Keywords
Summary

Keywords

1. Freedom of movement for persons – Freedom of establishment – Provisions of the Treaty – Scope

(Arts 43 EC, 56 EC to 58 EC)

2. Freedom of movement for persons – Freedom of establishment – Tax legislation

(Art. 43 EC)

Summary

1. Inheritance tax legislation which lays down as a condition for the exemption from inheritance tax available for family undertakings the employment of a set number of workers in a region of the Member State concerned primarily affects freedom of establishment and falls within the scope of Article 43 EC. If it were to be accepted that such a national measure has restrictive effects on the free movement of capital, such effects would have to be seen as an unavoidable consequence of any restriction on freedom of establishment and do not justify an independent examination of that measure in the light of Articles 56 EC to 58 EC.

(see paras 12, 16, 18)

2. In the absence of valid justification, Article 43 EC precludes inheritance tax legislation of a Member State which excludes from the exemption from that tax available for family undertakings those undertakings which employ in the three years preceding the date of death of the deceased at least five workers in another Member State, whereas it grants such an exemption where the workers are employed in a region of the first Member State.

Such legislation is in principle contrary to Article 43 EC in that it provides for a difference in treatment between taxpayers on the basis of the place where the company owned by those taxpayers employs a certain number of workers for a certain period of time. It thus introduces indirect discrimination between taxpayers on the basis of the place of employment of a certain number of workers in a certain period, since that condition can undoubtedly be more easily fulfilled by a company already established in the Member State concerned.

Such legislation cannot be justified by considerations connected with the survival of small and medium-sized undertakings and the maintenance of employment in them, since in relation to the objective of preventing inheritance tax from jeopardising the continuation of family undertakings, and therefore the jobs which they bring, undertakings having their seat in another Member State are in a situation comparable to that of undertakings established in the first Member State.

Nor can the legislation in question be justified by the need to maintain the effectiveness of fiscal supervision, since the tax authorities could request the taxpayers concerned to provide themselves the evidence which the authorities consider necessary to be fully satisfied that those benefits are granted only where the jobs in question fulfil the criteria set out under national law.

(see paras 19, 21-22, 27-29, operative part)