C-118/96

1 — The referring court uses, sometimes indiscriminately, the terms 'Swedish company' and 'company established in Swe- den' on the one hand, and the terms 'foreign company' and 'company not established in Sweden', on the other. How- ever, considering the characteristics and the rationale behind the Law at issue, the grounds put forward by the Swedish Government in justification thereof, as well as certain state- 2. To better understand the meaning and the ments made in the order for reference, it is my view that the decisive criterion for application of the Premium Tax Law scope of the question referred for a prelimi- — in lieu of the normal tax arrangement — is that of the nary ruling, it is appropriate to start with a place of establishment of the insurance company (outside Sweden) rather than its nationality. This assumption will therefore be adopted throughout this Opinion and the terms 'domestic companies' and 'foreign companies', occasionally used by the referring court and quoted in inverted commas in the text, are to be taken to refer to established and non- * Original language: Italian. established companies respectively.

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OPINION OF MR TESAURO — CASE C-118/96

those conditions being that the relevant Taxation of companies not established in policy must be contracted with an insurance Sweden company established in Sweden.

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SAFIR v SKATTEMYNDIGHETEN I DALARNAS LÄN

on the basis of the assets of the issuing insur- when Jessica Safir (hereinafter the 'appli- ance company and (in part) by way of a cant'), having taken out a life assurance yield tax on the return to policyholders; sav- policy with Skandia Life Assurance Com- ings policies issued by insurance companies pany Ltd, an English insurance company established abroad and consequently not which also operates on the Swedish market, 3 liable to tax in Sweden are, however, taxed applied to the tax authorities for an exemp- on the premiums paid by the policyholders. tion from premium tax under Paragraph 5 of In other words, as the referring court points the Premium Tax Law. out, 'the tax on savings policies issued by Swedish life assurance companies applies to the yield on individual life assurance policies whilst the tax on equivalent policies issued by foreign life assurance companies applies to the premiums.'

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OPINION OF MR TESAURO — CASE C-118/96

the following question to the Court for a The relevant provisions of Community law preliminary ruling:

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SAFIR v SKATTEMYNDIGHETEN I DALARNAS LÄN

9. In this connection, I consider that a fur- devotes to them two specific chapters (the ther clarification is necessary. It is clear from third and fourth respectively) under Title III. an examination of the rules governing the freedom to provide services and the free movement of capital, their place in the Treaty and a careful reading of all the rel- evant case-law that the provisions of Article 59 et seq., on the one hand, and of Article 73b et seq., on the other, are not intended to apply cumulatively and still less indiscrimi- The deliberate distinction drawn by the nately, but that they govern, at least in prin- authors of the Treaty between the sphere of ciple, different cases: the first require aboli- application of the rules governing services tion of all restrictions on the free provision and that of the rules governing capital is con- of services — including financial services — firmed by Article 60, which identifies the within the Community whereas the second notion of services with services normally prohibit all restrictions on the free move- provided for remuneration, 'in so far as they ment of capital and payments between Mem- are not governed by the provisions relating ber States and between Member States and to freedom of movement of goods, capital third countries. and persons'. The wording of Article 61(2), pursuant to which 'the liberalisation of banking and insurance services connected with movements of capital shall be effected in step with the progressive liberalisation of movement of capital', 5 is also significant in this respect.

