(Reference for a preliminary ruling from the Hoge Raad der Nederlanden)

(Directive 69/335 – Indirect taxes on the raising of capital – National rules taxing a (subsidiary) company by way of capital duty in respect of a contribution made by its parent company (the grandparent company) in favour of its subsidiary (a sub-subsidiary company) – Capital duty – Increase of capital – Payment ‘to the share premium account’ – Increase in the assets of the company – Increase in the value of shares – Provision of services by a member – Payment made by a member of a member – Payment to a subsidiary – ‘Real recipient’ – Levying of capital duty once only (in the Community) – Article 52 of the EC Treaty (now, after amendment, Article 43 EC) – Freedom of establishment – National practice exempting a (subsidiary) capital company from taxation only if its subsidiary (sub-subsidiary company) is also established in that Member State)

Summary of the Judgment

(Council Directive 69/335, Art. 4(2)(b) and (c))

(Council Directive 69/335, sixth recital, Arts 2(1) and 4(2)(b))

1.The ‘increase in the capital’ referred to in Article 4(1)(c) of Directive 69/335 concerning indirect taxes on the raising of capital, as amended by Directive 85/303, means a formal increase of a company’s capital by means either of an issue of new shares or by an increase in the nominal value of the existing shares.

On the other hand, and to the extent to which the assets of the company are defined as all the property which the members have contributed, together with any increase in its value, the ‘increase in the assets’ within the meaning of Article 4(2)(b) of the directive includes, in principle, every kind of increase in the net assets of a capital company.

The fact that a contribution was paid not by a member of the capital company in question but by the parent company of that company, and thus by a member of a member, does not prevent that contribution from being deemed a ‘provision of services by a member’ within the meaning of Article 4(2)(b) of that directive, since the contribution in question was paid by the grandparent company to the sub-subsidiary in order to increase the value of the shares in the latter, and that increase was primarily in the interests of its sole member, the subsidiary. The contribution must thus be attributed to the subsidiary.

(see paras 33-34, 39)

2.Article 4(2)(b) of Directive 69/335 concerning indirect taxes on the raising of capital, as amended by Directive 85/303 of 10 June 1985, read in conjunction with Article 2(1) thereof and the sixth recital in its preamble, precludes a Member State from levying duty on a (subsidiary) capital company in respect of a contribution paid by its parent company (the grandparent company) to its subsidiary (a sub-subsidiary) where, under the directive, the contribution at issue is subject to capital duty payable by the sub-subsidiary.

Given that a contribution to a company may be taxed only once (in the Community), that contribution cannot be subject to taxation a second time, payable on that occasion by the subsidiary.

In that connection, it is of little importance that the contribution in question may possibly have also increased the assets of the subsidiary, since such an increase cannot constitute anything more than an automatic and incidental economic repercussion of the contribution made to the sub-subsidiary company and is not therefore attributable to a second separate contribution which could, as such, be subject to tax. Similarly, it is of little importance that the Member State with authority to tax the sub-subsidiary did not in fact do so. Member States are free to exempt contributions to companies from capital duty, without such exemption entailing the consequence that another Member State is entitled to tax them.

(see paras 40-44, operative part)

12 January 2006 (*)

(Directive 69/335 – Indirect taxes on the raising of capital – National rules taxing a (subsidiary) company by way of capital duty in respect of a contribution made by its parent company (the grandparent company) in favour of its subsidiary (a sub-subsidiary company) – Capital duty – Increase of capital – Payment ‘to the share premium account’ – Increase in the assets of the company – Increase in the value of shares – Provision of services by a member – Payment made by a member of a member – Payment to a subsidiary – ‘Real recipient’ – Levying of capital duty once only (in the Community) – Article 52 of the EC Treaty (now, after amendment, Article 43 EC) – Freedom of establishment – National practice exempting a (subsidiary) capital company from taxation only if its subsidiary (sub-subsidiary company) is also established in that Member State)

In Case C-494/03,

REFERENCE for a preliminary ruling under Article 234 EC from the Hoge Raad der Nederlanden (Netherlands), made by decision of 21 November 2003, received at the Court on 24 November 2003, in the proceedings

THE COURT (First Chamber),

composed of P. Jann (Rapporteur), President of the Chamber, N. Colneric, J.N. Cunha Rodrigues, M. Ilešič and E. Levits, Judges,

Advocate General: M. Poiares Maduro,

Registrar: M. Ferreira, Principal Administrator,

having regard to the written procedure and further to the hearing on 26 May 2005,

after considering the observations submitted on behalf of:

