C-236/97

2. The question has been raised in proceed­ ings between Skatteministeriet (the Danish 4. As a result of the defendant's having Ministry of Fiscal Affairs) and Aktieselskabet increased its share capital, the capital duty Forsikringsselskabet Codan (hereinafter 'the payable pursuant to Danish Law No 284 defendant'). In June 1990, the defendant became due. The defendant paid that duty, entered into an agreement with three British but pointed out that it was not appropriate to companies, which owned the entire share pay, at the same time and on the same amount, duty under the Law concerning duty on the transfer of shares. The Customs and Tax Board nevertheless also demanded payment of the * Original language: German. 1 — OJ, English Special Edition 1969 (II), p. 412, amended by duty on the transfer of shares. In the defen­ Council Directive 85/303/EEC of 10 June 1985 amending dant's opinion that is contrary to Directive Directive 69/335/EEC concerning indirect taxes on the raising of capital (OJ 1985 L 156, p. 23). 69/335.

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SKATTEMINISTERIET v CODAN

2 — Seventh recital in the preamble to Directive 69/335. 9. Article 12 provides for a derogation from 3 — Eighth recital in the preamble to Directive 69/335. the abovementioned prohibitions on taxation.

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OPINION OF MR ALBER — CASE C-236/97

In this context, Article 12(1)(a) in particular 12(1 )(a) of 'taxes on Stock Exchange disposals' is relevant. It reads: ('børsomsoetningsskatter"), in the defendant's opinion it is not lawful to charge duty on the transfer of shares in the present case since the share transfer was not effected through the Stock Exchange.

'Nothwithstanding Articles 10 and 11, Member States may charge:

11. It should however be noted that the French, English, Dutch, Spanish, Portuguese and Greek versions of the directive, in any (a) duties on the transfer of securities, whether event, do not contain the additional words charged at a flat rate or not; 'Stock Exchange' in Article 12(1)(a).

'In order to classify the duty at issue for the purposes of Directive 69/335, and to assess its compatibility with that directive ..., it is necessary, first of all, to determine whether transactions such as those which gave rise to B — Opinion the levying of capital duty ... fall within the scope of Directive 69/335, and to classify 5 them in the light of that directive'.

17. That means that an examination in the 14. In the defendant's submission, under light of Article 12 is possible only in the case Article 12(1)(a), apart from capital duty, only of transactions which fall within the scope of a tax on Stock Exchange disposals in the lit­ the directive. Thus the Court also held as fol­ eral sense of the term may be charged, that is, lows in the Dansk Sparinvest case: 'Article 12 only a duty on transactions in securities which of the directive must therefore be interpreted are effected through the Stock Exchange or as meaning that, as a reading of the combined concern companies admitted to trade on a provisions of Articles 10, 11, and 12 confirms, Stock Exchange. However, according to the it establishes an exhaustive list of taxes and defendant, Member States are no longer autho­ duties other than capital duty which effect rised to charge a general duty on the transfer capital companies in connection with the of shares. transactions referred to in Article 10 and 11'. 6

The Court took as its basis in that regard the last recital in the preamble to the directive, according to which the retention of other indirect taxes with the same characteristics as the capital duty or the stamp duty on securi­ ties might frustrate the purpose of the mea-

18. That would mean that, irrespective of the interpretation of Article 12, the charging of a duty on the transfer of shares would not be prohibited in all cases. The prohibition would instead apply only to the charging of that duty on transactions which fall within the scope of the directive. 22. Consequently, taxing the transfer of shares would be possible in cases concerning activi­ ties falling outside the scope of the directive. Whether that applies to the activity at issue in this case is a matter of dispute. That is mainly due to the fact that the transaction connected with the share transfer, which is described by 19. The Finnish Government argues along the national court, is interpreted in different similar lines. It points out that, in its pro­ ways. The answer to be given to the above- posals for directives, the Commission has mentioned question also depends on that always distinguished between indirect taxes interpretation. on the raising of capital and indirect taxes on the transfer of securities. The present case relates to a directive concerning indirect taxes on the raising of capital, which is not aimed at the harmonisation of duties on the transfer of shares. If that directive also prohibited the charging of a duty on the transfer of shares, it would not have been necessary for the 23. The order making the reference states that Commission to draw up proposals intended in order to finance the purchase of shares the to exclude that type of tax. defendant increased its capital. It should there­ fore be assumed in this case that there were two different transactions:

24. On the other hand, the Danish ministry has argued that the share transfer was the basis for the capital increase. It infers from that that this case is about one transaction consisting of three components. First, there is 27. In the Commission's submission, that is the transfer of the Fjerde Sø shares to Codan. possible since the transfer of shares, which That is the prerequisite for and basis of the must be considered completely independently, second transaction, the increase in Codan's does not fall within the scope of the directive. capital. The third component is the transfer It does not lead to an increase in the capital of the newly-issued shares by Codan to the and does not contribute towards strength­ British sellers of the Fjerde Sø shares. That is ening the economic potential of the company. the payment for the shares originally trans­ ferred. In the defendant's submission, the present case is primarily about a capital increase. It nevertheless regards the whole transaction as a single transaction which should therefore not be taxed twice. 28. As the Court has held, the decisive test to be satisfied in order for a capital-raising trans­ action to attract capital duty is the strength­ ening of the economic potential of the com­ pany benefiting from it. It bases its reasoning on the preamble to Council Directive 74/553/EEC of 7 November 1974 amending Article 5(2) of Directive 69/335/EEC con- 25. Since the available information is there­ fore insufficient for the purpose of deter­ mining precisely how the share transfer took 8 — During the oral procedure, the Commission based its submis­ place, and since that is not a matter which is sions only on the view of Skatteministeriet.

