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OPINION OF ADVOCATE GENERAL

MAZÁK

delivered on 25 June 2009 ¹(1)

Case C-47/08

Gaz de France Berliner Investissement SA

Bundeszentralamt für Steuern

(Reference for a preliminary ruling from the Finanzgericht Köln (Germany))

(Freedom of establishment Scope of Directive 90/435/EEC Concept of 'company of a Member State' 'Société par actions simplifiée' under French law)

The questions referred for a preliminary ruling by the Finanzgericht Köln (Germany) once again draw the attention of the Court to Council Directive 90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States. (2)

This time it is a matter of the interpretation of Article 2(a) of Directive 90/435 in conjunction with the annex to that directive and, depending on the answer given to the first question, the possible non-conformity of that directive with primary Community law.

I Legal background

A Community law

Directive 90/435

Article 2 of Directive 90/435 provides that for the purposes of that directive 'company of a Member State' means any company which fulfils each of three cumulative conditions. First, the company must take one of the forms listed in the annex to Directive 90/435. Second, the company must be considered under the tax laws of a Member State to be resident in that State for tax purposes and must not be considered, under the terms of a double taxation agreement concluded with a non-member country, to be resident for tax purposes outside the European Community. Third, the company must, without the possibility of an option or of being exempt, be subject to one of the taxes listed in Article 2(1)(c) of Directive 90/435 or to any other tax which may be substituted for any of those taxes.

With regard to France, the annex to Directive 90/435, in its original version, listed in point (f) companies known as 'société anonyme', 'société en commandite par actions', 'société à responsabilité limitée' and industrial and commercial public establishments and undertakings.

Article 3(1)(a) of Directive 90/435 provides that a company of a Member State which has a minimum holding of 25% in the capital of a company of another Member State has the status of a 'parent company' for the purposes of applying that directive. Therefore, profits distributed to it by its subsidiary are, under Article 5(1) of that directive, exempt from withholding tax.

Directive 2003/123/EC

Article 1(6) of Council Directive 2003/123/EC of 22 December 2003 amending Directive 90/435 (3) replaced the annex to Directive 90/435 with the text in the annex to Directive 2003/123. Following that amendment, point (f) (4) of that annex concerning the French Republic reads as follows:

'companies under French law known as 'société anonyme', 'société en commandite par actions', 'société à responsabilité limitée', 'sociétés par actions simplifiées', 'sociétés d'assurances mutuelles', 'caisses d'épargne et de prévoyance', 'sociétés civiles' which are automatically subject to corporation tax, 'cooperatives', 'unions de cooperatives', industrial and commercial public establishments and undertakings, and other companies constituted under French law subject to French corporate tax'.

Recital 4 in the preamble to Directive 2003/123, in connection with that amendment to Directive 90/435, reads:

'Article 2 of Directive 90/435/EEC defines the companies falling within its scope. The Annex contains a list of companies to which the Directive applies. Certain forms of companies are not included in the list in the Annex, even though they are resident for tax purposes in a Member State and are subject to corporation tax there. The scope of Directive 90/435/EEC should therefore be extended to other entities which can carry out cross-border activities in the Community and which meet all the conditions laid down in that Directive.'

Under Article 2(1) of Directive 2003/123 Member States were required to transpose that directive by 1 January 2005 at the latest.

B National legislation

Law on Income Tax

Paragraph 44d of the Law on Income Tax in the version applicable to the facts in the main proceedings ('EStG 1999') contains the following provisions:

'(1) On application, investment income tax shall not be charged on investment income ... accruing to a parent company where neither that company's registered office nor its administration is located in the national territory, and deriving from the distribution of the profits of a capital company with unlimited liability to tax within the meaning of Paragraph 1(1)(1) of the Law on Corporation Tax, or from the refunding of corporation tax.

(2) A parent company within the meaning of subparagraph 1 is a company which meets the conditions laid down in Article 2 of Directive 90/435, set out in Annex 7 to this law, and which, at the time when, in accordance with Paragraph 44(1), second sentence, the investment income tax becomes payable, can prove that it has a direct shareholding of at least 25% in the nominal capital of the capital company with unlimited liability to tax. It must also be shown that that shareholding has been maintained for an uninterrupted period of 12 months.'

The annex to the EStG 1999 reiterates the content of Article 2 of, and the annex to, Directive 90/435.

