European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

The right of establishment includes not only access to self-employed activities but also the exercise of such activities . Even if the national rules apply without distinction to national providers and providers from other Member States, they are liable to constitute a restriction where they place an additional financial burden on other EU nationals so that, for the purposes of competition they ar …

Exercise of activity

The right of establishment includes not only access to self-employed activities but also the exercise of such activities . Even if the national rules apply without distinction to national providers and providers from other Member States, they are liable to constitute a restriction where they place an additional financial burden on other EU nationals so that, for the purposes of competition they are not on an equal footing with nationals established in the host State . Article 56 TFEU thus precludes legislation of a Member State which fines suppliers of services established in another Member State for non-compliance with the obligation to submit a tax declaration for the purposes of their liability to a tax on advertising in a series of fines issued within several days, the amount of which can lead to a total amount of several million euros, without the competent authority giving those suppliers of services the time necessary to comply with their obligations or the opportunity to submit their observations, or having itself examined the seriousness of the infringement, before adopting the final decision fixing the total amount of those fines, whereas the amount of the fine which suppliers of services established in the Member State where the tax is levied who fail to comply with a similar obligation to submit a tax declaration or to register contrary to the general provisions of national tax legislation is significantly less and is not increased, in the event of continued failure to comply with such an obligation, in the same proportions, nor necessarily within such a short period of time . 

Therefore, pursuant to Regulation No 883/2004 of 29 April 2004, which replaced Regulation No 1408/71 of 14 June 1971 on the application of social security schemes, a self-employed person to whom the Regulation applies is subject to the legislation of a single Member State only . A person who exercises a self-employed activity in the territory of two or more Member States is subject to the legislation of the Member State where he or she resides  and such Member State may take into account, for the calculation of the contribution, income obtained in the other Member State where he or she exercises part of his or her activity . By contrast, an undertaking which exercises its activity on a temporary basis in the territory of a Member State cannot be required to pay employer's contributions where it is already liable for comparable contributions with respect to the same activity in the Member State of establishment . Likewise, an employer who is established in another Member State and is already liable to pay comparable contributions and who is temporarily carrying out works in a second State, using workers who are nationals of non-member countries, cannot be required to pay certain social security contributions applicable to providers established in that territory . Moreover, the exercise of an activity cannot be made subject to a specific examination of professional suitability where this is not required of nationals of the host Member State, where the person wishing to exercise in that Member State is qualified in the field at issue in his Member State of origin . In certain sectors, however, the host Member State may require the holding of an authorization issued by the authorities of the Member State where the operator is established. This is the case in the betting and gaming sector where the Court of Justice held that the fact that an operator holds, in the Member State in which it is established, an authorization permitting it to offer betting and gaming does not prevent another Member State, while complying with the requirements of EU law , from making such a provider offering such services in its territory subject to the holding of an authorization issued by its own authorities . However, national legislation cannot, without providing for either a transitional period or compensation for operators of amusement arcades, prohibit the operation of slot machines outside casinos .

The right of establishment means that traders are free to choose the appropriate legal form in which to pursue their activities in another Member State. Discriminatory fiscal provisions cannot limit that freedom of choice . Therefore, national legislation which establishes a tax treatment for companies which varies depending on whether they are branches established in the national territory or in another Member State where there is no objective difference in situation , applies to certain non-residents a higher rate of tax than is applicable to those who are residents or treated as such , or grants repayment supplements on overpaid tax to companies resident for tax purposes in that State whilst refusing them to companies which are resident for tax purposes in another Member State , restricts the freedom of establishment. 

Although a tax law may make the carrying forward of previous losses, requested by a taxpayer which has a branch in the national territory but is not resident there, subject to the condition that the losses must be economically related to the income earned in that State, it cannot require the taxpayer to have kept and held in that State, in respect of activities it carried out there, accounts complying with the relevant national rules , reserve a fiscal advantage only to undertakings having contact with lessors established in the national territory whilst depriving those leasing from lessors established in another Member State  or take account, for the purposes of calculating the basis of assessment for non-resident taxpayers, only of business costs that have a direct connection with the activity exercised in that State and having generated taxable income there  or refuse to take account, for calculation of a deduction granted to a company subject to full tax liability in a Member State, of the net value of the assets of a permanent establishment situated in another Member State when the profits of that permanent establishment are not taxable in the first Member State by virtue of a double taxation convention, whereas the assets attributed to a permanent establishment situated in the territory of the first Member State are taken into account for that purpose .  However, national legislation which, in order to prevent double taxation of profits distributed by a resident subsidiary, grants a tax credit to the parent company established in the same Member State only, is not discriminatory against the non-resident parent company, where the Member State in which the parent company is resident is required to accord fiscal tax treatment which is designed to achieve the same result as the tax credit granted .  

Likewise, legislation may impose on providers of postal services which are outside the scope of the universal service a mandatory external procedure for dealing with complaints from users of those services, without restricting free movement . It may also preclude the application of the principle of the joint and several liability of parent companies vis-à-vis the creditors of their subsidiaries to parent companies having their seat in the territory of another Member State without rendering less attractive the exercise by European Union nationals of the freedom of establishment that is guaranteed by the Treaty . On the other hand, a special national rule - which lays down stricter conditions for being allowed to deduct business expenses than those laid down in the general rule and the scope of which has not been delimited with precision beforehand - is liable both to dissuade taxpayers from the Member State concerned  from exercising their right to the freedom to provide services and from making use of the services of providers established in another Member State and to dissuade those providers from offering their services to recipients established in the Member State in question .