– Senior Engineering Investments BV, by H.T.P.M. van den Hurk and G. Weening, belastingadviseurs,

– the Netherlands Government, by H.G. Sevenster and J. van Bakel, and by M. de Grave, acting as Agents,

– the Commission of the European Communities, by R. Lyal and A. Weimar, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 14 July 2005,

gives the following

1.This request for a preliminary ruling relates to the interpretation of Articles 2 and 4 of Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital (OJ, English Special Edition 1969(II), p. 412), as amended by Council Directive 85/303/EEC of 10 June 1985 (OJ 1985 L 156, p. 23; hereinafter ‘Directive 69/335’ or ‘the Directive’), and of Article 52 of the EC Treaty (now, after amendment, Article 43 EC).

2.The ruling was requested in proceedings between Senior Engineering Investments BV (hereinafter ‘Senior BV’ or the ‘subsidiary’) and the Staatssecretaris van Financiën concerning the levying of capital duty in respect of a financial contribution paid by its parent company, Senior Engineering Investments Limited (hereinafter ‘Senior Limited’ or ‘the grandparent company’) to the ‘share premium account’ of its subsidiary, Senior Engineering Trading Gesellschaft für Autozulieferteile mbH (hereinafter ‘Senior GmbH’ or ‘the sub-subsidiary’).

Legal background

Community legislation

Recitals 7 to 9 of Directive 69/335 state:

‘(7) Development consent for public and private projects which are likely to have significant effects on the environment should be granted only after an assessment of the likely significant environmental effects of those projects has been carried out. …

(8) Projects belonging to certain types have significant effects on the environment and those projects should, as a rule, be subject to a systematic assessment.

(9) Projects of other types may not have significant effects on the environment in every case and those projects should be assessed where the Member States consider that they are likely to have significant effects on the environment.’

Article 2(1) of that directive provides:

‘Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in Article 4.’

Under Article 3(1) of that directive:

‘The environmental impact assessment shall identify, describe and assess in an appropriate manner, in the light of each individual case, the direct and indirect significant effects of a project on the following factors:

…

(b) biodiversity, with particular attention to species and habitats protected under [Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), as amended by Council Directive 2013/17/EU of 13 May 2013 (OJ 2013 L 158, p. 193) (“Directive 92/43”)] and Directive 2009/147/EC [of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ 2010 L 20, p. 7)];

…’

Article 4 of Directive 2011/92 provides:

‘Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in Article 4.’

Subject to Article 2(4), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.

Subject to Article 2(4), for projects listed in Annex II, Member States shall determine whether the project shall be made subject to an assessment in accordance with Articles 5 to 10. Member States shall make that determination through:

(a) a case-by-case examination;

(b) thresholds or criteria set by the Member State.

Member States may decide to apply both procedures referred to in points (a) and (b).

Where a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account. Member States may set thresholds or criteria to determine when projects need not undergo either the determination under paragraphs 4 and 5 or an environmental impact assessment, and/or thresholds or criteria to determine when projects shall in any case be made subject to an environmental impact assessment without undergoing a determination set out under paragraphs 4 and 5.

Where Member States decide to require a determination for projects listed in Annex II, the developer shall provide information on the characteristics of the project and its likely significant effects on the environment. The detailed list of information to be provided is specified in Annex IIA. The developer shall take into account, where relevant, the available results of other relevant assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The developer may also provide a description of any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

The competent authority shall make its determination, on the basis of the information provided by the developer in accordance with paragraph 4 taking into account, where relevant, the results of preliminary verifications or assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The determination shall made available to the public and:

where it is decided that an environmental impact assessment is required, state the main reasons for requiring such assessment with reference to the relevant criteria listed in Annex III; or

where it is decided that an environmental impact assessment is not required, state the main reasons for not requiring such assessment with reference to the relevant criteria listed in Annex III, and, where proposed by the developer, state any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

Member States shall ensure that the competent authority makes its determination as soon as possible and within a period of time not exceeding 90 days from the date on which the developer has submitted all the information required pursuant to paragraph 4. In exceptional cases, for instance relating to the nature, complexity, location or size of the project, the competent authority may extend that deadline to make its determination; in that event, the competent authority shall inform the developer in writing of the reasons justifying the extension and of the date when its determination is expected.’

Annex II.A of that directive contains the list of ‘information to be provided by the developer on the projects listed in Annex II’. That list reads as follows:

A description of the project, including in particular:

a description of the physical characteristics of the whole project and, where relevant, of demolition works;

a description of the location of the project, with particular regard to the environmental sensitivity of geographical areas likely to be affected.

