Case C‑589/13

Proceedings against F.E. Familienprivatstiftung Eisenstadt

(Request for a preliminary ruling from the Verwaltungsgerichtshof)

‛Reference for a preliminary ruling — Free movement of capital — Article 56 EC — Interim taxation of capital gains and income from the disposal of holdings by a national foundation — Refusal of right to deduct from the taxable amount gifts to non-resident beneficiaries exempt from tax in the Member State of the foundation under a double taxation convention’

Summary — Judgment of the Court (Fifth Chamber), 17 September 2015

Free movement of capital and liberalisation of payments — Restrictions — Tax legislation — Income tax — Capital gains and income from the disposal of holdings by a resident private foundation — Deductibility of gifts to resident beneficiaries — Exclusion of gifts to non-resident beneficiaries exempt from the tax as a result of a double taxation convention — Difference of treatment — Comparable situations — Not permissible — No justification

(Art. 56 EC)

Article 56 EC precludes tax legislation of a Member State under which, as regards interim tax which is charged on capital gains and income from the disposal of holdings of a resident private foundation, that foundation has the right to deduct from its taxable amount only gifts made in the course of a given assessment period that have been the subject of a tax levied within that period on the beneficiaries of those gifts in the Member State in which the foundation is taxed, whereas such a deduction is excluded by that national tax legislation where the beneficiaries reside in another Member State and are exempt, on the basis of a double taxation convention, from a tax that is otherwise charged on gifts in the Member State in which the foundation is taxed.

First, such a system involves a difference of treatment in objectively comparable situations.

Second, such a restriction of the free movement of capital can be justified neither by the preservation of a balanced allocation of powers of taxation between Member States nor the need to safeguard the coherency of the national tax regime. With regard to the first objective, having abandoned its powers of taxation on gifts to persons residing in other Member States in double taxation conventions, a Member State cannot rely on a balanced allocation of powers of taxation in order to levy a specific tax on foundations that make gifts to such persons on the basis that those persons are not subject to its tax jurisdiction. With regard to the second objective, the coherency of the national tax regime cannot be relied on where there is no direct link between the tax advantage concerned and the offsetting of that advantage by a particular tax. There is no such direct link where, in particular, different taxes or the tax treatment of different taxpayers are concerned. The deduction of the amount corresponding to the gifts made by the private foundation subject to the interim tax and the taxation of the beneficiaries for those gifts necessarily concern different taxpayers.

(see paras 42, 63, 71, 80, 81, 83, 85, operative part)