32. However, such 'double' taxation cannot be regarded apriori as unlawful. Article 12 of the directive specifically provides that, despite the prohibition on further indirect taxes in Articles 10 and 11, Member States may charge 29. France also demonstrates that the two certain duties 'notwithstanding Articles 10 transactions involved in this case are com­ and 11'. The question in this case is merely pletely independent of one another by pointing whether the duty on the transfer of shares out that there were various ways in which the claimed by Skatteministeriet constitutes such purchase of the shares could have been a duty within the meaning of Article 12. financed. Thus, Codan could also have paid for the parcel of shares in cash. The capital increase therefore represents only one of sev­ eral possible ways of financing the purchase of shares. The two transactions should there­ fore be regarded as completely independent of one another. 33. In the defendant's submission that is not the case. It contends that only the Danish version of the directive, according to which only a tax on Stock Exchange disposals in the strict sense of the term may be charged, can be taken as the basis in this case. However, since, as is common ground, the transaction at issue in this case was not effected through the Stock Exchange, no tax on Stock Exchange 30. It is therefore clear from the foregoing disposals may be charged either. According to that, if the capital increase was intended to it, Article 12(1 )(a) does not authorise a gen­ finance the purchase of shares, the purchase eral tax on the transfer of shares. of shares can be subject to a duty on the transfer of shares. The fact that, at the same time, the capital increase is subject to capital duty is irrelevant in that regard.

case, the Court held that it must be borne in mind that community legislation is drafted in several languages and that the different lan­ guage versions are all equally authentic. An interpretation of a provision of community law thus involves a comparison of the dif­ 1 ferent language versions. 1The Court also dealt with the question of how to proceed in 37. It is now argued that it would lead to the case of linguistic divergences in its judg­ unequal treatment or to distortions of com­ ment in the Rockfon case, in which it held petition if, in certain Member States, only a that the different language versions of a Com­ tax on Stock Exchange disposals could be munity text must be given a uniform inter­ charged, whilst in others the transfer of shares pretation; 'in the case of divergence between in general were taxed. the versions the provision in question must therefore be interpreted by reference to the purpose and general scheme of the rules of 12 which it forms part.' Since in the case at issue here there are several language versions which diverge from one another, the solution cannot be based solely on the Danish version. 38. That is an argument in favour of a uni­ The Community provision must instead be form interpretation of the directive. How­ ever, it does not explain what that interpreta­

11 — Judgment in Case 283/81 [1982] ECR 3415, at paragraph 18. 12 — Judgment in Case C-449/93 [1995] ECR I-4291, at para­ 13 — Judgment in Case C-2/94 Denkavil [1996] ECR I-2827, at graph 28, with reference to the judgment in Case 30/77 paragraph 16, and judgment in Joined Cases C-71/91 and Boucbereau [1977] ECR 1999, at paragraph 14. C-178/91, cited in footnote 6, at paragraph 19.

39. On the other hand, an interpretation such as that advocated by the defendant would lead to unequal treatment between undertakings 42. It is sufficient in this connection to refer which are listed on the Stock Exchange and to the judgment in the Henriksen case, in those which are not listed, and would thus which, likewise in a case of taxation, the give rise to distortions of competition. Since Court did not use exclusively the particular only activity on the Stock Exchange would language version of the rules concerned, but be subject to a tax, that would also deter many also took account of the other language ver­ 14 firms from seeking a listing on the Stock sions by way of a common interpretation. Exchange. It could be inferred from that that it would be contrary to the purpose of the directive for Article 12(1)(a) to be construed as allowing Member States to charge a tax on Stock Exchange disposals (in the strict sense of the term) but not a general tax on the transfer of shares.

43. Finally, the defendant contends that it is not clear why not only a tax on Stock Exchange disposals but also a general duty on the transfer of shares should be charged. The tax on Stock Exchange disposals provided for in 40. The defendant disputes that, pointing out Article 12(1)(a) merely constitutes payment that Article 12 is a derogating provision which for the activity of the Stock Exchange. It is must be narrowly construed. However, as has not clear why, over and above that, all trans­ already been discussed, this case involves fers of shares should be taxed. divergence between language versions, for which reason a common interpretation by reference to the purpose of the rules in ques­ 14 — Judgment in Case 173/88 [1989] ECR 2763, at paragraph 10 tion must be found. et seq.

C — Conclusion

48. The question referred for a preliminary ruling should therefore be answered as follows:

Article 12(1)(a) of Council Directive 69 / 335 / EEC concerning indirect taxes on the raising of capital must be construed as authorising duty to be charged on the transfer of shares, irrespective of whether the company which issued those shares is admitted to trade on a Stock Exchange and irrespective of whether the share transfer is effected through the Stock Exchange or directly between the transferor and the acquiring party.

15 — See footnote 7. 16 — Article 10(2)(a) of the proposal for a directive.

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