account transactions) were to be treated as tions had to be paid in the State itself, the services or as movements of capital before Court examined the case only in relation to ascertaining the compatibility with Commu- Articles 48 and 59 of the Treaty. Moreover, nity law of the restrictions placed on such in precluding application of the rules relating transactions by the provisions of national to capital movements, despite these having law in question. 6 been expressly invoked, the Court stated that 'Article 67 does not prohibit restrictions which do not relate to the movement of capital but which result indirectly from restrictions on other fundamental free- doms'. 9 In its judgment in Casati, rendered shortly thereafter, the Court then specified the dif- ference in scope, in terms of application in time and detailed rules for application, between the provisions relating to capital movements and those relating to the other freedoms guaranteed by the Treaty. In par- ticular, the Court underscored the fact that free movement of capital, unlike other free- doms, could not be considered to be auto- matically achieved at the end of the transi- tional period; and that Article 67, still in force at the time, 7 imposed the obligation to liberalise movements of capital only 'to the extent necessary to ensure the proper func- 13. Subsequent case-law follows the same tioning of the common market'. 8 logic. In Bordessa, for example, the Court expressly excluded application of Article 59 (and Article 30) to measures subjecting the exportation of coins, banknotes and bearer cheques to the requirement of preliminary authorisation and examined those measures 12. The position adopted by the Court in under Article 67 alone (and the directive the Bachmann case is clearer still. Asked to implementing that provision). 10 In that case, rule on the compatibility with Community the movement of capital was not connected law of a provision of Belgian law which sub- to trade in services (or goods). Moreover, the jected the deductibility of health, pension Court stated in this connection that, even if and life insurance contributions for tax pur- the transaction at issue in the main proceed- poses to the condition that such contribu- ings had been shown to constitute a payment

Although it reached the opposite result, the Court reasoned in the same way when ruling that the compatibility with Community law of United Kingdom legislation prohibiting the advertisement and sale of foreign lottery tickets as well as the conduct of such lotter- ies on British territory was to be examined under Article 59 of the Treaty and expressly, although incidentally, excluded application of the rules relating to capital (and those relating to goods and persons). 12

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O P I N I O N O F MR TESAURO — CASE C-118/96

15. Without going into the merits of the Treaty, on the other, is different. While free- classification attributed to the transaction at dom to provide services is, of course, subject issue (movement of capital and/or provision only to the exceptional restrictions permitted of services), it may be questioned why the or envisaged by Article 56 (and, on the con- Court, having established that the provision ditions reviewed below, to restrictions justi- in dispute was contrary to Article 67 of the fied by overriding requirements), free move- Treaty, thought it necessary to examine it ment of capital, on the other hand, is subject under Article 59 as well. 15 to the broader restriction laid down in Article 73d(a), which expressly permits the enactment of fiscal provisions which distin- guish between taxpayers on grounds of resi- dence (even though, under the 'classic' for- mula, they must not constitute a means of arbitrary discrimination or a disguised restriction). This is a subtle difference in the In my view, this approach is consistent with ambit of the two provisions which makes it neither the letter nor the spirit of the rel- even more important for their respective evant Community provisions, considering in scopes of application to be determined accu- particular the residual value that the Treaty rately. specifically and indisputably places on the rules governing the freedom of services. Moreover, without providing proper reason- ing it goes against earlier case-law, outlined above, in the matter. 16

15 — The judgment has been universally criticised in legal litera- ture precisely because of this 'double' assessment. See, inter alia, P. Bentley, Tax obstacles to the free movement of capi- tals, in The EC Tax Journal, 1996-1997, p. 49; and W. Devroe and J. Wouters, Liberté d'établissement et libre prestation de services, in Journal des tribunaux, droit européen, 1996, p. 49. This should be done on the basis of the cri- 16 — Case C-148/91 Verenigung Veronica Omroep Organisatie v Commissariaat voor de Media [1993] ECR I-487 was teria laid down in the case-law existing prior clearly quite different. There the Court ruled that the national provisions at issue (the Dutch Mediawet on radio to Svensson: if the measure at issue directly and television broadcasting) were compatible with Commu- restricts the transfer of capital, rendering it nity law given that they restricted neither the freedom to provide services nor the free movement of capital. impossible or more difficult, for example by

