Case C‑374/17

Finanzamt B

v

A-Brauerei

(Request for a preliminary ruling from the Bundesfinanzhof)

(Reference for a preliminary ruling — State aid — Article 107(1) TFEU — Real property transfer tax — Exemption — Transfers in ownership of a property occurring as a result of restructuring procedures carried out within certain groups of companies — Concept of ‘State aid’ — Condition relating to selectivity — Justification)

Summary — Judgment of the Court (Grand Chamber), 19 December 2018

1. State aid — Concept — Selective nature of the measure — Measure conferring a tax advantage — Measure of a general nature applicable without distinction to all economic operators — Not selective in character — Assessment of the general nature of the measure — Tax exemption distinguishing between two categories of operators in a comparable situation — No measure of a general nature

   (Art. 107(1) TFEU)

2. State aid — Concept — Selective nature of the measure — Derogation from the general tax system — Justification derived from the nature and general scheme of the system — Criteria for assessment — Tax exemption seeking to avoid double taxation

   (Art. 107(1) TFEU)

1.  See the text of the decision.

   (see paras 20-34)

2.  Article 107(1) TFEU must be interpreted as meaning that a tax advantage, such as that at issue in the main proceedings, which consists in exempting from real property transfer tax the transfer of ownership of a property which occurred because of a restructuring procedure involving only companies of the same group, linked by a shareholding of at least 95% during a minimum, uninterrupted period of five years prior to that procedure and of five years thereafter, does not fulfil the condition relating to the selectivity of the advantage concerned, laid down in Article 107(1) TFEU.

   In the context of tax measures, in order to classify a national tax measure as ‘selective’, the Commission must begin by identifying the ordinary or ‘normal’ tax system applicable in the Member State concerned, and thereafter demonstrate that the tax measure at issue is a derogation from that ordinary system, in so far as it differentiates between operators who, in the light of the objective pursued by that ordinary tax system, are in a comparable factual and legal situation (see, to that effect, judgment of 21 December 2016, Commission v World Duty Free Group and Others, C‑20/15 P and C‑21/15 P, EU:C:2016:981, paragraph 57).

   It should, however, be borne in mind, in the second place, that, according to the settled case-law of the Court, the concept of ‘State aid’ does not cover measures that differentiate between undertakings which, in the light of the objective pursued by the legal regime concerned, are in a comparable factual and legal situation, and are, therefore, a priori selective, where the Member State concerned is able to demonstrate that that differentiation is justified since it flows from the nature or general structure of the system of which the measures form part (judgment of 21 December 2016, Commission v World Duty Free Group and Others, C‑20/15 P and C‑21/15 P, EU:C:2016:981, paragraph 58 and the case-law cited).

   In its case-law, the Court has accepted that objectives inherent in the general tax system concerned could justify an a priori selective tax regime (see, to that effect, judgments of 29 April 2004, GIL Insurance and Others, C‑308/01, EU:C:2004:252, paragraphs 74 to 76, and of 8 September 2011, Paint Graphos and Others, C‑78/08 to C‑80/08, EU:C:2011:550, paragraphs 64 to 76).

   In the present case, the objective related to the proper functioning of the general tax regime at issue in the main proceedings, seeking to avoid double and, hence, excessive taxation, may therefore give good grounds for restricting the tax exemption provided for by Paragraph 6a of the Grunderwerbsteuergesetz (the Law on real property transfer tax) (GrEStG) to the restructuring procedures carried out between companies linked by a shareholding of at least 95% during a minimum, uninterrupted period of five years before and five years after that procedure.

   (see paras 36, 44, 49, 50, 53, operative part)