II Facts

Gaz de France Berliner Investissement SA ('the claimant in the main proceedings'), a company established in France, was, until 2002, a company with the legal form of a 'société par actions simplifiée' (SAS). (5) Since 2002 it has become a 'société anonyme' (SA). It is the sole shareholder in Gaz de France Deutschland GmbH ('G-GmbH'), a company with its registered office in Berlin (Germany).

In 1999 G-GmbH distributed profits to the claimant in the main proceedings. From that profit distribution G-GmbH retained tax at source corresponding to investment income tax and the solidarity surcharge, and paid those amounts retained to the competent tax office.

The claimant in the main proceedings subsequently applied to the Bundesamt für Finanzen (Federal Finance Office, BfF') (6) for a reimbursement of the retained investment tax and the solidarity surcharge.

The reimbursement application was refused by a decision of the BfF of 6 September 1999 on the grounds that the claimant in the main proceedings was not a parent company within the meaning of Paragraph 44d(2) of the EStG 1999 in conjunction with Article 2 of Directive 90/435, since the legal form of an SAS was not mentioned in the list of companies falling within Article 2(a) of Directive 90/435, and the list of forms of companies in that provision is exhaustive.

The administrative appeal lodged by the claimant in the main proceedings against that decision of the BfF was dismissed as unfounded by decision of the BfF of 27 May 2002.

Arguing that the SAS was simply a sub-category of the SA and that it thus fell within the provisions of Article 2(a) in conjunction with point (f) of the annex to Directive 90/435 even though it was not expressly listed in that annex, the claimant in the main proceedings brought an action before the Finanzgericht Köln against the decision of the BfF of 27 May 2002.

III Questions referred for a preliminary ruling and procedure before the Court

The Finanzgericht Köln decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling under Article 234 EC:

'(1) Must Article 2(a) in conjunction with point (f) of the annex to Directive 90/435 be interpreted as meaning that for the purposes of the directive a French company taking the legal form of a 'société par actions simplifiée' may be regarded even for the years prior to 2005 as a 'company of a Member State' with the result that in respect of a profit distribution effected by its Germany subsidiary in 1999 the former company is entitled to an exemption from withholding tax in accordance with Article 5(1) of Directive 90/435?

(2) In the event that Question 1 is answered in the negative:

Does Article 2(a) in conjunction with point (f) of the annex to Directive 90/435 infringe Articles 43 EC and 48 EC or Article 56(1) EC and Article 58(1)(a) and (3) EC in that, together with Article 5(1) of that directive, in the event of a profit distribution by a German subsidiary it lays down an exemption from withholding tax for French parent companies taking the legal form of a 'société anonyme', 'société en commandite par actions' or 'société à responsabilité limitée', but not for French parent companies taking the legal form of a 'société par actions simplifiée'?'

Written observations were lodged by the claimant in the main proceedings, by the German, Italian and United Kingdom Governments and by the Commission.

The claimant in the main proceedings, the German and United Kingdom Governments and the Commission were represented at the hearing, which took place on 30 April 2009.

IV Legal analysis

A Admissibility of the reference for a preliminary ruling

The Italian Government contends that the reference for a preliminary ruling may be inadmissible on the grounds that the Court does not have the information it requires in order to assess what relevance the reference has to resolving the dispute in the main proceedings. The questions referred for a preliminary ruling are based on the initial hypothesis that the SAS has characteristics that are the same as those of companies governed by French law which have always been granted exemption from withholding tax on dividends under Article 5(1) of Directive 90/435. However, the national court does not give any legal or factual information regarding the structure or legal regime of an SAS or of the other types of companies with which it is compared.

In that regard, it should be observed that the Court has consistently held that where the questions submitted by the national court concern the interpretation of Community law, the Court is in principle bound to give a ruling. (7) It can refuse to rule on a question referred only in exceptional cases, in particular where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it. (8)

I do not consider that that is the situation in the present case. As I have already mentioned in point 2 of this Opinion, the questions referred concern the interpretation of Article 2(a) of Directive 90/435 in conjunction with the annex to that directive. The Court has sufficient factual and legal material to do this. The comparison made by the Italian Government between the SAS and the other types of company governed by French law which have always been granted exemption from withholding tax on dividends under Article 5(1) of Directive 90/435 presupposes an interpretation of national law which it is not for the Court to give.

