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Directive 69/335

According to Ashta ((Ashta, Arvind, EC Directive on Capital Duties (69/335/EEC) (2006). Available at SSRN: “Member States have also repealed taxes on transfers of shares, such
as the German Stock Exchange Transfer Tax repealed in 1992, the Swedish stamp duty on
registration of companies abolished in 1994, and the Danish Share Transfer Duty repealed in
1999. Sweden had earlier abolished a tax on transfers of securities in 1991.”

The wording of the capital duty Directive was often avoided because the national tax laws were broader relating some taxes which included (and hidden) capital duty. This issue was further complicated by the similarity of nomenclature between
“transfer” taxes allowed by article 12 of the directive and those which were supposed to be limited. For example, as mentioned by Ashta, Netherlands had a “Capital Contribution Tax” included within its Transfer Act of 1991 and it
also had a tax on legal transactions; Austria had a Minimum Corporate Tax and it also had Capital Transaction taxes; in Italy, the tax on capital was imposed through
its registration act; Belgian had a capital contribution, and it also had a registration duty on companies;
Greece had a tax on the movement of capital; Spain had a tax on capital transfers and documented
legal acts; Ireland had a stamp Duty on Capital Companies; Luxembourg had Registration Taxes;
; and in France the capital duty wass imposed as part of Registration duties.

The Place of Taxation

The capital of a company should be taxed only once, so it is of vital importance to determine which State has the right to levy a tax on capital. According to the amended Directive, transactions subject to capital duty shall only be taxable in the Member State in whose territory the effective centre of management of a capital company is situated at the time when such transactions take place. When the effective centre of management of a capital company is situated in a third country and its registered office is situated in a Member State, transactions subject to capital duty shall be taxable in the Member State where the registered office is situated. When the registered office and the effective centre of management of a capital company are situated in a third country, the supplying of fixed or working capital to a branch situated in a Member State may be taxed in the Member State in whose territory the branch is situated.

According to Ashta, it was difficult to find direct references to capital duties, “either in
English versions of documentation of national legislations or in written commentaries”. He provides the following example:  “a survey of Capital Duties published in 1993 indicates the following rates prevailed in
different States, but it dos not indicate the nomenclature of the laws.
Country Rate in 1993
Belgium 0.5%
Denmark 1%
France FF 500 (11.4%)
Germany –
Greece 1%
Ireland 1%
Italy 1, 4 or 8%
Luxembourg 1 or 0.5%
Netherlands 1%
Portugal 1%
Spain 1%
UK –
Note: multiple rates are given when there are different rates on different assets. On any one asset, only one rate is
applied. For example, in Luxembourg the general rate was 1% and 0.5% rate was for family owned companies, or for
fusion through exchange of shares.

According to Ashta, in 2006, the French fixed rate was € 230. The variable rate was 2% if contribution is in kind (property), but this was reduced to 1% if the person keeps the shares for three years. Since 2000, all
these taxes were no longer applicable for the constitution of new companies, but the fixed charge
of € 230 was still applicable for further increases of capital, mergers and partial increase of capital
at time of a division of a company. The duty was not levied on mutual funds (Fonds Communs de
Placement). The duty was also not levied for Management Buyouts (MBOs)((Articles 808A-834bis of the CGI. Especially 809 – I bis and 810 – III.))

United Kingdom abolished its capital duty in 1988, Germany and France abolished theirs in
1992, Denmark abolished its in 1993 and Italy in 2000. Most recently, capital duty was
abolished by Ireland from 7 December 2005, and by Belgium and the Netherlands from 1
January 2006.


36/86( Dansk Sparinvest)
38/88 (Siegen), 15/89 (Deltakabel), 249/89 (Trave), 161/78 (Advokatradet), c-280/91 (Viesmann), C-50/91, Europartner

C-71/91 and C 178/91 Ponent Carni cases, C-56/98 5Modele SGPS SA et Director-
Geralsos Registros e Notariado


Brood, E.A.; Zubizaretta, F.G.; and Soto J.V.: “Capital Contribution Tax in the EC” in EC Tax Review
1993/2 pp. 96-106
* EC: Inventory of Taxes, 2000
* EC Tax Review 1999/1, pp. 45-67, three articles on Capital Duties: one on case law, one on Belgium and
one on Netherlands.
* EC Tax Review 1999/4 pp. 241-243, article of Austrian Minimum Corporate Tax
* EC Tax Review 2000/4 pp. 233-242, article on Italian capital duties.
* Marchessou, Philippe: “The application in France of Directive 335/69 concerning taxation on the raising of
capital” in EC Tax Review 1999/3 pp. 176-179
* Terra, Ben and Wattel, Peter: European Tax Law, Kluwer, 1997, Chapter 8.

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