Important legal notice

61989C0249

European Court reports 1991 Page I-00257

Opinion of the Advocate-General

Mr President, Members of the Court,

5. The Court has consistently held that: "according to the principles on which harmonized capital duty is based, such duty should be charged only on transactions which constitute in law the raising of capital and only in so far as they contribute to increasing the company' s economic potential". (2)

6. In my view, it is indisputable that the granting of an interest-free loan by a member is a service which contributes to "increasing the company' s economic potential" in so far as it provides it with finance for which it does not have to bear the cost, which, depending on the state of the finance market, may be quite a considerable advantage. However, the Bundesfinanzhof inquires whether this is also the case where a heavily indebted company has a negative asset position. It points out in its order for reference that in previous decisions it has made no distinction in this regard. (3) According to the Bundesfinanzhof, that case-law is, however, criticized by some German academic writers who take the view that Article 4(2)(b) of the Directive allows duty to be charged only on increases in the net assets of the company and is inapplicable where the service in question does not render the balance positive since the liabilities far exceed the assets.

7. I do not consider it necessary to follow that school of thought. As I explained in my Opinion in Case C-15/89 Deltakabel BV, the reduction of a deficit by the provision of a service, even if only a partial reduction, may increase the value of the company' s shares, even where its asset position is markedly negative and continues to be so after the provision of the service, since such a reduction increases the undertaking' s ability to become viable again and reduces the additional efforts needed to achieve a financial balance.

10. The grant of an interest-free loan may therefore be subjected to the levying of capital duty.

11. However, the Bundesfinanzhof goes on to inquire as to the way in which the duty is to be calculated. According to Article 5(1)(d) of the Directive, "in the case of an increase in the assets, as referred to in Article 4(2)(b)", the duty is to be charged "on the actual value of the services provided, after deduction of the liabilities assumed and the expenses borne by the company as a result of the provision of such services". In the specific case of the grant of an interest-free loan, the value of the service is, in my view, the saving of interest made by the company. The rate of interest in force on the corporate finance market at the time when the loan is granted is undoubtedly to be taken into account since it determines the sum which the recipient company would have had to pay if it had been obliged to obtain finance on the market.

12. I therefore propose that the Court should rule:

(1) Article 4(2)(b) of Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital allows the Member States to subject to capital duty the grant to a capital company of interest-free loans by its members, even if the grant of such loans does not have the effect of completely clearing the liabilities of the company.

(2) In application of Article 5(1)(d) of the Directive, the amount of capital duty must be calculated on the basis of the amount of interest thus saved at the market rate applicable when the loans were granted, less any expenses borne by the company arising from those loans.

(*) Original language: French.

(1) OJ, English Special Edition 1969 (II), p. 412.

(2) Judgment in Case 270/81 Felicitas Rickmers-Linie KG & Co. v Finanzamt fuer Verkehrsteuern [1982] ECR 2771; see also the judgment in Case 36/86 Ministeriet for Skatter og Afgifter v Investeringsforeningen Dansk Sparinvest [1988] ECR 409, paragraphs 13 and 14.

(3) Judgment of 12 April 1972, II 37/63, BFHE 106, 123, BStBl. II 1972, 714; judgment of 31 January 1979, II R 46/77, BFHE 127, 227, BStBl. II 1979, 382; judgment of 11 July 1984, II R 87/82, BFHE 141, 569, BStBl. II 1984, 840.

(4) Judgment of 28 March 1990 in Case C-38/88 Waldrich Siegen Werkzeugmaschinen GmbH v Finanzamt Hagen [1990] ECR I-1447.

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