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SAFIR v SKATTEMYNDIGHETEN I DALARNAS L Ä N

subjecting it to mandatory authorisation or ment than those issued by insurers estab- in any event by imposing currency restric- lished in Sweden. It need only be noted here tions, Article 73b et seq. of the Treaty will that the premium tax to which policyholders apply; 17 if, conversely, it only indirectly are subject could well deter persons from restricts movement of capital and primarily taking out policies with companies that are constitutes a non-monetary restriction on not established in Sweden, particularly if the freedom to provide services, then Article domestic insurers offer comparable insurance 59 et seq. of the Treaty will apply. 18 It products with tax-exempt premiums. would still be possible for both sets of provi- sions to apply together, but only in relation to the provisions restricting simultaneously, although from different angles, both provi- sion of services and movement of capital. 19

17 — To be precise. Article 73b(1) in the case of movements of capital not connected to a trade in goods or services; or Article 730(2), which applies to payments, where the capital in question represents consideration for trade in goods or services. 18 — On this point, in addition to the cases cited in footnotes 11 to 13 above, see the recent judgment in Parodi (cited in 19. In my view, those aspects are sufficient footnote 5), in which the Court — after having ruled out to preclude application of Article 73b and at that a provision of French law subjecting the grant of mort- gage loans by foreign credit institutions to authorisation the same time to bring the case within the could be justified, under Article 61(2) of the Treaty, by (at the time) non-liberalised restrictions on movement of capi- purview which Article 59 of the Treaty has if tal — then examined the case solely under Article 59, no other provisions apply. Consequendy, it expressly classifying the transaction in question (mortgage loan from a credit institution) as a service. is in relation to that article that the compat- 19 — For example, a provision like the one at issue in Svensson ibility with Community law of the national but which would also prohibit loans in foreign currency from credit institutions established abroad. legislation at issue should be examined.

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O P I N I O N OF MR TESAURO — CASE C-118/96

The restrictive effects of the measure at issue worthy of protection (see Futura and Bach- mann respectively). The legislation at issue is, they say, also necessary and proportionate because its objectives could not be effectively attained by less restrictive measures. 21

According to those same Governments, even if the legislation at issue were established to be discriminatory, it would in any case be justified by virtue of its aims. It is designed to maintain effective fiscal supervision while ensuring fiscal cohesion of the national tax system: these are general interests which have been expressly recognised in case-law as 22. In other words, the Premium Tax Law provides for differentiated tax treatment of 20 — Case C-279/93 Finanzamt Köln-Altstadt v Schumacker [1995] ECR I-225: but see also Case C-80/94 Wielockx v Inspecteur der Directe Belastingen [1995] ECR I-2493 and Case C-107/94 Asscher v Staatssecretaris van Financien [1996] ECR I-3089; and, finally, Case C-250/95 Futura Par- 21 — Actually, the United Kingdom Government proposes to ticipations and Singer v Administration des Contributions leave this assessment to the national court in view of the [1997] ECR I-2471. particular circumstances of the case.

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That article prohibits 'restrictions on free- dom to provide services within the Commu- nity ... in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended'. As the Court has itself stated on several occasions, Articles 59 and 60 'require the removal not only of all discrimination against a provider While it is true, moreover, that such different of a service on the grounds of his nationality tax treatment affects all policyholders domi- but also all restrictions on his freedom to ciled or resident in an individual Member provide services imposed by reason of the State and that consequently, under the rules fact that he is established in a Member State of Community law on freedom of services, other than that in which the service is to be this treatment is not relevant as such, it none the less has repercussions on the providers of the services concerned, depending on whether or not they have a permanent estab- 22 — It need hardly be pointed out that the discrimination would be even more obvious if the Premium Tax Law regime was lishment in Sweden. In other words, insur- applied not on the basis of establishment of the insurer but ance companies without an establishment in on the basis of the insurer's nationality. On this point, see footnote 1 above. Sweden — since only the premiums paid by 23 — It may be recalled moreover that already the General pro- their policyholders are liable to tax — are at gramme for the abolition of restrictions on freedom to pro- vide services (adopted on 18 December 1961, OJ 15 January a clear disadvantage in relation to insurance 1962, p. 32) included among the restrictions to be abolished also those which indirectly affect providers of services, for companies established in Sweden, which example through the recipients thereof.

