Prunus (Free Movement Of Capital): ECJ 5 May 2011

Direct taxation – Free movement of capital – Article 64 TFEU – Legal persons established in a non-Member State – Ownership of immovable property located in a Member State – Tax on the market value of that property – Refusal of exemption – Assessment with regard to overseas countries and territories – Combating tax evasion – Joint and several liability
The Court of Justice considered the status of the British Virgin Islands for the purposes of free movement of capital under article 56 EC. The BVI are one of the OCTs for which provision is made in article 299(3) EC.
Advocate General Cruz Villalon observed: ‘All of the foregoing confirms that there is no categorical answer to the question whether an OCT should be categorised as a member state or a third country, and instead the answer varies on a case-by-case basis according to the relevant legal framework and taking into careful consideration the objectives pursued by the special arrangements for association laid down in Part Four of the TFEU.’
However, the Advocate General also drew attention to the lacuna which would result should free movement of capital not apply to the OCT: ‘[T]he free movement of capital laid down in article 63 TFEU must apply to OCTs, since otherwise there would be a paradox in that a freedom granted to third countries would be denied to territories with which the Union has special relations.’


[2011] EUECJ C-384/09, ECLI:EU:C:2011:276, [2011] 3 CMLR 7, [2011] I-ECR 3319, [2011] STI 1702, [2011] STC 1392




England and Wales


OpinionPrunus (Free Movement Of Capital) ECJ 9-Dec-2010
ECJ Free movement of capital – Direct taxation – Tax on the ownership of immovable property situated in a Member State – Immovable property belonging to a legal person – Rules governing exemption from the tax . .

Cited by:

CitedRoutier and Another v Revenue and Customs SC 16-Oct-2019
A Jersey Charity created under a will of a Jersey resident was transfer to the UK, and reregistered with the UK Charity Commission. The Revenue sought to apply Inheritance Tax.
Held: Jersey was to be considered a third country for the purpose . .
Lists of cited by and citing cases may be incomplete.

Taxes – Other

Updated: 20 April 2022; Ref: scu.675943