<b>ALTERNATIVE TECHNIQUES FOR COMBATING THE ABUSE OF LAW EMPLOYED BY EU LAW</b><br/>TÉCNICAS ALTERNATIVAS PARA COMBATER O ABUSO DE DIREITO EMPREGADO PELA LEGISLAÇÃO DA UE
ResumoThe present study/research aims to understand the functioning of prohibition of abuse of law in European Union, as a "legal technique" to deny the exercise of the right or exclude the application of EU law where a behavior is found abusive by the private. Such an analysis is indeed the starting point for understanding more deeply the normative meaning of this prohibition, also by placing it in relation with the other protection techniques of which the Union system disposes. More specifically, through a comparison with the use of alternative techniques, the aim of the research is to define whether this prohibition can be considered as an effective technique in EU law, that is to say concretely applicable to the fight against abuse. The role of the Court of Justice of the European Union in the fight against abuse: final considerations on the extent of the prohibition of abuse and its operation in EU law. The main objective of the research was to understand the legal meaning and operation of the prohibition on the abuse of rights in EU, as a legal technique to exclude the application of EU law or to deny the right attributed by EU law where abusive behavior by the private individual is found.
B. BERTRAND, Que reste-t-il des exigences impératives d’intérêt général?, in Europe, janvier 2012.
P. J. OLIVER, Oliver on Free Movement of Goods in the European Union, Hart Publishing, Oxford & Oregon, Portland, 2010, pp. 135ss.
V. HATZOPOULOS, Le principe communautaire d’équivalence et de reconnaissance mutuelle dans la libre prestation de services, Sakkoulas/Bruylant, Atene-Bruxelles, 1999, pp. 107ss. N. BERNARD, La libre circulation des marchandises, des personnes et des services dans le Traité CE sous l’angle de la competence, in Cahiers de Droit Européen, 34, 1998, pp. 11ss.
S. DEAKIN, Regulatory competition in european company law, in D. C. ESTY, D. GERADIN (a cura di), Regulatory competition and economic integration, Oxford University Press, Oxford, 2001, pp. 198ss.
J.-G. HUGLO, Liberté d’établissement et libre prestation des services, in Revue Trimestrielle de Droit Européen, 32 (4), 1996, pp. 742ss.
P. OLIVER, W. H. ROTH, The internal market and the four freedoms, in Common Market Law Review, 41 (4), 2004, pp. 407 ss., contra: V. HATZOPOULOS, Exigences essentielles, impératives ou impérieuses; une théorie, des théories ou pas de théorie du tout?, in Revue Trimestrielle de Droit Européen, 34, 1998, pp. 201-202.
ECLI:EU:C:1979:42, ECR 00649. For more details see: A. TRYFONIDOU, Further steps on the road to convergence among the market freedoms, in European Law Review, 16, 2010, pp. 36ss.
A.H. TÜRK, Judicial review in European Union law, Edward Elgar Publishers, Cheltenham, 2010. L. WOODS, P. WATSON, Steiner & Woods European Union law, Oxford University Press, Oxford, 2017, pp. 37ss C. BARNARD, S. PEERS, European Union law, Oxford University Press, Oxford, 2017, pp. 788ss.
CJEU, C-55/94, Gebhard v. Consiglio dell'Ordine degli avvocati e Procuratori di Milano of 30 November 1995, ECLI:EU:C:1995:411, I-04165 and in the same spirit see: C-120/78, Rewe-Zentral of 20 February 1979, ECLI:EU:C:1979:42, ECR 00649.
V. HATZOPOULOS, Exigences essentielles, impératives ou impérieuses; une théorie, des théories ou pas de théorie du tout?, op. cit., pp. 204ss.
A. HARTKAMP, C. SIEBURGH, W. DEVROE, Cases, materials and text on european law and private law, Hart Publishing, Oxford & Oregon, Portland, 2017, pp. 282ss.