First, the Schumacker case-law is itself based on the explicit proposition that 'although as Community law stands at present, direct Furthermore, the principle of fiscal territori- taxation does not as such fall within the pur- ality, which the Court has recognised in view of the Community, the powers retained respect of the rules on free movement of per- by the Member States must nevertheless be sons and freedom of establishment, cannot exercised consistently with Community be transposed sic et simpliciter to freedom of law', 25 and Member States shall 'therefore services. The very provisions of the Treaty avoid any overt or covert discrimination o n which enshrine that freedom require that a grounds of nationality'. 26 Second, while it is provider of services conducting his business true, as the Court has made clear, that differ- in a Member State other than that in which ences in the tax treatment of residents and he is established at the very least be given non-residents do not as such constitute dis- equivalent treatment with a provider estab- crimination prohibited under the Treaty, it is lished in that same State. It follows that also true that the objective difference acceptance of a principle which allowed dif- between two categories of taxpayers must be ferent tax treatment of recipients of services taken into account, in particular 'from the according to the place of establishment of point of view of the source of the income the provider of the services would not only be contrary to the very concept of freedom

24 — Case 205/84 Commission v Germany [1986] ECR 3755, 'the Insurance case', it paragraph 25; Case C-180/89 Commis- 27 — Wielockx (cited in footnote 20), at paragraph 18; in the same sion v Italy [1991] ECR I-709, at paragraph 15. sense, see the judgments in Schumacker and Asscher (cited 25 — See the judgments in Schumacker, Wielockx and Asscher in footnote 20), at paragraph 31 et seq. and paragraph 41 (cited in footnote 20), at paragraphs 21, 16 and 36 respec- respectively. In those judgments, the Court did not consider tively. the cases of different treatment submitted to it to be objec- 26 — Futura (cited in footnote 20), at paragraph 19. tively justified.

Lastly, I would recall that in Bachmann, where the facts were in many ways simlar to the present case, the Court stated that 'provi- The grounds relied on to justify the measure sions requiring an insurer to be established at issue in a Member State as a condition of the eli- gibility of insured persons to benefit from certain tax deductions in that State operate to deter those seeking insurance from approaching insurers established in another Member State, and thus constitute a restric- tion of the latter's freedom to provide ser- vices'. 29 27. At this juncture, it remains only t o examine whether, in view of its characteris- tics and rationale, the legislation is none the less capable of being justified. Both the Swedish and United Kingdom Governments submit that there is here a general interest, 26. All things considered, the legislation at specifically the need to ensure national fiscal issue is certainly capable of restricting the cohesion and effective fiscal supervision. freedom to provide services and, conse- quently, is in principle contrary to Article 59 of the Treaty. It need hardly be stressed that this conclusion cannot be challenged on the grounds that the same legislation makes it possible for policyholders insured with non- established companies to obtain an exemp- tion from, or reduction of, premium tax. This possibility is only contingent and in any 28. I would point out first of all that, case requires not only the policyholder to according to the Court's case-law, a national provision which is discriminatory can be jus- tified, and therefore be declared compatible 28 — In this regard, I would recall this well-known statement of with Community law, only if it is covered b y the Court: 'If the requirement of an authorisation consti- one of the derogations expressly laid down tutes a restriction on the freedom to provide services, the requirement of a permanent establishment is the very nega- in the Treaty. In Bond van Adverteerders, tion of that freedom' (the 'Insurance' case, cited in footnote 24, at paragraph 52; the italics are mine). Although the leg- subsequently confirmed in other cases, the islation at issue does not formally subject services provided Court made clear that 'national rules which by foreign insurers to the requirement of establishment, it does, however, as we have seen, entail similar effects in so are not applicable to services without dis- far as it subjects to this requirement the grant of significant tax advantages to policyholders. tinction as regards their origin and which are 29 — Bachmann (cited in footnote 9 ) at paragraph 31. therefore discriminatory are compatible with

