Complete summary of European law 25/26 Open University (RS0422)

Samenvatting
Europees Recht




Inclusief alle jurisprudentie en arresten uitgelegd




European Union Law

, Topic: Free Movement of Legal Persons
Why does it matter?
 Free Movement of a Natural Person
- Crossing a border: for example from Germany to the
Netherlands
- Person and her activity cannot be separated from each other
- The one moves together with the other
 Free Movement of a Legal Person (company)
- Company crosses the border, not the natural person
- Person and her activity can be separated from each other
- The one does not, by definition, move together with the other
one
- Because the legal person cannot exist without a legal order that
defines it
- The economic activity can, however, take place anywhere

 You have a brilliant idea and want to realise it in Germany. To do
so, you want to create a company, but you have no money.
- Problem: Establishing a GmbH in Germany requires a minimum
capital of 25.000 Euro
- Solution: You go to Ireland. There you can register a Ltd.
Without any minimum capital requirements
- Who is disadvantaged: Your creditors. If you go bankrupt, your
creditors will not see any money since there is no minimum
capital
- Question: Can your main economic activity stay in Germany?
- Question: Can Germany prevent you from creating a Ltd. under
Irish law?
 There is a multinational company selling coffee. It makes its
biggest profits in France.
- Problem: The multinational company does not want to pay too
many taxes
- Solution: It goes to the Netherlands. Because the Netherlands
has (until 2021) a very advantageous tax treatment for
multinational companies
- Who is disadvantaged: the regular taxpayers in France. They
have to pay taxes and suffer from lacking tax income on profit
generated in France

, - Question: Can the multinational company still be economically
active in France?
- Question: Can France prevent the company to avoid paying its
company taxes in France?

 Tax treatment laws in the Netherlands (background):
- Artikel 1 van de Wet op de vennootschapsbelasting 1969
o Onder de naam ‘vennootschapsbelasting’ wordt een
directe belasting geheven van de lichamen vermeld in de
artikelen 2 en 3
- Artikel 2, lid 1 van de Wet op de vennootschapsbelasting 1969
o Als binnenlandse belastingplichtigen zijn aan de belasting
onderworpen de in Nederland gevestigde [..] besloten
vennootschappen met beperkte aansprakelijkheid.
- Artikel 4, lid 1 van de Algemene Wet inzake rijksbelastingen
o Waar iemand woont en waar een lichaam gevestigd is,
wordt naar de omstandigheden beoordeeld
- Artikel 2, lid 4 van de Wet op de vennootschapsbelasting 1969
o Heeft de oprichting van een lichaam plaatsgevonden naar
Nederlands recht, dan wordt voor de toepassing van deze
wet [..] het lichaam steeds geacht in Nederland te zijn
gevestigd
- Indien het bedrijf naar Nederlands recht is opgericht, wordt
geacht dat het bedrijf in Nederland is gevestigd. Het maakt
daarbij niet uit in welk Europees land het bedrijf economische
activiteiten uitvoert. Het betaalt dan belasting aan de
Nederlandse Staat (laag belasting tarief)
What is a Legal Person? And Who Determines This?
 CJEU, Case 81/87, Daily Mail
- ‘[..] Unlike natural persons, companies are creatures of the law
and, in the present state of Community law, creatures of national
law. The exist only by virtue of the varying national legislation
which determines their incorporation and functioning.’ [para.19]
 What is meant by a ‘creature of the law’?
- Birth, existence and death are defined by law
- But which national law defines this creature?
- Private International Law
o What is the factor that connects a fact to a legal order
(connecting factor)?

, o Place of the company register (incorporation theory)
o Place of the business activity/central administration of the
company (real seat theory)


 How does Private International Law (PIL) work (simplified)?
- Member State A: Company
1. Lex fori (the national law of Member State A)
2. Applicable PIL rule: Covered situation -> Connecting Factor
3. Could be the applicable rule from Member State A or from
Member State B (depending on the circumstances)
- Member State B: The economic activity of the company
1. Lex fori (the national law of Member State B)
2. Applicable PIL rule: Covered situation -> Connecting Factor
3. Could be the applicable rule from Member State A or from
Member State B (depending on the circumstances)
- Incorporation Theory:
o Only the national law in the country where the company is
officially registered is applicable
- Real Seat Theory:
o Only the national law in the country where the economic
activity takes place is applicable
 What does EU law say about ‘creatures of the law?’
- Article 54(1) TFEU
o Companies or firms formed in accordance with the law of a
Member State and having their registered office, central
administration or principal place of business within the Union
shall, for purposes of this Chapter, be treated in the same
way as natural persons who are nationals of Member States
o Equal treatment of connecting factors freely set by the law of
the Member States
 Consequences of the equal treatment of connecting factors
 Situations:
1. In Member State A Incorporation Theory: Legal configuration +
Economic activity in one Member State country
In Member State B Real Set Theory: Legal configuration +
Economic activity in one Member State country
One legal order of a Member State claims the competence to
regulate the company