It follows from the foregoing that the reference for a preliminary ruling is admissible.

B First question referred for a preliminary ruling

By this question, the national court is seeking a ruling on whether an SAS, which was introduced into French law only in 1994, may be considered to be a 'company of a Member State' within the meaning of Article 2(a) of Directive 90/435 even if, at the material time in the main proceedings, in 1999, it was not expressly listed in point (f) of the annex to Directive 90/435.

The German, Italian and United Kingdom Governments consider that the question calls for a negative answer. All three governments start in principle from the hypothesis that, in accordance with the general principle of legal certainty, the list of companies in the annex to Directive 90/435 is exhaustive.

On the other hand, the claimant in the main proceedings and the Commission suggest that the Court should answer the first question in the affirmative. They are both of the view that an affirmative answer is not possible according to a purely literal interpretation of Directive 90/435. However, the purpose, objectives and general scheme of Directive 90/435 would indicate an interpretation whereby an SAS does fall within the scope of that directive.

Assessment

In order to be entitled to an exemption from withholding tax on profits distributed by a subsidiary to its parent company, within the meaning of Article 5 of Directive 90/435, companies must fulfil the three cumulative conditions set out in Article 2 of that directive. In the present case, it is the condition relating to taking one of the forms listed in the annex to Directive 90/435 that is at issue.

It is undeniable that the legal form of the SAS is not one of the legal forms listed with regard to the French Republic in the original version of the annex to Directive 90/435, since it was not introduced into French company law until 1994. It is also undeniable that that legal form of company was expressly introduced into the text of that annex by Directive 2003/123. The question arises whether, despite those facts, it is possible, by means of an interpretation of Article 2(a) of Directive 90/435 in conjunction with point (f) of the annex to that directive, to reach the conclusion that an SAS also falls within the scope of that directive in its original version.

A purely literal interpretation of Directive 90/435 would result in a negative answer. However, it is clear from the case-law of the Court that a literal interpretation is not sufficient. To answer the question referred by the national court, it is necessary to take account both of the wording of the provision on which a ruling on interpretation is sought, and the objectives and the scheme of the directive. (9)

Relying on the preamble to Directive 90/435, the Court has described the objectives of that directive on several occasions. It has stated that, as is apparent in particular from the third recital in the preamble, Directive 90/435 seeks to eliminate, by the introduction of a common system, any penalisation of cooperation between companies of different Member States as compared with cooperation between companies of the same Member State and to facilitate thereby the grouping together of companies at Community level. (10)

However, Directive 90/435 does not seek to introduce that common system for all companies of the Member States. In that regard, Article 2 of Directive 90/435 provides a sort of filter. The Commission explains in its observations the aim of having that filter. In its view, the purpose of Article 2(a) of Directive 90/435 in conjunction with point (f) of the annex to that directive in its original version is to exclude partnerships from its scope.

One may question the appropriateness of the legislative technique of listing specific legal forms of company of the different Member States, a technique which was adopted by the drafters of Directive 90/435 in order to achieve the abovementioned objective, even if those drafters chose that legislative technique of lists in order to prevent any difference of interpretation of the terms 'capital company' and 'partnership' in the different Member States.

Indeed, the legislative technique of lists does not give a sufficiently forward-looking dimension to the Community legislation. By not allowing Community legislation to adapt to changes in national legislation it does not cater sufficiently for the future. That legislative technique fails to take into account the fact that the domestic legal system of individual Member States is a phenomenon that is continually changing.

That imperfection in the legislative technique of lists that was used in Directive 90/435 cannot, to my mind, be overcome by means of interpretation or even by analogy. Thus, every change in the relevant rules of national law must be accompanied by a change in the Community rules. If it were otherwise it would, in my view, amount to replacing the legislative procedure by methods of interpretation.

It appears that the drafters of Directive 90/435 realised the limits of the legislative technique of lists that had been used, because when Directive 90/435 was updated by Directive 2003/123 not only new legal forms of company but also the words 'and other companies constituted under French law subject to French corporate tax' (11) were added to point (f) of the annex to Directive 90/435, and so it will be possible in future to avoid difficulties like those that have arisen in connection with the SAS in the case in the main proceedings.