A description of the aspects of the environment likely to be significantly affected by the project.

A description of any likely significant effects, to the extent of the information available on such effects, of the project on the environment resulting from:

the expected residues and emissions and the production of waste, where relevant;

the use of natural resources, in particular soil, land, water and biodiversity.

ECLI:EU:C:2025:140

JUDGMENT OF 6. 3. 2025 – CASE C-41/24 WALTHAM ABBEY RESIDENTS ASSOCIATION

The criteria of Annex III shall be taken into account, where relevant, when compiling the information in accordance with points 1 to 3.’

Annex III to that directive sets out the ‘criteria to determine whether the projects listed in Annex II should be subject to an environmental impact assessment’.

Directive 2014/52

Recitals 11 and 29 of Directive 2014/52 state:

The measures taken to avoid, prevent, reduce and, if possible, offset significant adverse effects on the environment, in particular on species and habitats protected under [Directive 92/43] and Directive 2009/147 …, should contribute to avoiding any deterioration in the quality of the environment and any net loss of biodiversity, in accordance with the [European] Union’s commitments in the context of the [United Nations Convention on Biological Diversity, signed in Rio de Janeiro on 5 June 1992,] and the objectives and actions of the Union Biodiversity Strategy up to 2020 laid down in the [Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions] of 3 May 2011 entitled ‘Our life insurance, our natural capital: an EU biodiversity strategy to 2020’ [(COM(2011) 244 final)]

…

When determining whether significant effects on the environment are likely to be caused by a project, the competent authorities should identify the most relevant criteria to be considered and should take into account information that could be available following other assessments required by Union legislation in order to apply the screening procedure effectively and transparently. In this regard, it is appropriate to specify the content of the screening determination, in particular where no environmental impact assessment is required. Moreover, taking into account unsolicited comments that might have been received from other sources, such as members of the public or public authorities, even though no formal consultation is required at the screening stage, constitutes good administrative practice.’

Directive 92/43

Article 6(3) of Directive 92/43 provides:

‘Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.’

Article 12(1) of that directive provides:

‘Member States shall take the requisite measures to establish a system of strict protection for the animal species listed in Annex IV(a) in their natural range, prohibiting:

all forms of deliberate capture or killing of specimens of these species in the wild;

deliberate disturbance of these species, particularly during the period of breeding, rearing, hibernation and migration;

deliberate destruction or taking of eggs from the wild;

deterioration or destruction of breeding sites or resting places.’

Point (a) of Annex IV to that directive mentions ‘all species’ of bats belonging to the suborder of ‘microchiroptera’.

Irish law

On 8 December 1997, the grandparent company, Senior Limited, paid a contribution of DEM 10 071 000 (equivalent to NLG 11 349 000) to its sub-subsidiary, Senior GmbH.

19In Germany, that transaction did not give rise to any levy payable by Senior GmbH since, on the basis of Article 7(2) of Directive 69/335, Germany had abolished capital duty with effect from 1 January 1992.

20In the Netherlands, Senior BV was required to pay capital duty of NLG 113 490.

21Senior BV then brought an action contesting the legality of that taxation. Its action was dismissed by the Inspector of Taxes and by the Gerechtshof te’s-Gravenhage (Regional Court of Appeal, The Hague), whereupon Senior BV appealed on a point of law against the latter’s decision.

Entertaining doubts as to the compatibility with Community law of the Netherlands rules making a (subsidiary) company subject to capital duty in respect of a contribution paid by its parent company (the grandparent company) to its subsidiary (a sub-subsidiary), but on the other hand exempting from that duty a company (a subsidiary company) where the latter’s own subsidiary (a sub-subsidiary) is also established in the Netherlands, the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) stayed proceedings and referred the following questions to the Court of Justice for a preliminary ruling:

‘(1) Does Article 4(2)(b) of … Directive [69/335] … permit capital duty to be levied on a company in respect of a direct informal capital contribution made by the parent of that company to a subsidiary of that company and, if so, what circumstances are of relevance in that respect; in particular is it relevant whether or not that company must be regarded, from an economic point of view, as the real recipient ... of that direct informal capital contribution?

