Judgment of the Court (Second Chamber) of 3 September 2014

Data

Court: Court of Justice

Case date: 3 september 2014

Verdict

Judgment of the Court (Second Chamber) of 3 September 2014 –

Commission v Spain

(Case C‑127/12)^(*)

"Failure of a Member State to fulfil obligations - Free movement of capital - Articles 21 TFEU and 63 TFEU - EEA Agreement - Articles 28 and 40 - Taxation of successions and donations - Distribution of powers of taxation - Discrimination as between residents and non-residents - Discrimination according to where the immovable property is situated - Burden of proof"

Actions for failure to fulfil obligationsSubject-matter of the disputeDetermination during the pre-litigation procedureSubsequent enlargementNot permissibleClarification of complaintsLawfulnessInsertion of examples in the reasoned opinionLawfulnessConditions (Art. 258 TFEU) (see paras 23, 24, 26)

Judicial proceedingsApplication initiating proceedingsFormal requirementsIdentification of the subject-matter of the disputeBrief summary of the pleas in law on which the application is basedUnambiguous wording of the form of order sought by the applicant (Art. 258 TFEU) (see para. 28)

Free movement of capital and liberalisation of paymentsLiberalisation of capital movementsDirective 88/361ScopeInheritance taxIncluded (Art. 63(1) TFEU; Council Directive 88/361, Annex I) (see paras 52, 53)

Free movement of capital and liberalisation of paymentsRestrictionsTax legislationTax on successions and donationsNational legislation authorising the Autonomous Communities to provide for tax relief which applies only where there is a link to the territory of those communitiesDiscrimination as between residents and non-residentsDiscrimination on the basis of where the immovable property is situatedUnlawfulNo justification (Arts 63 TFEU and 65 TFEU) (see paras 57, 58, 66, 67, 69-73, 78, 79, 84, operative part)

International agreementsAgreement establishing the European Economic AreaFree movement of capitalRestrictionsTax legislationNational legislation authorising the Autonomous Communities to provide for tax relief which applies only where there is a link to the territory of those communitiesDiscrimination as between residents and non-residentsDiscrimination on the basis of where the immovable property is situatedUnlawfulJustificationNo combating of tax avoidance (EEA Agreement, Art. 40) (see paras 80-84, operative part)

Operative part

The Court:

declares that, by applying different tax treatment to donations and successions between beneficiaries and donees resident in Spain and those not resident in Spain, between bequeathers resident in Spain and those not resident in Spain, and between donations and similar transfers of immovable property situated within and outside of Spain, the Kingdom of Spain has failed to fulfil its obligations under Article 63 TFEU and Article 40 of the Agreement on the European Economic Area of 2 May 1992;

dismisses the action as to the remainder;

orders the Kingdom of Spain to pay the costs.