The Commission proposal from which Directive 2003/123 originated (12) might also prove useful in answering the first question. In paragraph 12 of the explanatory memorandum of that proposal the Commission states that Directive 90/435 applies only to those companies included in the list annexed to the directive. It is apparent from paragraph 13 of the explanatory memorandum of that proposal that the aim of the proposal for a directive amending Directive 90/435 is to improve the coverage of Directive 90/435 by adding to the list of entities annexed to the directive, and thus to include new named legal forms.

In their arguments the claimant in the main proceedings and the Commission stressed the fact that the SAS was created in French law in the likeness of the SA, a form of company that has always been included in the annex to Directive 90/435, and so the SAS is a particular type of SA. In that regard I do not consider it is for the Court to rule on this point, since that would involve an interpretation of national legislation. However, it may be appropriate to note that French academic lawyers themselves consider that: '... the new form of company appears not to be covered by Community legislation strictly relating to companies the numbered directives since that legislation does not relate to 'sociétés par actions' (share companies) in general, only to 'sociétés anonymes' (public limited companies) and 'sociétés en commandite par actions' (limited partnerships with share capital). If the new form of company is indeed, as its name suggests, a share company it is neither a 'société anonyme' (public limited company) nor a 'commandite' (limited partnership)'. (13)

In the light of the foregoing, I consider that the answer the Court should give to the first question is that Article 2(a) of Directive 90/435 in conjunction with point (f) of the annex to that directive must be interpreted as meaning that a 'company of a Member State' for the purposes of that directive may only be a company taking one of the legal forms expressly listed in point (f) of the annex to Directive 90/435.

C Second question referred for a preliminary ruling

The second question, which was raised in case the Court should answer the first question in the negative, concerns the national court's doubts as to whether Article 2(a) of Directive 90/435 in conjunction with point (f) of the annex to that directive complies with Articles 43 EC and 48 EC or with Article 56(1) EC, Article 58(1)(a) EC and Article 3 EC if, in conjunction with Article 5(1) of Directive 90/435, that Article 2(a) establishes, in the event of a profit distribution by a German subsidiary, an exemption from withholding tax for French parent companies taking the legal form of an SA, a 'société en commandite par actions' or a 'société à responsabilité limitée', but not for French parent companies taking the legal form of an SAS.

Of those who submitted observations, only the claimant in the main proceedings considers that the second question should be answered in the affirmative. It argues that Article 2(a) of Directive 90/435 in conjunction with point (f) of the annex to that directive infringes freedom of establishment. In its view, exclusion of the SAS from the scope of Directive 90/435 amounts to arbitrarily placing the SAS at a disadvantage as compared to the SA and the 'société à responsabilité limitée' (limited liability company), or as compared with the legal forms of share company or limited liability company of other Member States listed in that directive.

The German, Italian and United Kingdom Governments and the Commission agree in considering that the answer to the second question should be in the negative. However, their opinions differ over which provisions of the EC Treaty are relevant in this case. According to the German and United Kingdom Governments, Directive 90/435 should be examined with regard to freedom of establishment, and hence with regard to Articles 43 EC and 48 EC. The Italian Government on the other hand considers that only Article 56 EC concerning free movement of capital appears to be relevant. The Commission, for its part, bases its assessment both on freedom of establishment and on free movement of capital.

Assessment

It should be observed first of all that the second question seeks an assessment of Article 2(a) of Directive 90/435 in conjunction with point (f) of the annex to that directive in the light of the relevant Treaty provisions and not, as the claimant in the main proceedings maintains, an examination of the situation in Germany with regard to exemption from withholding tax on dividends distributed by a German company to parent companies established in another Member State which do not fall within the scope of Directive 90/435. Regardless of that, I consider it necessary to point out that it follows from the case-law of the Court that Article 43 EC and Article 48 EC preclude national legislation which constitutes discrimination in relation to a non-resident parent company, (14) irrespective of whether the parent company falls within the scope of Directive 90/435. It is, however, for the national court to establish whether that is so in the present case.

As regards the relevant Treaty provisions in the light of which Article 2(a) of Directive 90/435 in conjunction with point (f) of the annex to that directive is to be examined, I share the view of the German and United Kingdom Governments that the provisions at issue of that article and of that annex should be assessed only in the light of Articles 43 EC and 48 EC.

