8.3.2008

EN

Official Journal of the European Union

C 64/22

(Case C-562/07)

(2008/C 64/33)

Language of the case: Spanish

Parties

Applicant: Commission of the European Communities (represented by: R. Lyal and I. Martinez del Peral Cagigal, agents)

Defendant: Kingdom of Spain

Form of order sought

—Declare that by treating differently capital gains obtained in Spain by non-residents from those obtained by residents until 31 December 2006, the Kingdom of Spain failed to fulfil its obligations under Articles 39 and 56 EC and Articles 28 and 40 of the EEA Agreement;

—Order the Kingdom of Spain to pay the costs.

Pleas in law and main arguments

Under the Spanish legislation in force until 31 December 2006, the taxation of capital gains of non-residents was subject to a proportional rate of 35 %, while that of residents was subject to a progressive schedule if the capital assets remained their property for a period of less than one year, and to a proportional rate of 15 % if the period of ownership exceeded one year. Consequently, the tax burden borne by non-residents if they sold their assets after the lapse of one year following acquisition was always greater. In the event of disposal of assets within the year following acquisition, non-residents also bore a greater tax burden, except when the average rate applied to resident taxpayers exceeded 35 % (which would imply very considerable capital gains).

The Commission considers that there is no objective difference between the situations of those two categories of taxpayers, so that the higher tax burden on non-residents is discrimination which unlawfully restricts freedom of movement for workers and the free movement of capital provided for in Articles 39 and 56 EC and Articles 28 and 40 of the EEA Agreement.