C-152/97

AGAS v AMMINISTRAZIONE TRIBUTARIA DI MILANO

OPINION OF ADVOCATE GENERAL COSMAS delivered on 25 June 1998

Contents

I — Preliminary remarks I - 6556

II — Legal background I - 6556

A — Community law I - 6556

(a) Non-application of Article 7(1 )(b) to the merger by acquisition of one company by another company which already owns the entire capital of the former I - 6570

(b) Council Directives 78/855/EEC and 90/434/EEC I - 6574

C — Whether the Italian registration duty levied in the event of a merger is compatible with Article 7(1 )(b) of Directive 69/335, as amended I - 6580

VI — Conclusion I-6581

* Original language: Greek.

I - 6555

2 — OJ 1985 L 156, p. 23. 3 — Articles 5 and 6 of Directive 69/335 lay down the basis of 1 — OJ, English Special Edition 1969 (II), p. 412. assessment of the duty in question.

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6. In particular, pursuant to Article 4(1 )(c) 8. Article 5 defines the amount on which and (d), the following transactions are subject duty is payable, which is generally either the to capital duty: actual or the nominal value of the contribu­ tion.

'(c) an increase in the capital of a capital com­ pany by contribution of assets of any kind;

9. In addition, Article 7 of Directive 69/335 originally laid down a range of rates within (d) an increase in the assets of a capital com­ which Member States were free to set the pany by contribution of assets of any rates applying on their territory, and provided kind, in consideration, not of shares in for the mandatory or optional application of the capital or assets of the company, but preferential rates depending on the type of of rights of the same kind as those of transaction being taxed. members, such as voting rights, a share in the profits or a share in the surplus upon liquidation'.

'1 . Member States shall exempt from capital duty transactions, other than those referred to in Article 9, which were, as at 1 July 1984, exempted or taxed at a rate of 0.50% or less.

13. Specifically, Article 7(1) of Directive 69/335 provided as follows in relation to capital duty:

The exemption shall be subject to the condi­ tions which were applicable, on that date, for the grant of the exemption or, as the case may be, for imposition at a rate of 0.50% or less. '1 . Until the entry into force of the provi­ sions to be adopted by the Council in accor­ dance with paragraph 2:

(a) ...

2. Member States may either exempt from capital duty all transactions other than those referred to in paragraph 1 or charge duty on (b) this rate shall be reduced by 50% or more them at a single rate not exceeding 1%. when one or more capital companies transfer all their assets and liabilities, or one or more parts of their business to one or more capital companies which are

7 — Point 31 of my Opinion in Joined Cases C-197/94 and 3. ...' C-252/94 [1996] ECR 1-505.

(a) in respect of the transactions referred to — the companies taking part in the transac­ in Article 4; tion have their effective centre of manage­ ment or their registered office within the territory of a Member State;

...' (c) ...' (my italics).

14. In accordance with its final recital, Direc­ tive 69/335 also provides for the abolition of 16. Article 12(1) of Directive 69/335 sets out other indirect taxes with the same character­ an exhaustive list of taxes and duties other istics as capital duty or stamp duty on securi­ than capital duty which, in derogation from ties, the retention of which might frustrate Articles 10 and 11, may be levied on capital

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companies in connection with the transac­ levying of registration duty... shall be reviewed tions referred to in those Articles. 8 and brought into line with the Directive of the Council of Ministers of the European Community of 17 July 1969 concerning indi­ rect taxes on the raising of capital'.

8 — See in this regard Case C-2/94 Denkavit Internationaal and 9 — Approval of the consolidated text of the provisions on reg- Others [1996] ECR I-2827, paragraph 21, and Case 36/86 istration duty [Supplemento ordinario alla Gazzetta ufficiale Dansk Sparinvest [1988] ECR 409, paragraph 9. della Repubblica italiana (GURI) of 30 April 1986, No 99].

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23. Article1 of Presidential Decree (b) mergers between companies, divisions of No 131/86, entitled 'Attachment of registra­ companies and similar transactions tion duty', provided as follows: effected by bodies other than companies: 1%.

'In the case of mergers between companies of whatever type, the basis of assessment shall consist of the amount, shown in the balance

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OPINION OF MR COSMAS — CASE C-152/97

sheets referred to in Article 2502 of the Civil azioni') incorporated under Italian law, and Code, of the capital and reserves of the merged primarily engaged in the production and dis­ companies or, if the merger is effected by tribution of methane gas. 10 acquisition, of the acquired companies.'

