Tax provisions – Harmonisation of laws – Indirect taxes on the raising of capital
(Council Directive 69/335, Art. 11(a))
Article 11(a) of Directive 69/335 concerning indirect taxes on the raising of capital, as amended by Directive 85/303, must be interpreted as meaning that it prohibits the levying of a duty on the issue of shares into a clearance service.
To permit the levying of tax or duty on the initial acquisition of a newly issued security amounts in reality to taxing the very issue of that security as it forms an integral part of an overall transaction with regard to the raising of capital.
That initial acquisition cannot be considered to constitute a ‘transfer’ within the meaning of Article 12(1)(a) of Directive 69/335 if it is not to deprive Article 11(a) of that directive of its practical effect and call in question the clear distinction established by those two articles between the concepts of ‘issue’ and ‘transfer’. In fact, such an interpretation would have the consequence that issues could nevertheless be subject to a tax or duty, although they, while necessarily involving an acquisition of newly issued securities, must not, under Article 11(a), be subject to any taxes or duties other than capital duty. Accordingly, a tax on that initial acquisition cannot fall within the derogation under Article 12(1)(a). Moreover, that tax cannot be considered, in reality, to apply to future transfers, since neither the tax basis of that tax nor the taxable person is determined by reference to such transfers, which are in any event hypothetical.
Therefore, to the extent that that tax is levied on new securities following an increase in capital, such a tax constitutes taxation for the purposes of Article 11(a) of that directive which is prohibited by that provision.
(see paras 32, 34-38, operative part)