliminary ruling – Jurisdiction of the Court – Limits – Interpretation sought owing to the applicability, to purely internal situations, of provisions of a directive transposed into national law after the treatment of internal situations has been aligned with European Union law

(Art. 267 TFEU)

2. Approximation of laws – Common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States – Directive 90/434 – Operations having as their purpose tax evasion or tax avoidance

(Council Directive 90/434, Art. 11(1)(a))

Summary

1. Where, in regulating purely internal situations, domestic legislation adopts the same solutions as those adopted in EU law in order, in particular, to avoid discrimination against nationals of the Member State in question or any distortion of competition, it is clearly in the European Union’s interest that, in order to forestall future differences of interpretation, provisions or concepts taken from EU law should be interpreted uniformly, irrespective of the circumstances in which they are to apply.

Accordingly, where a national regulation provides that the national and cross-border restructuring operations are subject to the same merger taxation system and that the rule that enables the benefit of that taxation system to be refused when there are no valid commercial reasons, set out in Article 11(1)(a) of Directive 90/434 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States, is to be applied in purely internal situations too, the Court has jurisdiction to answer the questions referred by the national court relating to the interpretation of the provisions of Directive 90/434, even though they do not directly govern the situation at issue in the main proceedings.

(see paras 20-21, 23)

2. Article 11(1)(a) of Directive 90/434 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States, is to be interpreted as meaning that, in the case of a merger operation between two companies of the same group, the fact that, on the date of the merger operation, the acquired company does not carry out any activity, does not have any financial holdings and transfers to the acquiring company only substantial tax losses of undetermined origin, even though that operation has a positive effect in terms of cost structure savings for that group, may constitute a presumption that the operation has not been carried out for ‘valid commercial reasons’ within the meaning of Article 11(1)(a). It is incumbent on the national court to verify, in the light of all the circumstances of the dispute on which it is required to rule, whether the constituent elements of the presumption of tax evasion or avoidance, within the meaning of that provision, are present in the context of that dispute.

In that regard, the concepts of restructuring and rationalisation referred to in Article 11(1)(a) of Directive 90/434 must be understood as involving more than the attainment of a purely fiscal advantage and any operation of restructuring and rationalisation having only such an aim cannot constitute a valid commercial reason within the meaning of that provision. Therefore, in principle, there is nothing to prevent a merger operation from having valid commercial reasons where it carries out restructuring or rationalisation of a group that allows its administrative and management costs to be reduced. However, this would not be the case for an acquisition operation, where it seems clear that, having regard to the magnitude of the anticipated tax benefit, the saving made by the group concerned in terms of cost structure is quite marginal.

Furthermore, by automatically accepting that the saving in the cost structure resulting from the reduction of the administrative and management costs constitutes a valid commercial reason, without taking account of the other objectives of the proposed operation, and particularly the tax advantages, the rule set out in Article 11(1)(a) of Directive 90/434 would be entirely deprived of its purpose, which consists of safeguarding the financial interests of the Member States by providing, in accordance with the ninth recital in the preamble to that directive, the option for those Member States to refuse the benefit of the provisions laid down by the directive in the event of tax evasion or avoidance.

(see paras 46-47, 49, 52, operative part)