HI — Facts

30. Agas held the entire capital of Briangas- SpA (hereinafter 'Briangas'), also a joint stock 29. Abruzzi Gas AGAS SpA (hereinafter company, and Italgasdotti Serio Srl, a limited 'Agas') is a joint stock company ('società per Lability company (hereinafter 'Italgasdotti').

1996. It is for this reason that disputes involving registra- tion duty charged on mergers relate only to deeds drawn up sion stated that Agas was the parent company before that date, as in the present case. It is interesting to read the statement of the reasons for and that Briangas and Italgasdotti were its Decree-Law No 323/96, which the Commission cites in its written observations. The report relating to this Decree-Law subsidiaries.

32. The general meetings of shareholders and take the form of mergers, divisions or transfers of businesses members of these companies decided on their entailing only a regrouping or reorganisation of productive entities in order to rationalise corporate structures (termed merger: Agas would absorb Briangas and Ital- "cascade" taxation). gasdotti. The Member States of the European Union have brought their legislation into line with these Community rules; in particular, France recently introduced a flat-rate duty of 1 220 francs for such transactions in place of the propor- tional duty of 1.20% (the Court of Justice of the European Communities having ruled in the judgment delivered on 13 February 1996 in Joined Cases C-197/94 and C-252/94 that the latter was incompatible with the Community directives). The Italian State, by contrast, has not yet come into line with these directives, since the proportional rate of 1% is still applicable to such transactions; it has therefore deprived the legal order of an instrument of fundamental importance 33. During the oral procedure, the Italian for the rationalisation of productive structures, in contraven- tion of Community rules which, on account of their binding Government stated that prior to the merger nature, are considered to be directly applicable in the Member Agas had acquired all stocks and shares in States and which, as such, have permitted the tax courts to consider the exemption applicable in some cases, despite the Briangas and Italgasdotti, but had not thereby fact that it has not been incorporated into national legisla-

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AGAS v AMMINISTRAZIONE TRIBUTARIA DI MILANO

dotti by paying the corresponding amounts, 38. On 11 July 1996 Agas applied to the and subsequently absorbed both companies. Ufficio del Registro for reimbursement of the registration duty paid, together with interest. 1 It maintained that the national provision 1on the basis of which this duty had been charged was contrary to Articles 4 and 7 of Directive 69/335, as amended, which make provisions for tax concessions — entailing the charging 34. The merger contract was concluded on of registration duty at the flat rate — in 20 December 1994 and registered on respect of certain capital transactions such as 12 28 December 1994 at the Ufficio del Registro mergers by acquisition. Atti Pubblici (Public Documents Registration Office; hereinafter the 'Ufficio del Registro'), Milan.

39. The Ufficio del Registro did not respond. Surmising that its request had been rejected, Agas brought an action on 13 November 1996 before the Commissione Tributaria Provin­ 35. The merger did not entail any increase in ciale di Milano. the capital of Agas but its shares in Briangas and Italgasdotti — companies which it already owned — were cancelled.

IV — Question referred for a preliminary ruling

36. As a result of the merger, Briangas and Italgasdotti transferred assets to Agas with a net value of LIT 1 439 682 051 and LIT 22 105 502 520 respectively. 40. The Commissione Tributaria Provinciale di Milano, considering that the interpretation of the applicable Community provisions needed to be clarified in order to resolve the

