Keywords
Summary

Keywords

Free movement of capital – Restrictions – Inheritance tax

(Art. 63 TFEU)

Summary

Article 63 TFEU precludes legislation of a Member State which reserves application of succession duties at the reduced rate to non-profit-making bodies that have their centre of operations in that Member State or in the Member State in which, at the time of death, the deceased actually resided or had his place of work, or in which he had previously actually resided or had his place of work.

Whilst it is lawful for a Member State to require, for the purposes of granting certain tax advantages, there to be a sufficiently close link between the bodies which that Member State recognises as pursuing some of its charitable purposes and the activities pursued by those bodies, that Member State may not grant such advantages only to bodies established in its territory and whose activities are capable of relieving that State of some of its responsibilities. In particular, the possibility that a Member State may be relieved of some of its responsibilities does not mean that it is free to introduce a difference in treatment between national bodies recognised as pursuing charitable purposes and bodies established in another Member State that are recognised as pursuing charitable purposes, on the ground that legacies left to the latter cannot, even though the activities of those bodies reflect the same objectives as the legislation of the first Member State, have compensatory effects for budgetary purposes. The need to prevent the reduction of tax revenues is neither among the objectives stated in Article 65 TFEU nor an overriding reason in the public interest capable of justifying a restriction of a freedom established by the Treaty.

(see paras 30-31, 37 and operative part)