Judgment of the Court (First Chamber) of 11 December 2008 (reference for a preliminary ruling from the Bundesfinanzhof — Germany) — A.T. v Finanzamt Stuttgart-Körperschaften

(Case C-285/07) (1)

(Directive 90/434/EEC - Cross-border exchange of shares - Fiscal neutrality - Conditions - Articles 43 EC and 56 EC - Legislation of a Member State making the continued use of the book value of the shares transferred in exchange for the new shares received, and therefore the fiscal neutrality of the transfer, conditional on the carryover of that value in the tax balance sheet of the acquiring foreign company - Compatibility)

(2009/C 32/05)

Language of the case: German

Referring court

Bundesfinanzhof

Parties to the main proceedings

Applicant: A.T.

Defendant: Finanzamt Stuttgart-Körperschaften

Intervening party: Bundesministerium der Finanzen

Re:

Reference for a preliminary ruling — Bundesfinanzhof — Interpretation of Article 8(1) and (2) of Council Directive 90/434/EEC of 23 July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States (OJ 1990 L 225, p. 1) and of Articles 43 EC and 56 EC — Shareholder receiving securities representing the capital of the acquiring company in exchange for securities of the acquired company — Taxation of the shareholder of the acquired company — Tax legislation of a Member State making the shareholder's attribution of the book value (Buchwertansatz) to the securities received in exchange conditional upon the acquiring company's own attribution of the book value to the securities exchanged (doppelte Buchwertverknüpfung)

Operative part of the judgment

Article 8(1) and (2) of Council Directive 90/434/EEC of 23 July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States precludes legislation of a Member State under which, in consequence of an exchange of shares, the shareholders of the acquired company are taxed on the capital gains arising from the transfer and the capital gain is deemed to correspond to the difference between the initial cost of acquiring the shares transferred and their market value, unless the acquiring company carries over the historical book value of the shares transferred in its own tax balance sheet.

(1)  OJ C 247, 20.10.2007.