Source: All England Reporter
Publisher Citation: [2002] All ER (D) 238 (Oct)
Court: Court of Justice of the European Communities (Sixth Chamber)

Judges Puissochet (President of the Chamber), Schintgen (Rapporteur), Skouris, Macken and Cunha Rodrigues

Judgment Dates: 17 October 2002


European Communities - Taxation - Capital duty - Transactions for acquisition of equity made by parent companies on behalf of subsidiaries - Payments for acquisition of equity made to subsidiary of capital company - Liability for capital duty - Council Directive (EEC) 69/335, arts 4, 5.

The Case

On a proper construction, the expression 'contribution of assets of any kind' in art4(1)(c) of Council Directive (EEC) 69-335 (concerning indirect taxes on the raising of capital) covered: payments made by a parent company to a capital company, which was increasing its capital by issuing new shares, to enable the acquisition of those shares by a subsidiary of that parent company; and, additional payments made by a new member not to that capital company, but to its subsidiaries, where, from an economic point of view, the real recipient was the capital company. Further, payments made subject to the fulfilment of a condition precedent were 'contributions' within the meaning of art4(1)(c) only after that condition had been fulfilled. Finally, capital duty was not a 'liability' or an 'expense' within art5(1)(a).

Practice Areas

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