C-8/96

LOCAMION v DIRECTEUR DES SERVICES FISCAUX D'INDRE-ET-LOIRE

J U D G M E N T O F T H E C O U R T (Sixth Chamber) 11 December 1997*

In Case C-8/96,

R E F E R E N C E to the Court under Article 177 of the EC Treaty by the Tribunal de Grande Instance de Tours (France) for a preliminary ruling in the proceedings pending before that court between

Locamion SA

and

composed of: H . Ragnemalm (Rapporteur), President of the Chamber, G. F. Man- cini, P. J. G. Kapteyn, J. L. Murray and G. Hirsch, Judges,

Advocate General: G. Cosmas, Registrar: D. Louterman-Hubeau, Principal Administrator,

after considering the written observations submitted on behalf of:

— Locamion SA, by Jean-Claude Cavaillé, of the Lyons Bar,

— the French Government, by Catherine de Salins, Deputy Director in the Legal Affairs Directorate of the Ministry of Foreign Affairs, and Frédéric Pascal, seconded to that directorate from the central administration, acting as Agents,

— the Commission of the European Communities, by Hélène Michard and Enrico Traversa, of its Legal Service, acting as Agents,

Judgment

1 By judgment of 4 January 1996, received at the Court on 15 January 1996, the Tribunal de Grande Instance (Regional Court), Tours, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty two questions on the inter- pretation 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 73/79/EEC of 9 April 1973 varying the field of application of the reduced rate of capital duty provided for in respect of certain company reconstruction operations by Article 7(1)(b) of the directive concerning indirect taxes on the raising of capital (OJ 1973 L 103, p. 13), by Council Directive 73/80/EEC of 9 April 1973 fixing common rates of capital duty (OJ 1973 L 103, p. 15), by Council Directive 74/553/EEC of 7 November 1974 amending Article 5(2) of Directive 69/335 (OJ 1974 L 303, p. 9), and by Council Directive 85/303/EEC of 10 June 1985 amending Directive 69/335 (OJ 1985 L 156, p . 23; hereinafter 'the Directive').

2 Those questions were raised in proceedings between Locamion SA (hereinafter 'Locamion') and the Directeur des Services Fiscaux d'Indre-et-Loire (Head of the Indre-et-Loire Tax Office) concerning payment of the regional charge on vehicle registration certificates (hereinafter 'the registration charge').

3 The Directive is aimed in particular at achieving harmonization of the factors involved in the fixing and levying of capital duty in the Community, by means of the elimination of tax obstacles which interfere with the free movement of capital.

(a) in respect of the transactions referred to in Article 4;

(b) in respect of contributions, loans or the provision of services, occurring as part of the transactions referred to in Article 4;

(c) in respect of registration or any other formality required before the commence- ment of business to which a company, firm, association or legal person operat- ing for profit may be subject by reason of its legal form'.

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LOCAMION Y DIRECTEUR DES SERVICES FISCAUX D'INDRE-ET-LOIRE

7 Article 12(1) of the Directive sets out an exhaustive list of taxes and duties other than capital duty which, notwithstanding Articles 10 and 11, may affect capital companies in connection with the transactions referred to in the latter provisions (see, to that effect, Case 36/86 Ministeriet for Skatter og Afgifter v Dansk Sparin- vest [1988] E C R 409, paragraph 9, and Joined Cases C-71/91 and C-178/91 Ponente Carni and Cispadana Costruzioni [1993] E C R 1-1915, paragraph 24).

JUDGMENT OF 11. 12. 1997 — CASE C-8/96

1 1 Pursuant to Article 1599(o), the issue of registration certificates for automobiles and all other motor vehicles is subject to payment of a proportional charge, of which the rate per unit of horse power, laid down by the Region concerned, is determined each year by decision of the Regional Council. The unit rate is reduced by one-half for commercial vehicles with a total authorized weight when loaded exceeding 3.5 tonnes, non-agricultural tractors and motorcycles. Lastly, in both cases, the rate is reduced by one-half for vehicles which are more than 10 years old.

12 According to the order for reference, by resolution of its extraordinary general meeting of 30 June 1992, Locamion proceeded to carry out a merger which involved taking over France Location. This entailed the transfer of all that compa- ny's assets and liabilities to Locamion, including a large fleet of vehicles.

1 3 As the purchaser of those vehicles, Locamion applied to the Prefect of the départe- ment in which its Tours establishment is located for the 1 698 vehicles which it had just acquired as a result of the aforementioned transaction to be registered in its name. Following the issue of the 1 698 log books, Locamion was asked to pay FF 2 391 761.

