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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Centro Equestro da Leziria Grande (Freedom to provide services) [2007] EUECJ C-345/04 (15 February 2007) URL: http://www.bailii.org/eu/cases/EUECJ/2007/C34504.html Cite as: [2007] EUECJ C-345/04, [2007] EUECJ C-345/4 |
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(Freedom to provide services Tax legislation Corporation tax Equestrian presentations and lessons organised in a Member State by a company established in another Member State Deduction of operating expenses Conditions Direct economic connection to income received in the State in which the activity is pursued)
In Case C-345/04,
REFERENCE for a preliminary ruling under Article 234 EC from the Bundesfinanzhof (Germany), made by decision of 26 May 2004, received at the Court on 12 August 2004, in the proceedings
Centro Equestre da Lezíria Grande Lda
Bundesamt für Finanzen,
composed of A. Rosas, President of the Chamber, A. Borg Barthet and U. Lõhmus (Rapporteur), Judges,
Advocate General: P. Léger,
Registrar: R. Grass,
after considering the observations submitted on behalf of:
the German Government, by C.'D. Quassowski and A. Tiemann, acting as Agents,
the Italian Government, by I.M. Braguglia, acting as Agent, and G. De Bellis, avvocato dello Stato,
the Commission of the European Communities, by B. Eggers and R. Lyal, acting as Agents,
after hearing the Opinion of the Advocate General at the sitting on 22 June 2006,
gives the following
National legal context
'In the case of persons with restricted liability to tax, income tax shall be levied by means of retention at source on income from artistic, sporting or other performances organised in Germany or conducted in Germany, including income from other services provided in connection with those performances, irrespective of the person receiving the income ...'.
'[A] person subject to limited tax liability, whose income is subject to retention at source in accordance with Paragraph 50a(4)(1) or (2), [may] apply for full or partial repayment of the tax deducted and paid. Repayment shall be subject to the condition that the operating expenses or business costs that have a direct economic connection to that income are greater than half of that income.'
The dispute in the main proceedings and the question referred for a preliminary ruling
'Is it contrary to Article 59 of the Treaty establishing the European Communities if a person with restricted tax liability in Germany who is a national of a Member State may claim repayment of tax deducted at source on his income in Germany only when the operating expenses that have a direct economic connection to that income are greater than half of that income?'
The question referred for a preliminary ruling
The existence of a direct economic connection
The requirement that the costs be greater than half of the income
Costs
On those grounds, the Court (Third Chamber) hereby rules:
Article 59 of the EC Treaty (now, after amendment, Article 49 EC) does not preclude national legislation such as that at issue in the main proceedings in so far as that legislation makes repayment of corporation tax deducted at source on the income of a taxpayer with restricted tax liability subject to the condition that the operating expenses in respect of which a deduction is claimed for that purpose by that taxpayer have a direct economic connection to the income received from activities pursued in the Member State concerned, on condition that all the costs that are inextricably linked to that activity are considered to have such a direct connection, irrespective of the place and time at which those costs were incurred. By contrast, that article precludes such national legislation in so far as it makes repayment of that tax to that taxpayer subject to the condition that those same operating expenses exceed half of that income.
[Signatures]
* Language of the case: German.