29. I would also point out that national pro- visions restricting freedom to provide ser- vices may also be justified where they safe- guard needs of public interest, provided, however, that certain well-defined conditions 30. Given the foregoing, it must now be are met. It is settled case-law that freedom to established, in order to decide which justifi- provide services, one of the fundamental cations are admissible, whether the measure freedoms enshrined in the Treaty, may only at issue is to be treated as formally discrimi- be restricted by provisions which comply natory or, on the contrary, as applicable cumulatively with certain specific conditions: they must be justified by the general interest and apply (without distinction) to all persons 32 — See the 'Insurance' case (cited in footnote 24) at paragraph 27, and also, lastly, Parodi (cited in footnote 5) at paragraph or undertakings operating within the ter- 21. ritory of the State in which the service is 33 — This approach was explicitly recognised in particular in Gouda and in Commission v Netherlands (cited in footnote 30), as well as in Case C-76/90 Säger v Dennemeyer & Co. [1991] ECR I-4221, in which the Court, adopting for free- dom of services the same terminology as applied to free movement of goods, defined as 'imperative reasons relating 30 — Case 352/85 Bond van Adverteerders and Others v Nether- to the public interest' those which it had until then classi- lands State [1988] ECR 2085, at paragraph 32; also Case fied as reasons of general interest and reiterated the needs C-288/89 Stichting Colletieve Antennevoorziening Gouda worthy of protection. Considering, however, that right and Others v Commissariaat voor de Media [1991] ECR from its first judgments in the matter (see, for example, the I-4007, at paragraph 11, and Case C-353/89 Commission v judgment in Case 33/74 Van Binshergen v Bestuur van de Netherlands [1991] ECR I-4069, at paragraph 15; Case Bedrijfsvereniging voor de Metaalnijverheid [1974] ECR C-17/92 Federación de Distribuidores Cinematograficos 1299) the Court had considered measures restricting the ('Federine') v Estado Español et Unión de Productores de freedom to provide services as being justified by the general Cine y Televisión [1993] ECR I-2239, at paragraph 16; and, interest, it is quite clear that the judgments in Gouda, Säger finally, Svensson (cited in footnote 13), at paragraph 15. and Commission v Netherlands, far from innovating, merely make explicit the approach adopted and provide a fuller 31 — See, for example, Bond van Adverteerders, at paragraph 34, systematic and theoretical reconstruction of it. and Federine, at paragraphs 16 and 21.

31. All things considered, however, the case- It is unquestionable that a national provision law just cited has its own logic in that it clas- which provides for different treatment on the sifies as applicable without distinction (also) basis of nationality is formally discrimina- those national measures which, while sub- tory. 34 However, the classification of the jecting the exercise of a given activity to the same measure is less evident where the dif- requirement of residence or establishment, ference in treatment is based on the residence none the less apply to all persons intending or on the establishment of the provider of a to exercise that activity on the territory of service. While it is true that the Court has that Member State. In other words, the effectively found national provisions apply- Court considers as formally discriminatory ing different tax treatment according to place only those national provisions which lay of establishment to be discriminatory and down a different regime for foreign nationals consequently justifiable only under the dero- and/or providers of services Originating' in gation provided for by Article 56, 35 the another Member State. However, where the Court has also found national provisions legislation in question is intended to apply to subjecting the exercise of activities to the requirement of residence 36 or of establish- 37 — See, in particular, the 'Insurance' case (cited in footnote 24), at paragraphs 52 to 57, as well as Case C-101/94 Commis- sion v Italy [1996] ECR I-2691, at paragraph 31. I would add that in both cases the Court reached the conclusion 34 — See, to this effect, in this sense Case C-20/92 Hubbard (Tes- that the requirement of establishment was not indispensable tamentvollstrecker) v Hamburger [1993] ECR I-3777, at for attaining the objective pursued. paragraphs 14 and 15; and Case C-45/93 Commission v Spain [1994] ECR I-911, at paragraphs 9 and 10. 38 — In this sense, see, inter alia, Parodi (cited in footnote 5), in which the Court again underscored that the requirement of 35 — See, inter alia, Bond van Adverteerders (cited in footnote establishment 'has the result of depriving Article 59 of the 30), at paragraphs 26 and 29; Case C-211/91 Commission v Treaty of all effectiveness, a provision whose very purpose Belgium [1992] ECR I-6757, at paragraphs 9, 10 and 11; is to abolish restrictions on the freedom to provide services and Fedecine (cited in footnote 30), at paragraph 14. of persons who are not established in the State in which the 36 — See, for example, Van Binsbergen (cited in footnote 33) at service is to be provided'. The Court none the less added paragraph 14; and Case 39/75 Coenen and Others v Sociaal- that 'If such a requirement is to be accepted, it must be Economische Raad [1975] ECR 1547, at paragraphs 7 and 8 shown that it constitutes a condition which is indispensable and at paragraphs 9 and 10. for attaining the objective pursued' (paragraph 31).