1 4 Locamion claimed reimbursement of that sum on the ground that the registration charge was contrary to the Directive. By decision of 26 January 1994 the Directeur des Services Fiscaux d'Indre-et-Loire rejected that claim.

15 Locamion thereupon brought proceedings against the latter before the Regional Court for reimbursement of the charges paid, less the fixed charge corresponding to the pro rata unit rate, on the ground that the levying of the proportional regis- tration charge in connection with a merger is incompatible with the Directive.

18 Pursuant to Article 61 of its Rules of Procedure, the Court does not consider it necessary in the present case to reopen the oral procedure.

19 As regards the first question, all the parties who have lodged written observations maintain that merger/take-over transactions are covered by the Directive. They refer in that connection to the judgment in Joined Cases C-197/94 and C-252/94 Bautiaa and Société Française Maritime [1996] ECR 1-505.

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JUDGMENT OF 11. 12. 1997 — CASE C-8/96

20 It is clear from paragraph 34 of the judgment in B auttaa and Société Française Maritime that the merger transactions at issue in that case constituted an increase in the capital of a capital company by contribution of assets of any kind, within the meaning of Article 4(1)(c) of the Directive, in the particular circumstances referred to in Article 7(1)(b), that is to say, the transfer by one or more capital companies of all of their assets and liabilities to one or more capital companies which are in the process of being formed or which are already in existence.

21 However, the facts related to the Court in the order for reference do not enable it to be determined with a sufficient degree of precision whether the merger/take- over transaction at issue in the main proceedings may be regarded as having entailed an increase in Locamion's capital, as required by Article 4(1)(c) of the Directive.

26 It s h o u l d b e b o r n e in m i n d t h a t indirect taxes w i t h t h e s a m e characteristics as capi- tal d u t y fall w i t h i n t h e scope of Article 10 of t h e D i r e c t i v e .

27 So far as c o n c e r n s Article 10(a) of t h e Directive, it m u s t b e d e t e r m i n e d w h e t h e r t h e registration charge in effect taxes, directly or indirectly, a t r a n s a c t i o n w h i c h , p u r s u - ant t o Articles 4(1)(c) a n d 7(1) of the D i r e c t i v e , m u s t in principle b e e x e m p t e d from all capital duty.

28 The levying of the registration charge is governed by different rules, depending on the situation which gives rise to the issue of a registration certificate. If levied on a transfer, the charge is pro rata, but in the majority of other cases, only a fixed unit rate is applied.

29 Accordingly, Locamion and the Commission maintain that, in the present case, the event which gives rise to the proportional registration charge is the merger/take- over transaction, with the result that the charge constitutes a financial charge which indirectly taxes the raising of capital and is therefore caught by the prohibi- tion laid down by Article 10 of the Directive.

30 It should be noted that, in contrast to the view taken by Locamion and the Com- mission, the event giving rise to the registration charge is the issue to the owner of

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LOCAMION v DIRECTEUR DES SERVICES FISCAUX D'INDRE-ET-LOIRE

a partnership as a capital company (see Case C-2/94 Denkavit Internationaal and Others [1996] E C R I-2827, paragraphs 23 to 26). The registration charge cannot therefore be linked to formalities to which companies may be made subject by reason of their legal form.

35 It follows that the characteristics of the registration charge differ from those of the taxes prohibited under Article 10 of the Directive.

36 Accordingly, there is no need to consider the second part of the question concern- ing Article 12 of the Directive.

37 The answer to the second question must therefore be that Article 10 of the Direc- tive is to be interpreted as not precluding a tax such as the vehicle registration charge.

in answer to the questions referred to it by the Tribunal de Grande Instance de Tours by judgment of 4 January 1996, hereby rules:

Article 10 of Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital, as amended by Council Directive 73/79/EEC of 9 April 1973 varying the field of application of the reduced rate of capital duty provided for in respect of certain company reconstruction operations by Article 7(1)(b) of the directive concerning indirect taxes on the raising of capi- tal, by Council Directive 73/80/EEC of 9 April 1973 fixing common rates of capital duty, by Council Directive 74/553/EEC of 7 November 1974 amending Article 5(2) of Directive 69/335, and by Council Directive 85/303/EEC of 10 June 1985 amending Directive 69/335, must be interpreted as not precluding a tax such as the regional charge on vehicle registration certificates.

Ragnemalm Mancini Kapteyn

Murray Hirsch

Delivered in open court in Luxembourg on 11 December 1997.

R. Grass H . Ragnemalm Registrar President of the Sixth Chamber