43. As regards the question asked by the national court — whether the provisions of Directive 69/335, as amended, apply to the merger by acquisition of one company by V — Reply to the question referred for a another company which already owns 100% preliminary ruling of the capital of the former and, consequently, whether national legislation (in the present case, Italian legislation) is compatible with Directive 69/335 — I believe that the fol­ lowing method of analysis should be adopt­ 13 ed. First, it is necessary to determine whether Directive 69/335 covers a transaction such as 41. It must first be pointed out that the the one to which the dispute in the main pro­ national court, in its succinct order for refer­ ceedings relates and which gave rise to the ence, does not specify which provisions of charging of registration duty, and to classify Community law it is asking the Court to this transaction in the light of the directive interpret. Nevertheless, from the facts in the (A). If we conclude that such a transaction present dispute and the legal points raised, it does indeed fall within the scope of the direc­ can be deduced that in essence the national tive, as defined more specifically in Article 4, court seeks an interpretation of Articles 4(1 )(c) we shall then examine whether, under Com­ and 7(1 )(b) of Directive 69/335, as amended munity law, it qualifies for the preferential by Directive 85/303. treatment provided for in Article 7(1 ) of Direc­ tive 69/335, as amended (B). Finally, we shall ascertain whether the rate of duty laid down in the disputed provision of Italian law is compatible with Directive 69/335, as amended (C). 42. It should next be observed that both Agas and Briangas are joint stock companies (società per azioni) incorporated under Italian law. 13 — With regard to the method of analysis to be followed, we Italgasdotti is a limited liability company can refer to the guidance provided by the Court in Bautiaa and Société Française Maritime (cited in footnote 7 above, at (società a responsabilità limitata). Conse­ paragraph 31).

48. As for the problem of applying Directive 69/335 to mergers between companies, the Court held in Bautiaa and Société Française 45. The Commission, by contrast, maintains 14 Maritime that although company mergers that a merger by acquisition of this kind is are not expressly mentioned among the 'trans­ covered by Article 4(1 )(c) of Directive 69/335 actions ... subject to capital duty' listed in and that, moreover, it must be exempted from Article 4, they none the less fall within the capital duty, as provided for under scope of that provision. The Court stated Article 7(1 )(b) of Directive 69/335, as amended, even if consideration does not con­ sist exclusively of the issue of shares to the shareholders of the companies acquired. 14 — The order for reference uses the term 'merger'.

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51. Furthermore, in paragraph 37 of the judg­ ment in Bautiaa and Société Française Mari- time the Court held that '[i]t follows that, in the two disputes in the main proceedings, the transaction whereby the company acquired capitalised its reserves merely constituted a capital-raising transaction which was not com­ 50. In paragraph 36 of its judgment in Bau- pleted, for the purposes of the application of tiaa and Société Française Maritime, the Court the directive, until the acquiring company's also stated: '[fjirst, the term "merger", as used capital was increased by the contribution to it in the national provision, clearly refers to a of the assets of the company acquired; [i]t is only when the amalgamation of the two com­ panies is finally completed that the criterion 15 — At paragraph 34. See also Case C-8/96 Locamion v Directeur of the strengthening of economic potential is des Services Fiscaux d'Indre-et-Loire [1997] ECR 1-7055, paragraph 20. In Bautiaa and Société Française Maritime, the fulfilled and the levying of capital duty, at the company acquired (SNMTP) had transferred to the acquiring rate fixed by Article 7(1 )(b) of Directive company (Bautiaa) under the merger its entire assets in con­ sideration for the allocation of 142 new shares in Bautiaa. 69/335, is justified' (my italics).

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ÄGAS v AMMINISTRAZIONE TRIBUTARIA DI MILANO

52. In paragraph 38 the Court reached the and Agas's capital increased, and whether the following conclusion: '[i]t would appear, economic potential of the acquiring company therefore, that transactions of the type at issue was strengthened. in the main proceedings fall within the scope of Directive 69/335, and that they must be examined in the light of Article 4(1 )(c) of that directive (increase of capital by contribution of assets of any kind), with the ensuing con­ sequences as regards the application of the rate of capital duty payable under Article 7(1), as amended by Directive 85/303'.

56. Clearly, the merger effected by means of 16 — See, for example, Bautiaa and Société Française Maritime the acquisition of Briangas and Italgasdotti (cited in footnote 7 above, paragraph 36) and Case 270/81 Felicitas [1982] ECR 2771, paragraph 16, and the later judg- by Agas did not entail any increase in the lat- ments in Dansk Sparinvest (cited in footnote 8 above, para- graphs 13 and 14) and Deltakabel (cited above, paragraph ter's capital, as required by Article 4(1 )(c) of 14). 19 Directive 69/335. 17 — According to French legal writings and case-law, a merger has three characteristics: (a) it leads to the complete transfer of both the assets and the liabilities of the company acquired to the acquiring company; (b) it entails the dissolution of at least one of the companies involved; (c) it entails the alloca- tion of new shares as consideration for the injections of 18 — See, for example, J. Hémard, F. Terré and P. Mabilat, Sociétés capital; sec, for example, J.-P. Bertrel and M. Jeantin, Acqui- Commerciales, Vol. 3, Paris, Dalloz, 1978, paragraph 780, sitions et fusions des sociétés commerciales, Paris, Litec, 2nd p. 596. ed., 1991, pp. 331—341, paragraphs 776—797. 19 — See Locamion, cited in footnote 15 above, paragraph 21.