In the circumstances, how one determines whether it falls into the 'formally discrimina- tory' category or into the 'applicable without The obvious consequence is that legislation distinction' category depends on where one which treats providers established in another puts the emphasis: on the fact that it is not Member State differently than those estab- directly discriminatory on grounds of estab- lished domestically can only be justified lishment or on the fact that, all things con- under the derogations provided for by the sidered, it is a measure laying down a differ- Treaty, whereas legislation directly denying ent regime depending on whether or not providers established in another Member insurance companies are established in Swe- State access to a given activity, precisely den. I would add that the most relevant case- because it requires them to be resident or law, that involving similarly structured pro- established in the State in which the service visions, is of no help here, on the contrary. is to be provided, may be justified by imperative reasons relating to the public interest. This result is, I admit, unsatisfac- tory, just as its underlying reasoning may be considered perverse; the fact remains, how- ever, that a measure requiring establishment in the matter of services is, formally of course, applicable without distinction. 33. This is firstly true of the judgment in Bachmann, a case which involved national rules making the deductibility of certain insurance contributions conditional on their being paid in the same State. The Court in fact considered that the rules be justified by the need to ensure national fiscal cohesion, thereby recognising it to be by nature appli- 32. N o w let us look at the measure at issue cable without distinction. It is worth stress- here. Clearly, it does not, at least not directly, ing that, to this end, the Court simply apply a different system for insurance com- recalled that 'the requirement of an establish- panies which are not established in Sweden. ment is compatible with Article 59 of the The difference in treatment applies in fact, at Treaty where it constitutes a condition which least formally, to the policyholders who are is indispensable to the achievement of the

34. It seems to me that a particular piece of legislation can be capable of justification either under the derogations expressly pro- vided for in the Treaty or on grounds relat- ing to the public interest, 42 depending on whether it is discriminatory or applicable without distinction. After all, even granted that it is not always easy to classify a given rule of national law — either because its dis- Although the Court would appear to have criminatory effects (in fact) are all too clear duly distanced itself from the Bachmann rul- or because the specific nature of a given ser- ing in its subsequent judgment in the Svens- vice demands greater caution — it stands to son case, which involved similar provisions, reason that there cannot and should not be a the latter judgment created a number of third category of measure (applicable with- uncertainties precisely on the point at issue out distinction and formally discriminatory here. In fact, in response to the contention of or applicable with distinction but not dis- the Luxembourg Government that the provi- criminatory). This case gives the Court an sion of national law concerned was necessary opportunity to clarify the issue by expressly to ensure fiscal cohesion, the Court pointed declaring whether the national legislation at out that 'the rule in question entails discrimi- issue is to be held to be discriminatory — nation based on the place of establishment' and thus capable of justification only on the and consequently 'can only be justified on basis of the derogations laid down in the the general interest grounds referred to in Treaty itself — or whether, being applicable Article 56(1) of the Treaty, to which Article without distinction, it is capable of justifica- 66 refers, and which do not include econ- tion also on grounds of overriding reasons omic aims'. 40 However, the Court, not with- relating to the public interest. out evident contradiction, none the less went on to address the merits of the Luxembourg Government's arguments and concluded 41 — As above, at paragraphs 16 to 18. that, conversely to its finding in Bachmann, 42 — It should, however, be noted here that it is not the first time that the Court has taken into consideration, with the aim of assessing the compatibility with Community law of a national provision restricting freedom to provide services, both the requirements specified in Article 56 and overriding reasons relating to the public interest (see, to this effect, 39 — Bachmann (cited in footnote 9), at paragraph 32. paragraphs 31 and 32 of the judgment in Commission v 40 — Svensson (cited in footnote 13), at paragraph 15. Italy, cited in footnote 37).