It is true that exemption from withholding tax on dividends distributed by a subsidiary to a parent company also has effects on free movement of capital, although the decisive criterion in determining the relevant Treaty provisions is, according to case-law, (15) the existence of a shareholding which gives the parent company definite influence over its subsidiary's decisions and allows it to determine that company's activities. The Court has held that a provision which presupposes that a parent company holds a minimum of 25% of the capital of the subsidiary, as is the case of Directive 90/435, falls within the scope of freedom of establishment. (16)

It is clear from the case-law of the Court that freedom of establishment aims to guarantee the benefit of national treatment in the host Member State, by prohibiting any discrimination based on the place in which companies have their seat. (17)

There is no doubt that Directive 90/435 in its original version reserves advantages to specific types of company which have a certain legal form. That fact alone does not mean, however, that Directive 90/435 precludes Member States from granting national treatment to non-resident parent companies which do not fall within the scope of Directive 90/435. On the contrary, it is clear from the case-law of the Court already referred to in point 42 of this Opinion that if the national legislation provides for exemption from withholding tax on dividends distributed by a German company to resident parent companies it should also make similar provision in respect of dividends distributed by a German company to non-resident parent companies.

In addition, it is clear that it is not possible to speak of discrimination based on the place in which companies have their seat if Directive 90/435, in its original version, in the event of a profit distribution by a German subsidiary establishes an exemption from withholding tax for French parent companies taking the legal form of an SA, a 'société en commandite par actions' or a 'société à responsabilité limitée', but does not establish a similar exemption for French parent companies taking the legal form of an SAS.

In the light of the foregoing, I consider that the answer the Court should give to the second question is that Article 2(a) of Directive 90/435 in conjunction with point (f) of the annex to that directive does not infringe Articles 43 EC and 48 EC by establishing, in the event of a profit distribution by a subsidiary, an exemption from withholding tax for a French parent company taking one of the legal forms expressly listed in point (f) of the annex to that directive.

V Conclusion

In the light of all the above considerations, I suggest that the Court should answer the questions referred by the Finanzgericht Köln as follows:

(1) Article 2(a) of Council Directive 90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States in conjunction with point (f) of the annex to that directive must be interpreted as meaning that a 'company of a Member State' for the purposes of that directive may only be a company taking one of the legal forms expressly listed in point (f) of the annex to that directive.

(2) Article 2(a) of Directive 90/435 in conjunction with point (f) of the annex to that directive does not infringe Articles 43 EC and 48 EC by establishing, in the event of a profit distribution by a subsidiary, an exemption from withholding tax for a French parent company taking one of the legal forms expressly listed in point (f) of the annex to that directive.

1 Original language: French.

2 OJ 1990 L 225, p. 6.

3 OJ 2003 L 7, p. 41.

4 Following the amendment of Directive 90/435 by Council Directive 2006/98/EC of 20 November 2006 (OJ 2006 L 363, p. 129), the list is in point (j) of the annex.

5 The legal form of an SAS was not introduced into French company law until 1994.

6 Since 1 January 2006, the 'Bundeszentralamt für Steuern'.

7 See recent Case C-544/07 Rüffler [2009] ECR I-0000, paragraph 36 and the case-law cited.

8 See Case C-545/07 Apis-Hristovich [2009] ECR I-0000, paragraph 30, and Rüffler, cited in footnote 7, paragraph 38.

9 See Case C-27/07 Banque Fédérative du Crédit Mutuel [2008] ECR I-2067, paragraph 22 and the case-law cited.

10 See Case C-48/07 Les Vergers du Vieux Tauves [2008] ECR I-0000, paragraph 36 and the case-law cited.

11 Similar amendments were also made in respect of Belgium and the Netherlands.

12 Proposal for a Council directive of 29 July 2003 amending Directive 90/435, COM(2003) 462 final.

13 Guyon, Y., 'La société par actions simplifiée et le droit communautaire', Société par actions simplifiée, Paris, 1994, p. 147 (unofficial translation).

14 See Case C-170/05 Denkavit Internationaal and Denkavit France [2006] ECR I-11949.

15 See Case C-284/06 Burda [2008] ECR I-4571, paragraph 69 and the case-law cited.

16 See order of 10 May 2007 in Case C-92/04 Lasertec [2007] ECR I-3775, paragraphs 20 to 26.

17 See Case C-282/07 Truck Center [2008] ECR I-0000, paragraph 32 and the case-law cited.