Lasteyrie-du-Saillant decision
With the Hughes de Lasteyrie du Saillant decision , the ECJ declared the taxation of hidden reserves provided for in French foreign tax law when natural persons move to other European countries to be incompatible with the freedom of establishment under Art. 43 (52 old version) of the EC Treaty .
Facts and subject of dispute
The French Code générale des impôts (CGI) provides for exit tax in its Art. 167bis . According to this, if a natural person changes residence abroad, hidden reserves that are tied up in shares are taxed. All participations of the emigrant through which he or his close relatives are entitled to receive at least 25% of the profits of a French stock corporation are recorded. However, there is the possibility of a 5-year deferral of the tax if the person leaving does not realize his profits . In addition to other procedural requirements, the deferral is dependent on the taxpayer providing sufficient security. If the taxpayer still holds his shares after the five years have elapsed, the tax is waived.
Monsieur Hughes de Lasteyrie du Saillant moved his residence from France to Belgium. He was half involved in a French company. The value of this stake was significantly higher than its acquisition cost. The French tax authorities wanted to subject the difference to the taxation according to Art. 167bis CGI.
The plaintiff objected to this because, despite the possible deferral, he saw a restriction on his freedom of establishment (and a violation of French constitutional law). The Conseil d'État referred the matter to the ECJ on December 14, 2001 for a preliminary ruling.
The decision of the ECJ
In accordance with the vote of the Advocate General, the ECJ saw the provision of Art. 167bis CGI as a violation of the freedom of establishment.
The fact that the exit tax constitutes a restriction on the freedom of establishment was not disputed. The ECJ has argued that, despite the option of deferral, the regulation has a deterrent effect on changing one's place of residence to take up gainful employment abroad. Even the imposition of the tax represents a disadvantage due to the move, the actual payment obligation does not matter.
The ECJ also saw a restriction in the requirements for granting the deferral. In particular, it means a loss of liquidity for the plaintiff if he has to provide security.
The ECJ also did not see the restriction as justified. The justifications put forward by France and four other acceding Member States were rejected.
The main point of contention was the generally recognized justification for combating abuse of law. However, the ECJ considered the measure taken in Art. 167bis CGI to be disproportionate to combat tax avoidance and to maintain the effectiveness of tax controls. There are milder means, since the taxpayer is cut off the possibility of proving the contrary. The tax authorities would have to prove in individual cases that there was an improper design. The CJEU considered it irrelevant that this proof was difficult to provide.
The ECJ also rejected the justification of the coherence of the tax system. The French legislature was evidently not concerned with taxing profits generated in France once and in full. On the one hand, profits that arose during a time spent outside France are also taxed. In addition, the crediting of a foreign tax on the capital gain leads u. U. to the fact that profits generated during the stay in France remained untaxed.
The ECJ has consistently ruled that the risk of reduced tax revenues, as presented by the French government, is not a possible justification for restrictions. The same applies to difficulties in dividing the taxable goods between several participating states.
Consequences of the judgment
As a result of the ruling, every form of exit tax within the EC is in doubt. The German foreign tax law provides z. B. § 6 also provides for the disclosure of hidden reserves when moving away.
The EU Commission has asked the Federal Republic of Germany to comment on the threat of infringement proceedings . Due to the de Lasteyrie-du-Saillant decision, § 6 AStG was changed by the SEStEG of December 7, 2006. Now the tax is deferred according to § 6 Abs. 5 AStG when moving to a member state of the EEA interest-free and without security deposit until the profit is realized through the actual sale of the shares. However, this deferral is tied to formal requirements (see Section 6, Paragraph 5, Clause 2 and Paragraph 7 AStG), so that it appears questionable whether the regulation is compatible with European law in all points. However, the Federal Fiscal Court decided in proceedings for interim legal protection that the new regulation was obviously in conformity with Community law. The Federal Fiscal Court later confirmed this view.
Web links
Individual evidence
- ↑ ECJ, judgment of March 11, 2004 ( Memento of the original of September 23, 2005 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , Az. C-9/02.
- ↑ Commission calls on Germany to abolish exit taxation .
- ↑ BFH, decision of September 23, 2008 ( page no longer available , search in web archives ) Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. , Az. I B 92/08, full text = DStR 2008, 2154.
- ↑ BFH, judgment of August 25, 2009 , Az. I R 88, 89/07, DStR 2009, 2295.