Firstly, the purported need to ensure effec- tive fiscal supervision obviously does not apply in this instance. Considering the char- acteristics and the rationale of the legislation 35. Applying the first approach to the at issue, as these were explained by the present case, it is sufficient to note here that Swedish Government itself, it must be recog- the national legislation at issue does not fall nised that the legislation bears no significant within any of the derogations provided for causal nexus to the objective pursued. in Article 56 of the Treaty, to which Article 66 refers. Moreover, it cannot be disputed that fiscal cohesion and effective fiscal super- vision, the grounds invoked by the Swedish Government, pursue an objective that is essentially economic, so that the measure in question can in no case be justified, and can- not therefore be declared compatible with Community law, on those grounds. 37. Nor do I believe that the national legisla- tion at issue can be justified by the need to ensure national fiscal cohesion: reference to the Bachmann case is certainly not sufficient for this purpose. It is quite true in fact that

43 — It should be noted that the Court recognised both effective fiscal supervision, in particular in Futura (cited in footnote 20) and the safeguarding of fiscal cohesion, in particular in Bachmann (cited in footnote 9), as being needs in the public 36. I do not believe that the conclusion interest. In this respect, see also my observations in the Opinion delivered on 16 September 1997 in Cases C-120/95 would be any different if the Court were t o (Decker) and C-158/96 (Kohll), in particular under para- decide, adopting the second approach, to graph 53.

Without going into the substance of this analysis, it is sufficient to note that the cir- cumstances of the present case are quite dif- ferent. Here in fact the discriminatory treat- ment lies in the modes of taxation, in that policyholders insured with companies estab- lished abroad are taxed on their premium payments, whereas policies issued by com- panies established in Sweden are taxed partly Lastly, it is worth emphasising that, subse- on the savings capital with the insurer and quently to the facts under examination, the partly on the yield paid to policyholders. law in dispute was substantially amended. This is done with the express aim, as the According to the applicant, this amendment referring court explains, 'of maintaining has introduced an undifferentiated system competitive neutrality between domestic and for the taxation of insurance policy yields foreign savings policies'. However, the pro- received by policyholders; it thus applies ceeds of the premium tax do not appear to irrespective of the place of establishment of be applied in a manner which is relevant in the insurance company. This fact, which can the sense of the Bachmann ruling; nor do be interpreted in only one way, is significant they seem to be used to offset advantages to say the least.

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Conclusion

39. In the light of the foregoing, I propose that the Court answer the question referred to it by the Länsrätt i Kopparbergs Län as follows:

Article 59 of the Treaty is to be interpreted as precluding legislation of a Member State which taxes premiums paid by resident policyholders under life assurance policies contracted with an insurer established in another Member State, even where that tax can be reduced to zero or b y half if the insurance company established abroad is subject, in its home State, to revenue tax which is comparable to that charged on savings policies issued by domestic insurance companies.