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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Schmid (Free movement of capital) [2002] EUECJ C-516/99 (30 May 2002) URL: http://www.bailii.org/eu/cases/EUECJ/2002/C51699.html Cite as: [2002] EUECJ C-516/99, [2002] ECR I-4573 |
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JUDGMENT OF THE COURT (Fifth Chamber)
30 May 2002 (1)
(Concept of court or tribunal of a Member State within the meaning of Article 234 EC - Lack of jurisdiction of the Court of Justice)
In Case C-516/99,
REFERENCE to the Court under Article 234 EC by the Berufungssenat V der Finanzlandesdirektion für Wien, Niederösterreich und Burgenland (Austria) for a preliminary ruling in the proceedings brought by
Walter Schmid
on the interpretation of Articles 73b and 73d of the EC Treaty (now Articles 56 EC and 58 EC),
THE COURT (Fifth Chamber),
composed of: P. Jann, President of the Chamber, S. von Bahr, D.A.O. Edward, M. Wathelet (Rapporteur) and C.W.A. Timmermans, Judges,
Advocate General: A. Tizzano,
Registrar: R. Grass,
after considering the written observations submitted on behalf of:
- the Austrian Government, by H. Dossi, acting as Agent,
- the French Government, by K. Rispal-Bellanger and S. Seam, acting as Agents,
- the Commission of the European Communities, by E. Traversa and K. Gross, acting as Agents,
having regard to the report of the Judge-Rapporteur,
after hearing the Opinion of the Advocate General at the sitting on 29 January 2002,
gives the following
The relevant national legislation
(1) In the case of domestic revenue from capital assets (subparagraph 2) ... income tax shall be levied by deduction from revenue from capital assets (Kapitalertragsteuer - tax on revenue from capital assets).
(2) Domestic revenue from capital assets exists where the person liable to pay revenue from capital assets has its residence, head office or seat in Austria or is the branch office in Austria of a credit institution and the revenue from capital assets consists of:
1.(a) shares of profits (dividends), interest and other earnings from shares, shares in limited liability companies ....
(1) For natural persons and corporations, in so far as corporations receive revenue from capital assets, income tax (corporation tax) on revenue from capital assets in accordance with Paragraph 93(2)(3) ... which is subject to tax on revenue from capital assets shall be treated as paid by the withholding of tax. For natural persons, that rule shall apply also to revenue from capital assets, in accordance with Paragraph 93(2)(1) ...
(2) For natural persons and corporations, in so far as corporations receive revenue from capital assets, income tax (corporation tax) on domestic revenue from capital assets in the form of bonds not subject to tax on revenue from capital assets shall be treated as paid by voluntary payment of an amount equivalent to the tax on revenue from capital assets to the coupon-issuing authority. ...
(3) In so far as the tax is paid under subparagraph 1 or 2, the revenue from capital assets shall not be taken into account in the aggregate amount of revenue or income (Paragraph 2(2)). That rule shall apply only when calculating the income tax of the taxpayer.
....
(1) The tax rate shall be reduced in respect of:
- revenue from shareholdings (subparagraph 4),
...
to half of the average tax rate applicable to the aggregate income ...
(4) Revenue from shareholdings shall mean:
1. share income:
(a) shares of profits of any kind from shareholdings in domestic limited companies or industrial and provident societies in the form of shares in companies or cooperatives ...
....
The main proceedings and the questions referred for a preliminary ruling
(1) Does Article 73b(1) in conjunction with Article 73d(1)(a) and (b) and (3) of the EC Treaty (now Article 56(1) in conjunction with Article 58(1)(a) and (b) and (3) EC) preclude a provision such as Paragraph 97 of the Einkommensteuergesetz (EStG; Law on Income Tax) of 1988 (BGBl. 1988/400; as amended, BGBl. 1996/797), which provides (pursuant to Paragraph 1(1)(1)(c) of the Endbesteuerungsgesetz (Law on Final Taxation), BGBl. 1993/11) that final taxation of dividends, interest and other earnings from foreign shares is excluded, and thus the rate of taxation in respect of domestic shares is 25%, whereas the rate of taxation in respect of foreign shares may be up to 50%?
(2) Does Article 73b(1) in conjunction with Article 73d(1)(a) and (b) and (3) of the EC Treaty (now Article 56(1) in conjunction with Article 58(1)(a) and (b) and (3) EC) preclude a provision such as Paragraph 37(1) and (4) of the EStG of 1988 (BGBl. 1988/400), which provides that shares of profits of any kind from shareholdings in domestic limited companies in the form of shares are subject to a tax rate reduced to half of the average tax rate applicable to the aggregate income, but that shares of profits of any kind from shareholdings in limited companies whose seat and place of management are in another EU Member State or a non-Member State are not subject to any reduction of that kind?
The jurisdiction of the Court
National legislation on the appeal chambers of regional finance authorities
Observations submitted to the Court
Findings of the Court
Costs
45. The costs incurred by the Austrian and French Governments and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the Fifth Appeal Chamber, the decision on costs is a matter for that chamber.
On those grounds,
THE COURT (Fifth Chamber)
hereby rules:
The Court of Justice of the European Communities has no jurisdiction to answer the questions referred by the Berufungssenat V der Finanzlandesdirektion für Wien, Niederösterreich und Burgenland, by order of 2 December 1999.
Jann
WatheletTimmermans
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Delivered in open court in Luxembourg on 30 May 2002.
R. Grass P. Jann
Registrar President of the Fifth Chamber
1: Language of the case: German.