CJEU, C-33/74, Van Binsbergen v. Bestuur van de Bedrijfsvereniging voor de Metaalnijverheid of 3 December 1974, ECLI:EU:C:1974:131, ECR 01299, par. 12. C-76/90, Sager of 25 July 1991, v. Dennemeyer of 25 July 1991, ECLI:EU:C:1991:331, I-04221, par. 12-15.
CJEU, C-212/97, Centros v. Ltyd v. Erberevs-og Selskabsstyrelsen of 9 March 1999, ECLI:EU:C:1999:126, I-01459,
L. CERIONI, The “abuse of rights” in EU company law and EU tax law. A re-reading of the ECJ case law and the quest for a unitary notion, in European Business Law Review, 21 (4), 2010 pp. 792ss. considers that the CJEU would suggest in this way that, without negative effects for the protection of creditors, there can be no abusive behavior, despite the choice of a less restrictive company regime for the establishment of the company which would then carry out all the activities through a branch in another Member State.
Thus, paragraph 37. The CJEU accordingly establishes that the refusal to register the branch of the company incorporated in another Member State is incompatible with the European Union provisions, while underlining, again, in closing, that such a interpretation "does not rule out that the authorities of the Member State concerned may take all appropriate measures to prevent or penalize fraud both with regard to the company itself, possibly in cooperation with the Member State in which it is constituted, and to the members (...)", (par. 38).
C-33/74, Van Binsbergen v. Bestuur van de Bedrijfsvereniging voor de Metaalnijverheid of 3 December 1974, op. cit.,
M. POIARES MADURO, M. WIND, The transformation of Europe: Twenty-five years on, op. cit. pp. 321ss. A. MANGAS MARTÍN, Tratado de la Uniòn Europea, Tratado de Funcionamiento, op. cit.
A. MANGAS MARTÍN, Tratado de la Uniòn Europea, Tratado de Funcionamiento ed. Marcial Pons, Madrid, 2018.
C-148/91, Veronica Omroep Organisatie v. Commissariaat voor de Media of 3 February 1993 Veronica of 3 February 1993, ECLI:EU:C:1993:45, I-00487, par. 12.
For more details see: C. DENYS, Affaire no C-19/92, Dieter Kraus et Land Baden- Württemberg, in Cahiers de Droit Européen, 32, 1994, pp. 638ss.
L. J. SMITH, Postgraduate degrees, vocational training and reverse discrimination: the narrow divide, in European Law Review, 19, 1994, pp. 67ss. W.H. ROTH, Case C-19/92, Dieter Kraus v. Land Baden-Württemberg, Judgement of 31 March 1993, in Common Market Law Review, 30, 1993, p. 1251 ss.
CJEU, C-19/92, Kraus of 31 March 1993, ECLI:EU:C:1993:125, I-01663. Mr Kraus, a German national, and the Land Baden-Wuerttemberg, opposed the dispute as to the latter's refusal to recognize that the use of the postgraduate university degree obtained by Mr Kraus in the United Kingdom in the absence of prior authorization, prescribed by the German legislation. Mr Kraus, in fact, had refused to formally request authorization, claiming that the fact of requiring prior authorization for the use of a university degree obtained in another Member State constituted an obstacle to the free movement of persons and a discrimination, prohibited by the EEC Treaty, since such authorization was not required for the use of a diploma issued by a German institute.
The CJEU had already ruled in a similar case, C-61/89, Bouchoucha of 3 October 1990, ECLI:EU:C:1990:343, I-03551, par. 14. legitimizing the French legislation which, in the absence of harmonization, reserved osteopathy only for holders of the medical degree. At that juncture, the CJEU noted that, lacking a European Union regulation of the osteopath profession, each Member State is free to regulate the exercise of this activity on its territory, without giving rise to discrimination between its own citizens and those of other States. members (par. 12). In particular, a Member State has a legitimate interest in preventing some of its citizens from escaping the empire of national laws in the field of vocational training, thanks to the possibilities offered by the Treaty. "This would occur in particular if the fact, for a national of a Member State, of having obtained in another Member State a diploma, the extent and value of which is not recognized by any European Union provision, could oblige the Member State origin to allow him to carry out activities related to that diploma on his territory, where the performance of such activities is reserved for holders of a higher qualification mutually recognized at European Union level and that this reserve does not appear to be arbitrary (...)" (par. 15). It therefore resolves the question raised by the Cour d'appel of Aix-en-Provence in the sense that, in the absence of harmonization at European Union level of activities pertaining exclusively to the exercise of the medical profession, Article Article 52 of the Treaty (now Article 49 TFEU) does not preclude a Member State from reserving a paramedical activity, such as osteopathy in particular, solely for holders of the medical degree.