(2) Does the freedom of establishment laid down in Article 52 [of the EC Treaty], in conjunction with Article 58 [of the EC Treaty (now, after amendment, Article 48 EC)], prohibit the tax authorities of a Member State from pursuing a policy whereby no capital duty is levied on a company in respect of a direct informal capital contribution made by the parent of that company to a subsidiary of that company, provided that that subsidiary is established in that Member State, and is it relevant in this respect on the assumption that the directive permits capital duty to be levied both on that company and on its subsidiary in a case such as the present whether or not more capital duty has been levied at group level than would have been the case had both that company and its subsidiary been established in the Netherlands?’

The questions referred to the Court of Justice

The first question: chargeability to capital duty (Article 4(1)(c) and (2)(b) of Directive 69/335)

23By its first question, the national court seeks in essence to ascertain whether, in circumstances such as those of the main proceedings, Directive 69/335 precludes a Member State from levying capital duty on a (subsidiary) capital company in respect of a contribution made by its parent company (the grandparent company) to its subsidiary (a sub-subsidiary).

24It must be borne in mind in that connection that Articles 1 to 9 of Directive 69/335 provide for the levying of harmonised capital duty on contributions to the capital of companies.

25According to the scheme and structure of Directive 69/335, capital duty is to be levied on the capital company receiving the contribution in question. The recipient is normally the company to which the resources or services in question are physically given. It is only exceptionally that that is not the case and that it is necessary to seek to identify the ‘real recipient’ of the resources or services in question (see, in particular, in relation to a financial contribution paid to the subsidiaries of a company which increased its capital, Case C-339/99 ESTAG [2002] ECR I-8837, paragraphs 44 to 47).

26Furthermore, it follows from the sixth recital in the preamble to and Article 2 of Directive 69/335 that duty on the raising of capital should be charged only once (see, to that effect, in particular, Joined Cases C-71/91 and C‑178/91 Ponente Carni and Cispadana Costruzioni [1993] ECR I‑1915, paragraph 19, and Case C-236/97 Codan [1998] ECR I‑8697, paragraph 27).

27In the main proceedings, it is clear from the account of the facts given by the referring court that the contribution in question was paid to the sub-subsidiary company (Senior GmbH) in the context of a contribution in its favour. On the other hand, nothing in the account of the facts permits the inference that the circumstances of the main proceedings constitute an exceptional situation in which another company, such as, for example, the subsidiary (Senior BV) should be regarded as being the ‘real recipient’ of that contribution.

28It is therefore necessary to consider whether, under Directive 69/335, the contribution in question is subject to capital duty payable by the sub-subsidiary (Senior GmbH). If that were the case, that same contribution could not be the subject of duty levied on another company, in this case the subsidiary (Senior BV).

29In that connection, Article 4 of Directive 69/335 specifies the transactions on which the Member States may or must, according to the category, impose capital duty (see, to that effect, in particular, Case C-280/91 Viessmann [1993] ECR I‑971, paragraph 12, and Case C-152/97 Agas [1998] ECR I-6553, paragraphs 19 and 20).

30The transaction at issue in the main proceedings is a financial contribution paid by a grandparent company (Senior Limited) to its sub-subsidiary (Senior GmbH) and therefore it could, in principle, be analysed in the light either of Article 4(1)(c) of Directive 69/335 or of Article 4(2)(b) thereof.

31Article 4(1)(c) of the Directive provides for the levying of capital duty in respect of an increase of the capital of a capital company by contribution of assets of any kind.

32Article 4(2)(b) of the Directive provides that the Member States may subject to capital duty an increase in the assets of a capital company through the provision of services by a member (or a shareholder) which do not entail an increase in the company’s capital, but which may increase the value of the company’s shares.

33A comparison of those two provisions prompts the finding, in line with the view put forward by the Netherlands Government, that the ‘increase in the capital’ referred to in Article 4(1)(c) of Directive 69/335 means a formal increase of a company’s capital by means either of an issue of new shares or by an increase in the nominal value of the existing shares (see, to that effect, Case 270/81 Felicitas Rickmers-Linie [1982] ECR 2771, paragraph 15, and Case 36/86 Dansk Sparinvest [1988] ECR 409, paragraph 13).

34On the other hand, and to the extent to which the assets of the company are defined as all the property which the members have contributed, together with any increase in its value (see, to that effect, Case C-38/88 Siegen [1990] ECR I-1447, paragraph 12), the ‘increase in the assets’ within the meaning of Article 4(2)(b) of the Directive includes, in principle, every kind of increase in the net assets of a capital company. Thus, the Court has described as an ‘increase in the assets’ within the meaning of that provision, for example, a transfer of profits (see Case C-49/91 Weber Haus [1992] ECR I-5207, paragraph 10), an interest-free loan (see, in particular, Case C-392/00 Norddeutsche Gesellschaft zur Beratung und Durchführung von Entsorgungsaufgaben bei Kernkraftwerken [2002] ECR I‑7397, paragraph 18), an absorption of losses (see Siegen, paragraph 13), and the waiver of a claim (Case C‑15/89 Deltakabel [1991] ECR I-241, paragraph 12).