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57. However, it must not be overlooked that directive, the Court has held that certain the contribution of the net assets of Briangas transactions are subject to capital duty, even 20 and Italgasdotti to Agas, albeit not entailing if they do not entail any increase in the com­ any increase in the share capital of the 24 pany's share capital (see Siegen, Deltaka- acquiring company, nevertheless led to an bel, 25 Trave Schiffahrts-gesellschaft 26 and Fre- 'increase in its assets' and, in any event, deriksen 27 ). strengthened its economic potential, given that the merger transaction is 'likely to increase the value of the company's shares' as a result of the contribution of the assets of the com­ 21 panies acquired.

23 — This was permitted by Article 4(2)(b) (cited above) of Direc- tive 69/335. 24 — Case C-38/88 [1990] ECR I-1447, paragraph 13; in that case, the Court held, inter alia, that when a company has incurred 59. Clearly, the case-law shows that the losses which one of its shareholders agrees to absorb, that shareholder thereby increases the company's assets within increase in the economic potential of a com­ the meaning of Article 4(2)(b) of Directive 69/335. pany is an essential precondition for applying 25 — A judgment (cited above in paragraph 50) in which the Court found that where a parent company waives all or part of its the provisions of Directive 69/335. However, claim against a subsidiary and thereby relieves it of a liability, on the basis of a particular provision of that capital duty may be levied under Article 4(2)(b) of Direc- tive 69/335. 26 — In this judgment (Case C-249/89 [1991] ECR I-257) the Court ruled that Article 4(2)(b) of Directive 69/335 allows Member States to charge capital duty on an interest-free loan granted by a member of a heavily over-indebted capital 20 — This contribution amounted to approximately LIT 23.6 bil- company to that company on the basis of the loan's utility lion. value, that is to say, the amount of interest saved, which is 21 — See Case C-287/94 Frederiksen v Skatteministeriet [1996] to be determined by the national court. ECR1-4581, paragraph 13. 27 — In this judgment (cited in footnote 21 above), the Court 22 — By way of example, the Commission refers to the land, ruled that where a subsidiary benefits from an interest-free buildings, plant, stocks, patents, claims and bank accounts of loan from its parent company, Article 4(2)(b) of Directive the companies acquired. 69/335 is applicable to the amount of interest saved.

63. Furthermore, as can be deduced from Article 4(1)(c) and Article 4(1)(d) of Directive 69/335, read together, consideration for con­ 29 — See point 36 of my Opinion in Locamion (cited in footnote above)) and point 22 and footnote 16 of my Opinion in 15 above tributions of assets which lead to an increase Bautiaa and Société Française Maritime (cited in footnote 7 above). in capital must consist in the allocation of 30 — It should be remembered that company assets, as distinct from company capital, are subject to fluctuations which may possibly, but not necessarily, lead to an increase in capital; see, for example, G. Vuillermet, 'Droit des sociétés commer- ciales', 3rd ed. of the work by G. Hureau, in the collection 28 — In contrast to the Court's finding on the facts of Locamion Sciences économiques commerciales. Vol. 1, Paris, Dunod, above,, paragraph 23 (cited in footnote 15 above ). 23). 1969, pp. 35-37.

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66. To my mind, it cannot be deduced from sition of one company by another company the foregoing that, in accordance with Bau- which already owns the entire capital of the 'tiaa and Société Française Maritime, former. Article 4(1 )(c) of Directive 69/335 automati­ cally applies to any merger or contribution of assets by one company to another as part of a merger. For a merger to be subject to the latter provision, it is necessary, inter alia, that there be an increase in capital and that the consideration for the contribution of capital (a) Non-application of Article 7(1 )(b) to the be shares representing the capital. merger by acquisition of one company by another company which already owns the entire capital of the former

