15.10.2011

EN

Official Journal of the European Union

C 305/4

(Case C-387/11)

2011/C 305/04

Language of the case: French

Parties

Applicant: European Commission (represented by: W. Mölls and C. Soulay, Agents)

Defendant: Kingdom of Belgium

Form of order sought

—Declare that, by maintaining different rules for the taxation of income from capital and immovable property earned by Belgian investment companies and the taxation of income from capital and immovable property earned by foreign investment companies, the Kingdom of Belgium has failed to fulfil its obligations under Articles 49 and 63 of the Treaty on the Functioning of the European Union and Articles 31 and 40 of the European Economic Area Agreement;

—order the Kingdom of Belgium to pay the costs.

Pleas in law and main arguments

By the present action, the Commission criticises the different treatment of resident investment companies and non-resident investment companies as regards taxation of revenue from capital and immovable property. Unlike resident investment companies, non-resident investment companies which do not have a fixed establishment in the national territory are not permitted to recover the amount paid by way of withholding tax on income from capital and immovable property. That discrimination is incompatible with the provisions of the Treaty on freedom of establishment, inasmuch as it makes the founding of non-resident investment companies less attractive, and with the provisions of the Treaty on free movement of capital, inasmuch as the financing of a Belgian company by a foreign investment company is more costly than financing through a Belgian investment company.

Furthermore, the Commission rejects the justifications put forward by the Belgian authorities. First of all, the Belgian authorities did not plead objective grounds justifying the conclusion that there is any difference between the situations of resident investment companies and non-resident investment companies which is relevant to their tax status. Secondly, the tax scheme in question bears no relation to a balanced division of the power of taxation between the States concerned. In any event, a member State cannot rely on a bilateral convention to escape from its obligations under the Treaty. Finally, as regards the alleged risk of tax fraud by non-resident investment companies, the Belgian authorities cannot rely on obstacles to tax inspections which result from the provisions adopted by Belgium itself to justify failure to apply the freedoms guaranteed by the Treaty.