Commissie vraagt Duitsland 'vertrekbelasting' te beëindigen (en)
The European Commission has formally requested Germany to abolish its "exit tax" provisions. The Commission considers that Germany's exit tax regime (Article 6 of the Law on tax relations with foreign aspects) is incompatible with EC Treaty rules on people's right to reside, work and establish themselves in another Member State (Articles 18, 39 and 43). The Commission's view takes account of the case law of the European Court of Justice and in particular its ruling of 11th March 2004 in case C-9/02 (de Lasteyrie du Saillant). The formal request takes the form of a so-called 'reasoned opinion' under EC Treaty infringement procedures (Article 226). In the absence of a satisfactory reaction to the reasoned opinion within two months, the Commission may refer the matter to the European Court of Justice.
Under the terms of Article 6 of the German law on tax relations with foreign countries, individual taxpayers who have been subject to unlimited income tax liability in Germany for a period of at least ten years and who have held a direct or indirect participation in a German limited company of at least one percent during the last five years, are subject to German income tax on their unrealised capital gains if they leave the country. By contrast, capital gains are taxed for residents in Germany only if they are realised.
The Commission considers such an 'exit tax' to be incompatible with EC Treaty rules on people's right to reside, work and establish themselves in another Member State (Articles 18, 39 and 43), since the change of residence to another Member State gives rise to taxes which are not due if a taxpayer moves his residence within Germany. The Commission considers that there is no valid justification for such an obvious hindrance to the free movement of persons within the Internal Market.
The Commission recognises that Germany may legitimately tax capital gains. The violation of EU law does not therefore result from the fact of taxing capital gains as such, but rather from the fact that the tax liability is triggered before the gains are realised only in the case of those taxpayers that move abroad.
In its 11th March 2004 ruling on the 'de Lasteyrie du Saillant' case (C-9/02), the Court stated that "the principle of freedom of establishment laid down by Article 52 of the EC Treaty (now, after amendment, Article 43 EC) must be interpreted as precluding a Member State from establishing, in order to prevent a risk of tax avoidance, a mechanism for taxing as yet unrealised increases in value_., where a taxpayer transfers his tax residence outside that State."
The Commission is also examining exit tax rules of other Member States with a view to ensuring their compliance with the Treaty.
The latest information on infringement proceedings against the Member States is available on the following site:
http://europa.eu.int/comm/secretariat_general/sgb/droit_com/index_en.htm