70. The Italian Government maintains that Community law, and in particular Directive 69/335, does not prevent the application of a B — The application of Article 7(1)(b) of national measure providing for the payment Directive 69/335, as amended by Directive of duty in such a case. More precisely, it 85/303 begins by observing that the merger entailed no increase in the capital of Agas and asserts that Article 7 of Directive 69/335, as amended by Directive 85/303, is not applicable, since an essential condition has not been satisfied, namely that shares be allocated in consider­ ation of the contribution of capital. In the 68. As a secondary consideration, and solely view of the Italian Government, it was there- for the sake of completeness, I shall now examine whether it is possible to apply Article 7(1 )(b) of Directive 69/335, as amended 31 — Cf. Bautiaa and Société Française Maritime (cited in foot­ by Directive 85/303, to the merger by acqui­ note 7 above), which came before the Court earlier.

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AGAS v AMMINISTRAZIONE TRIBUTARIA DI MILANO

fore correct to charge the proportional duty cle 7(1) of the Directive applies equally in provided for in national legislation. cases where, by reason of the absolute con­ trol exercised by the acquiring company over the companies acquired, no shares are issued or — obviously — allocated by the acquiring 32 company.

72. In the present case, however, the consid­ eration for the acquisition of Briangas and Italgasdotti by Agas did not consist in the 75. Directive 69/335 therefore provides for allocation of shares, since the merger entailed capital which has been raised to be subject to no increase in the capital of the acquiring company but only the cancellation of its share­ holdings in the companies acquired, which already appeared on the assets side of its bal­ 32 — In Bautiaa and Société Française Maritime (cited in foot- note 7 above), no mention is made of the second indent of ance sheet. Article 7(1)(b) of Directive 69/335, since it was not material to the dispute pending before the national court. It should be remembered that in Bautiaa and Société Française Mari- time the company acquired (SNMTP) had transferred its entire assets to the acquiring company (Bautiaa) under the terms of the merger and that the consideration for the con- tribution had been the allocation of 142 new shares in Bau- tiaa with a nominal value of FF 142 each. Consideration for the transfer to Bautiaa had therefore been made by allo- cating shares. 33 — See especially Denkavit Internationaal and Others (cited in 73. The specific nature of the overall proce­ footnote 8 above, paragraph 16 et seq.) and Joined Cases C-71/91 and C-178/91 Ponente Carni and Cispadana Cos- dure followed by Agas led the national court truzioni v Amministrazione delle Finanze dello Stato [1993] to ask the Court of Justice whether the exemp­ ECR I-1915, paragraph 19 et seq. and Case 161/78 Con- radsen v Ministeriet for Skatter og Afgifter [1979] ECR 2221, tion from capital duty provided for by Arti­ paragraph 11.

76. Article 7(1) of Directive 69/335 states that the rate of capital duty is to be reduced by 50% or more when one or more capital com panies transfer all their assets and liabilities, or one or more parts of their business to one or more capital companies which are in the 78. From the abovementioned provisions, process of being formed or which are already interpreted in conjunction with one another, in existence. The same provision also states it emerges that the Community legislature that the reduction in the rate of duty — or, did not wish to apply this more favourable after the amendment introduced by Directive system of exemptions to the acquisition of 85/303, the exemption from capital duty — is one capital company by another and hence to to be subject to the condition that the con- cases in which the consideration for a capital sideration for the contributions shall consist contribution is the allocation of shares together exclusively of the allocation of shares in the company or companies, although Member with payment in cash of more than 10% of States shall have the right to extend applica their nominal value. tion of the reduction (or exemption) to cases in which the consideration for contributions consists of the allocation of shares in the 35 — The need for provisions derogating from a general principle company or companies together -with a pay to be interpreted strictly is also evident from the case-law of the Court on cases interpreting legislation on the taxation ment in cash not exceeding 10% of the nom and exemption of certain transactions. For example, the Sixth

77. Article 7(1)(a) therefore sets the rate of patible with the objective of that provision. As the Court has further stated (see Case 107/84 Commission v Germany capital duty and Article 7(1)(b) expressly gov [1985] ECR 2655, paragraph 17, and Case 348/87, cited above, paragraph 12), 'Article 13 of the Sixth Directive does not erns when the rate is to be reduced by way provide exemption for every activity performed in the public interest, but only for those which are listed and described in of exception, or, after the amendment intro

