Source: All England Reporter
Publisher Citation: [2002] All ER (D) 319 (Nov)
Court: Court of Justice of the European Communities (Fifth Chamber)
Judge:

Judges Wathelet (President), Timmermans (Rapporteur), Edward, Jann and Rosas

Judgment Dates: 21 November 2002

Catchwords

European Communities - Right of establishment and freedom to provide services - Freedom of movement of capital - Statutory provisions having effect that capital contribution in form of transfer of shares at undervalue taxed less advantageously if contribution to legal person domiciled in another member state than would have been the case if there had been no such foreign proprietorial interests - Compatibility with right to freedom of establishment and freedom to provide services and free movement of capital - Articles 43, 48, 56, 48 EC.

The Case

Articles43 EC and 48 EC precluded a national provision which excluded the transferor at undervalue of shares in companies from the benefit of deferral tax due on capital gains made on those shares where the transfer was to a foreign legal person in which the transferor directly or indirectly had a holding, provided that that holding gave him definite influence over the decision of that foreign legal person and allowed him to determine its activities. Articles56 EC and 58 EC precluded a national provision which excluded the transferor at undervalue of shares in companies from the benefit of deferral tax due on capital gains made on those shares where the transfer was to a foreign legal person in which the transferor directly or indirectly had a holding which was not such as to give him definite influence over the decisions of that foreign legal person or allow him to determine its activities.

Practice Areas

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