35In the main proceedings, the contribution in question was paid to the share premium account of the sub-subsidiary company (Senior GmbH). However, in so far as a payment to the share premium account does not involve any ‘increase in the capital’, that contribution does not fall within the scope of Article 4(1)(c) of Directive 69/335.

36The contribution in question does fall, however, within the scope of Article 4(2)(b) of the Directive.

37First, the payment of the financial contribution in question entailed an ‘increase in the assets’ of the sub-subsidiary (Senior GmbH).

38Second, that contribution was one that ‘may increase the value of the company’s shares’. Following that contribution, the shares in the sub-subsidiary (Senior GmbH) are de facto more valuable.

39Third, the contribution in question is a ‘provision of services by a member’. It is true that that contribution was paid not by a member of Senior GmbH (Senior BV) but by the parent company of the latter (Senior Limited), and thus by a member of a member. However, it must be borne in mind that the Court has adopted, with regard to the origin of contributions, an informal approach based on the real appropriation of the contribution (see, to that effect, Weber Haus, paragraphs 11 and 13; ESTAG, paragraphs 37 to 39 and 41; and Case C-71/00 Develop [2002] ECR I-8877, paragraphs 25 to 29). As the contribution in question was paid by the grandparent company (Senior Limited) to the sub-subsidiary (Senior GmbH) in order to increase the value of the shares in the latter, and as that increase was primarily in the interests of its sole member, namely Senior BV, it must be held that that contribution must be attributed to the latter, that is to say Senior BV. It is therefore a ‘provision of services by a member’ within the meaning of Article 4(2)(b) of Directive 69/335.

40It follows that, under Directive 69/335, the contribution at issue in the main proceedings is subject to capital duty payable by the sub-subsidiary (Senior GmbH).

41Given that, pursuant to Article 2(1) of Directive 69/335, read in conjunction with the sixth recital in its preamble, a contribution to a company may be taxed only once (in the Community), that contribution cannot be subject to taxation a second time, payable on that occasion by the subsidiary (Senior BV).

42In that connection, it is of little importance that the contribution in question may possibly have also increased the assets of the subsidiary (Senior BV). It must be pointed out, as the Advocate General observed in point 21 of his Opinion, that such an increase cannot constitute anything more than an automatic and incidental economic repercussion of the contribution made to the sub-subsidiary company (Senior GmbH). It is not therefore attributable to a second separate contribution which could, as such, be subject to tax.

43Similarly, it is of little importance that the Member State with authority under Article 2(1) of Directive 69/335 to tax the sub-subsidiary (Senior GmbH), namely the Federal Republic of Germany, did not in fact do so, because capital duty has been abolished there since 1 January 1992. The Member States are free, under Article 7(2) of Directive 69/335, to exempt contributions to companies from capital duty, without such exemption entailing the consequence that another Member State is entitled to tax them. On the contrary, Directive 69/335 favours and encourages both specific exemptions from capital duty (Articles 7(1) and (3), 8 and 9) and complete abolition (Article 7(2)). The Directive cannot therefore be interpreted as enabling a Member State to benefit, so as to increase its tax revenue, from the fiscal moderation of another Member State.

44In view of the foregoing, the answer to be given to the first question must be that, in circumstances such as those of the main proceedings, Article 4(2)(b) of Directive 69/335, read in conjunction with Article 2(1) thereof and the sixth recital in its preamble, precludes a Member State from levying duty on a (subsidiary) capital company in respect of a contribution paid by its parent company (the grandparent company) to its subsidiary (a sub-subsidiary).

The second question: the right to freedom of establishment (Article 52 of the EC Treaty)

45In view of the answer given to the first question, it is unnecessary to reply to the second.

Costs

46Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (First Chamber) hereby rules:

In circumstances such as those of the main proceedings, Article 4(2)(b) of Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital, as amended by Council Directive 85/303/EEC of 10 June 1985, read in conjunction with Article 2(1) thereof and the sixth recital in its preamble, precludes a Member State from levying duty on a (subsidiary) capital company in respect of a contribution paid by its parent company (the grandparent company) to its subsidiary (a sub-subsidiary).

[Signatures]

*Language of the case: Dutch.