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79. In my opinion, those provisions also dem­ taxes and duties other than capital duty which, onstrate a fortiori that the Community legis­ in derogation from Articles 10 and 11, may lature did not wish this more favourable affect capital companies in connection with system of exemptions to apply to cases in the transactions referred to in Articles 10 and 36 which no shares at all are allocated in consid­ 11'. Consequently, Article 12 authorises the eration for capital contributions for the reason charging of duties which in principle are pro­ that, at the time of a merger by acquisition, hibited, that is to say, which in principle fall the acquiring company owns all the shares of within the scope of Articles 10 and 11. the companies acquired, having purchased them prior to the merger. The application of this regime to cases of that kind would be contrary to the purpose of the provision in question, which is to promote the free move­ ment of capital by facilitating the regrouping and development of undertakings.

83. Since the registration duty at issue does 37 not fall within the scope of Directive 69/335, such taxation is not incompatible with that Directive. It is unnecessary, therefore, to deter­ mine whether or not the charge falls within 38 the scope of Article 12. 80. The Italian Government points out that Article 12(1)(c) of Directive 69/335 expressly provides for Member States to levy the duty by way of derogation from Articles 10 and 11 thereof.

85. In my Opinion in Bautiaa and Société 3 Française Maritime, I pointed out 9that the term which the national courts used to describe the taxed transactions ('merger transactions') did not appear at all in Directive 69/335. I considered, however, that this was of no importance. Indeed, what was important in 88. On the basis of the interpretation of these that case was that the transactions at issue two directives, the Commission concludes had the same essential characteristics as those that, in listing the transactions exempted from covered by Article 7(1)(b) of the Directive in capital duty, the Community legislature its original version. omitted to include the merger by acquisition of one company by another company which already owns all of the capital of the former, because such cases were not sufficiently fre­ quent when Directive 69/335 was adopted.

90. First of all, it should be pointed out that Chapter IV of Directive 78/855, which estab­ lishes rules applicable to mergers between 93. In practical terms, under Articles 5(1) and companies, lays down specific provisions (2)(b), (c) and (d) of Directive 78/855: relating to the 'acquisition of one company by another which holds 90% or more of its shares'; to my mind, therefore, it also applies to cases where the acquiring company holds 100% of the capital of the companies acquired.

'1 . The administrative or management bodies 91. More specifically, Article 24 of Directive of the merging companies shall draw up draft 78/855 provides as follows: terms of merger in writing.

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2. Draft terms of merger shall specify at least: 94. Moreover, Article 19(1)(b) of Directive 78/855 provides that:

(a) ... '1 . A merger shall have the following conse­ quences ipso jure and simultaneously:

(a) ...

(b) the share exchange ratio and the amount of any cash payment;

96. On the other hand, I am not opposed in 98. A provision which, in my opinion, theory to the Commission's assertion that an deserves special attention is Article 2(a), which examination of Community legislation (Direc­ contains definitions of the three types of tive 78/855 as well as Directive 69/335) leads merger to which Directive 90/434 applies. The us to conclude that the absence of express first and third types, which interest us most 45 provisions governing the merger of one com­ because they concern merger by acquisition, pany with another which owns it entirely is are defined as follows: perhaps, due to the fact that in practice such cases were not sufficiently frequent to war­ rant express action by the legislature or a spe­ cial chapter in Directive 78/855. Obviously, as its title indicates, Chapter IV of Directive 78/855 contains provisions relating to the acquisition of companies in which the '[flor the purposes of this Directive: acquiring company already holds 100% of 43 the shares and provisions relating to the acquisition of companies in which the acquiring company does not hold all the capi­ 44 tal. (a) "merger" shall mean an operation whereby:

— one or more companies, on being dis­ 97. Directive 90/434 gives specific and special solved without going into liquidation, treatment to the acquisition of a company transfer all their assets and liabilities to which is 100% controlled by another. This is another existing company in exchange significant, given that Directive 90/434 con­ for the issue to their shareholders of cerns the tax system applicable, inter alia, to securities representing the capital of mergers and in accordance with Article 4(1) is that other company, and, if applicable, intended to exempt from taxation capital gains a cash payment not exceeding 10% of calculated by reference to the difference the nominal value, or, in the absence between the real values of the assets and of a nominal value, of the accounting liabilities transferred and their values for tax par value of those securities, purposes.