Reserving the exercise of an activity to companies which have their registered office in the Member State concerned in order to ensure that controls and sanctions are effective  or restricting exemption from the tax on transactions relating to immovable property taking place in connection with a reorganization within a group of companies only to cases where the company qualifying for exemption has been incorporated under national law , are also prohibited. 

See also Directive No 2006/123 of 12 December 2006, point 9. 

Case C-272/94 Criminal proceedings against Guiot [1996] ECR I-1905, LawLex200900002130JBJ.

Case C-660/11 Biasci and others, Judgment of 12 September 2013, LawLex201300001284JBJ, which in fact precludes the host Member State from banning all cross-border activity in the betting and gaming sector and excluding a category of operators from the award of licences to engage in that economic activity.

Case C-98/14 Berlington Hungary Tanácsadó és Szolgáltató kft, Judgment of 11 June 2015, LawLex201500000730JBJ.

Case 270/83 Commission v France [1986] ECR 273, LawLex200900001801JBJ.

Case C-141/99 AMID [2000] ECR I-11619, LawLex200700001604JBJ; Case C-397/98 Metallgesellschaft and others [2001] ECR I-1727, LawLex200900000632JBJ; Case C-436/00 X and Y [2002] ECR I-10829, LawLex200900000808JBJ; Case C-446/03 Marks & Spencer [2005] ECR I-10837, LawLex200900000862JBJ; Case C-150/04 Commission v Denmark [2007] ECR I-1163, LawLex200900000593JBJ.

Case C-107/94 Asscher v Staatssecretaris van Financiën [1996] ECR I-3089, LawLex200900000342JBJ; Case C-234/01 Gerritse [2003] ECR I-5933, LawLex200900000816JBJ.

Case C-330/91 The Queen v Inland Revenue Commissioners, ex parte Commerzbank [1993] ECR I-4017, LawLex200900000327JBJ.

Case C-250/95 Futura Participations and Singer v Administration des contributions [1997] ECR I-2471, LawLex200900002169JBJ.

Case C-294/97 Eurowings Luftverkehr [1999] ECR I-7447, LawLex200700001895JBJ.

Case C-345/04 Centro Equestro da Lezíria Grande [2007] ECR I-1425, LawLex200900002225JBJ.

Case C-350/11 Argenta Spaarbank NV, Judgment of 4 July 2013, LawLex201300001067JBJ.

CJEU, Case C-482/18 Google Ireland Limited v Nemzeti Adó- és Vámhivatal Kiemelt Adó- és Vámigazgatósága, Judgment of 3 March 2020, LawLex202000000323JBJ: stating that the principle of freedom to provides services does not preclude the legislation of a Member State which imposes an obligation to submit a tax declaration on suppliers of advertising services established in another Member State for the purposes of their liability to a tax on advertising, whereas suppliers of such services established in the Member State where the tax is levied are exempt from that obligation, where that obligation to submit a tax declaration does not impinge on the exercise of the activity of advertising online and where such an exemption is possible only because the said service providers have already declared or registered with the tax authorities for the purposes of some form of direct or indirect taxation.

Case C-284/06 Finanzamt Hamburg-Am Tierpark [2008] ECR I-4571, LawLex200900001409JBJ.

Case C-148/10 DHL International [2011] ECR I-9543, LawLex201200000127JBJ.

Case C-186/12 Impacto Azul, Judgment of 20 June 2013, LawLex201300000995JBJ.

Case C-318/10 Société d'investissement pour l'agriculture tropicale SA (SIAT), Judgment of 5 July 2012, LawLex201200002227JBJ.

Case C-101/94 Commission v Italy [1996] ECR I-2691, LawLex200900000307JBJ.

Case C-1/93 Halliburton Services v Staatssecretaris van Financiën [1994] ECR I-1137, LawLex200800000337JBJ.

For an example, Case C-34/98 Commission v France [2000] ECR I-995, LawLex200700001588JBJ.

Case C-242/99 Vogler [2000] ECR I-9083, LawLex200900000895JBJ.

Case C-249/04 Allard [2005] ECR I-4535, LawLex200900000929JBJ.

Case 62/81 Seco v EVI [1982] ECR 223, LawLex200900002157JBJ.

Case C-111/12 Ministero per i beni e le attività culturali, Judgment of 21 February 2013, LawLex201300000237JBJ.

But, a national measure according to which the grant of a license to organize online games of chance is reserved exclusively to operators of games of chance holding a concession for a casino situated on national territory, is incompatible with EU law since that rule does not constitute a condition indispensable to the achievement of the desired objectives, and there are less restrictive measures which are capable of attaining them: Case C-3/17 Sporting Odds Ltd, Judgment of 28 February 2018, LawLex201800000343JBJ.

European Business Law

95. Exercise of activity

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95. Exercise of activity

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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