Source: All England Reporter
Publisher Citation: [2002] All ER (D) 38 (Jan)
Court: Court of Justice of the European Communities (Fifth Chamber)

Judges Jann, (President of the Chamber, Rapporteur), von Bahr, La Pergola, Sevón and Timmermans

Judgment Dates: 15 January 2002


European Community - Taxation - Common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares - Whether 'transfer of assets' where proceeds of loan remained with transacting company and obligations of loan were transferred to company receiving transfer and where transacting company retains small number of shares in a third company - Whether 'independent company' exists where cash-flow requirements were satisfied by credit facility on the basis that security was provided in the form of shares representing the capital of that company - Council Directive (EEC) 90/434, arts 2 and 4.

The Case

On a reference to the Court of Justice of the European Communities by the Danish Vestre Landsret (Western Regional Court) for a preliminary ruling on questions on the proper the interpretation of art2 of Council Directive (EEC) 90-434, the court ruled: (i)art 2 was to be interpreted as meaning that there was no transfer of assets within the meaning of the directive where the terms of a transaction were such that the proceeds of a significant loan contracted by the transferring company remained with that company and the obligations arising from the loan were transferred to the company receiving the transfer; and (ii)it was for the national court to determine whether a transfer of assets involved an independent business within the meaning of art2.

Practice Areas

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