102. However, I do not see any need to 100. In both cases, the Community legisla­ qualify the conclusion which I have reached ture provided that in consideration for the with regard to the interpretation of transfer of all the assets and liabilities of the Article 7(1 )(b) of Directive 69/335, in its orig­ companies acquired the shareholders of the inal version, even in the light of the provi­ former companies would be allocated shares sions and definitions (of the merger by acqui­ in the acquiring companies and, where appli­ sition of one company by another) in cable, a payment in cash not exceeding 10% Directives 78/855 and 90/434, which are more of the nominal value of the shares. However, recent and more detailed. I do not believe this provision applies only to cases in which that the method whereby the legal concepts the acquiring company does not hold all, in contained in one text are interpreted in the other words 100%, of the capital of the com­ light of another, and in particular whereby panies acquired. the concepts set out in one directive (69/335) 46 are transposed into another (90/434), is suf­ ficient in the present case to affect my find­ ings.

46 — The judgment in Case C-164/90 Muwi Bouwgroep vStaatssec- retaris van Financiën [1991] ECR I-6049 concerned the defi- 101. Similarly, where the acquiring company nition of a 'part of a business' transferred by one company holds all the capital of the company acquired, to another in the context of Article 7(1 )(b) of Directive 69/335. In paragraphs 16 and 17 of his Opinion, Advocate Directive 90/434 provides a specific definition General Jacobs interpreted this concept from Directive 69/335 in the light of the definition given in Article 2(a) of which, as the Commission rightly points out, Directive 90/434. Without referring expressly to the latter differs from the first definition in one funda­ provision, the Court replied to this question by analysing the provision of Directive 69/335 as a whole (paragraph 20 mental respect: the elements characterising of the judgment; see also paragraphs 21 and 22).

107. In the light of the foregoing consider­ ations, I am led to conclude that, even if the Court were to rule that the merger by acqui­ sition of one company by another company 105. As regards the grounds for exemption which already holds all the capital of the from capital duty under Article 7(1 )(b) of former falls within the scope of Directive Directive 69/335, the Court has ruled 47 that 69/335, and more specifically within that of 'it is apparent from the preambles to those Article 4(1 )(c), this transaction could not be directives 48 that the purpose of the fiscal exempt from capital duty because it does not derogation is to avoid transfers of assets satisfy the conditions laid down in between companies being impeded by tax Article 7(1 )(b) of that Directive. A different obstacles, in order to facilitate the reorganisa­ solution would open the door to possible deviations from the underlying objective,

47 — See the judgment in Case C-50/91 Commerz-Credit-Bank v Finanzamt Saarbrücken [1992] ECR1-5225, paragraph 11. 49 — Regardless of whether such a transaction consists in 'the 48 — Directive 69/335 and Directives 73/80 and 85/303 amending grouping within one undertaking of various entities carrying it. on identical or complementary activities'.

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OPINION OF MR COSMAS — CASE C-152/97

which was to make only certain capital con­ registration charge of 1 % and the French reg­ tributions subject to the more favourable istration charge of 1.20%, which was at treatment available under Article 7(1)(b), pro­ issue in Bautiaa and Société Française Mari- vided that the conditions set out therein were time. fulfilled.

109. As the Commission rightly points out in paragraph 12 of its written observations, 51 — This duty was provided for under Article 816 of the French General Tax Code. there is a close analogy between the Italian 52 — It is significant that subsequent to the Bautiaa and Société Française Maritime judgment the Italian Government amended Article 4(b) of the table annexed to Presidential Decree No 131/86 by adopting Presidential Decree No 323/96 and replaced the proportional registration duty 50 — See Bautiaa and Société Française Maritime, paragraph 40. with a flat-rate duty of LIT 250 000.

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ÄGAS v AMMINISTRAZIONE TRIBUTARIA DI MILANO

VI — Conclusion

112. In the light of the foregoing, I propose that the Court reply as follows to the question referred by the Commissione Tributaria Provinciale di Milano:

Articles 4(1)(c) and 7(1)(b) of Council Directive 69/335/EEC of 17 July 1969 con­ cerning indirect taxes on the raising of capital, as amended by Council Directive 85/303/EEC of 10 June 1985, mean that it is not prohibited to levy registration duty in the event of the merger by acquisition of one company by another company which already holds 100% of the capital of the former.