Cases

Question 1

Leur Bloem

Answer 1

• The court had jurisdiction here, despite a fully domestic case, because the Netherlands had over-transformed the directive. They added another criterion, but this was not allowed under the Merger directive. Tax authorities should investigate all the facts in each particular case to check whether there is abuse. The refusal here was not proportionality because it went further than is necessary for preventing such tax evasion or avoidance.

Question 2

Holböck

Answer 2

• Article 64(2) provides for an exception that MS can restrict the free movement of capital wrt third countries if they already have legislation. Amendments that did not change the legal framework still existed on 31 December 1993. So no violation of freedom of capital here.

Question 3

Turpeinen

Answer 3

Article 21 has subsidiary effect: you can only rely on it if none of the other articles apply. Mutatis mutandis application of the Schumacker conditions because she is in the same situation wrt her pension income.

Question 4

Verkooijen

Answer 4

• Savings plan: he did not get the exemption on dividends, while he would have if it were shares of a company in the Netherlands = where he was a resident. That constitutes a restriction on free movement of capital that could not be justified in casu. Free movement of capital also protects from restrictions of the home state.

Question 5

Danish cases

Answer 5

• Fundamental case about abuse of rights: here about interest and royalties Directive: there is a principle that abusive practices are prohibited which applies irrespective of whether the rights and advantages that are abused have their basis in the treaties, in a regulation or in a directive. A MS can rely on it and deny an exemption, even if there are no domestic or agreement-based provisions providing for such refusal.

Question 6

Statens Kontrol

Answer 6

Neutrality principle of internal taxation: art. 110 also applies to export situations (teleological interpretation by the court). Fully fledged second prohibition developed by case law.

Question 7

Marks & Spencer

Answer 7

• About the group relief and losses of a non-UK subsidiary. UK has to accept these losses if they are final. First time of the proportionality test! Freedom of establishment also prohibits MS of origin from hindering establishment in another MS.

Question 8

Alfhons Lutticke

Answer 8

Establishes that art. 34-35 and art. 110 TFEU are mutually exclusive and cannot be applied at the same time. Article 110(1) has direct effect.

Question 9

Case Marks & Spencer (2002)

Answer 9

• UK was not allowed to retroactively change the period within which repayment may be sought of sums paid by way of VAT collected in breach of provisions. This is in breach of the principle of effectiveness and the protection of legitimate expectations.

Question 10

Musicologia

Answer 10

• Check the nomenclature of the directive to see whether it is a “movement of capital”. Art. 65 is an exception to the freedom so it must be interpreted narrowly. A distinction made is not automatically compatible with the treaty → it should not be discriminatory + proportionality test. Here, there was a restriction of freedom to capital that was not justified.

Question 11

Commission v. France

Answer 11

Article 34: paper publishing = discriminatory here and a measure having equivalent effect because it hinders free movement of goods here. Protectionist so no justification given by French government.

Question 12

Terhoeve

Answer 12

Direct effect of freedom of workers to rely on it where he is a national (here the Netherlands): case concerned social security contributions. Cross border worker is entitled to same treatment than a non-cross border worker.

Question 13

Tsapalos

Answer 13

The Italian authorities were entitled to go back in time and still rely on this directive after the accession of Greece to the European communities and then go further back in time and ask for the realisation of this tax claim or customs duties disclaim which actually dates back to 1968.

Question 14

Bachmann

Answer 14

Rule of reason for art. 45. Cohesion of the tax system was accepted as a reason to infringe on the free movement of workers.

Question 15

Case “A”

Answer 15

• Article 63(1) applies in the same way for freedom of capital between MS and with third countries. However, there is a difference in legal tradition and therefore, justifications that might not work between MS might work with third countries: eg. effectiveness of fiscal supervision.

Question 16

Vestegaard

Answer 16

• Training course in Greece. Under art. 56 TFEU it is not allowed to have a presumption that professional training courses held in ordinary tourist resorts located in other MS include such a significant tourist element, that the casts cannot be treated as deductible operating costs, if you do not have the same presumption for domestic tourist restorts.

Question 17

Bilimportorer

Answer 17

You cannot rely on art. 110(1) if there are no similar domestic goods. You cannot rely on art. 110(2) if there is no competing domestic goods. This was the case here, as Denmark did not produce any cars.

Question 18

Test Claimants FII Group Litigation

Answer 18

• Difference on when you should apply art. 49 (freedom of establishment) and art. 63 (freedom of capital) → look at the purpose of the domestic legislation. For the neutral rule: difference between EU MS (look at the concrete facts) and third countries (because art. 49 does not apply to third countries).

Question 19

Denkavit

Answer 19

Case about the Parent-Subsidiary Directive: you can also scramble together the 2 year period after the dividend distribution = the MS cannot extend the condition to have it when you distribute the dividend. The Parent Subsidiary has direct effect.

Question 20

Commerzbank

Answer 20

Case about interest paid back with a tax rebate, there was no such interest being paid to non-resident companies = discriminatory. The fact that the company would have been exempt from tax if they had been a resident is of no relevance.

Question 21

De Groot case

Answer 21

He worked in 4 MS. The Netherlands refused to take the family and personal circumstances fully into account, only allowing proportional. This is not allowed under free movement of workers, as this deters workers from working abroad.

Question 22

Commission v. Denmark

Answer 22

Concept of similarity of art. 110(1) requires flexibility (court moves away from Fink-Frucht). But it is still a narrow concept. Art. 110(2) is a catching clause if the similarity is unclear.

Question 23

Case Gilly

Answer 23

Discrimination is not the same as disparities between different legal systems: here, she had to pay higher taxes in Germany but no discrimination.

Question 24

Finck Frucht

Answer 24

You cannot rely on art. 110(1) if there are no similar domestic goods: for art. 110(1), you have to look for similarity. Art. 110(2) is a rule against protectionism. Here, you look for competing products (competition law thinking).

Question 25

Humblet

Answer 25

EU MS was not allowed to tax a EU official and thus they could not take the salary in account → had to give tax exemption without progression.

Question 26

Cadburry Schweppes

Answer 26

• Abusive situations concerning the CFC-rules. It is up to the company to show that there is real economic activity. Objective and subjective element needed for abusive situations. Prevention of tax avoidance = justification of the public interest, but you still need proportionality.

Question 27

Case Centros

Answer 27

• Danish couple wanted to set up a UK company (because of minimum capital rules) and a branch in Denmark → not abusive and they were allowed based on freedom of establishment. You can use the domestic legislation of another MS = objective disparity.

Question 28

Schumacker

Answer 28

Court extends art. 45(2) non-discrimination rule to also forbid indirect discriminations. In the field of direct taxation: residents and non-residents are usually not comparable. Exception: virtual residents = earn all their income in the host MS. Now only applies to family and personal circumstances!

Question 29

Commission v. Belgium

Answer 29

No violation of art. 110(2) if a MS can show that there is no protectionist effect (through statistics). The comparability of wine and beer.

Question 30

Wielockx

Answer 30

• The Netherlands had broken up the coherence principle by themselves because they had given away the taxing rights away, therefore they could not justify the indirect discrimination of the deductability of pension reserve. Wielockx = partner in physiotherapy who received his entire income and is liable to tax there.

Question 31

Van Gend en Loos

Answer 31

Landmark case for direct effect: an individual can rely on EU law directly before a national judge. Case about customs duties.