Paragraph 35. It should be noted that the CJEU, thus ruling, does not accept the thesis proposed by AG Van Gerven in his Opinion of 13 January 1993, according to which "the prohibition, punishable by penalties, of using false diplomas is sufficient in itself to broadly protect the good faith of the public", which would be enough to make such national legislation contrary to the principle of necessity and/or proportionality (paragraph 13). It is interesting to note that, from the point of view of the abuse, the AG distinguished the present case from the Bouchoucha case: "This reservation of the Bouchoucha judgment to the general principle set out in the Knoors ruling does not seem relevant to me in this case. It should be read in relation to the subject-matter of the dispute, which, as I have already noted (par. 15), concerned the use of a diploma (British) which, according to the holder's claims, gave access to a regulated profession (in France). Well, so it is not in the present species, since Mr. Kraus does not try to use his LL.M. for the purpose of exercising a regulated profession in the Federal Republic of Germany, but only intends to take advantage of the degree connected to the diploma. Furthermore, the reservation made in the Bouchoucha judgment is motivated by the concern to avoid that, thanks to the possibilities offered by the Treaty, national citizens attempt to circumvent, in a sector as sensitive as the medical and para-medical one, the application of internal laws in access to a regulated profession. The judgment in question should rather be read in the light of the CJEU's case-law referred to in paragraph 13: case-law, from which it is inferred that the national rules designed to prevent the fundamental freedoms guaranteed by the Treaty from being abused are compatible with the purpose, for example, to circumvent the mandatory internal rules on vocational training. As I have pointed out in this connection, however, the protection, the authorization, claiming that the fact of requiring prior authorization for the use of a university degree obtained in another Member State constituted an obstacle to the free movement of persons and discrimination , forbidden by the EEC Treaty, since such authorization was not required for the use of a diploma issued by a German institute.
CJEU, C-61/89, Bouchoucha of 3 October 1990, op. cit.
CJUE, C-61/89, Bouchoucha of 3 October 1990, op. cit.
A. HARTKAMP, C. SIEBURGH, W. DEVROE, Cases, materials and text on european law and private law, op. cit.
CJEU, joined cases C-397/98 and C-410/98, Metallgesellschaft and others, of 8 March 2001, ECLI:EU:C:2001:134, I-01727, par. 37. for more details see: N. BAMMENS, The principle of non-discrimination in international and european tax law, IBFD, Leidend, 2012.
CJEU, C-307/97, Saint-Gobain ZN of 21 September 1999, ECLI:EU:C:1999:438, I-0616, par. 35. A. DE GRAAF, M. EVERS, Limiting benefit shopping cit., p. 281 ss.
See, N. VINTHER, E. WERLAUFF, Tax motives are legal motives-The borderline between the use and abuse of the freedom of establishment with reference to the Cadbury Schweppes Case, in European Taxation, 6, 2006, pp. 385ss.
CJEU, C-264/96, Imperial Chemical Industries plc (ICI) v. Kolmer, of 16 July 1998, ECLI:EU:C:1998:370, I-04695. The referring CJEU essentially asked whether the freedom of establishment precluded a legislation of a Member State which, as regards the companies established in that Member State and forming part of a consortium through which they hold a holding company, subordinated the right to remission. tax on the condition that the holding company's business was to hold exclusively or principally the shares of subsidiaries established in the Member State concerned. For analysis see: S.E. BÄRSCH, Taxation of hybrid financial instruments and the remuneration derived therefrom in and international cross-border context: Issues and options for reform, ed. Springer, Berlin, 2012.
CJEU, C-324/00, Lankhorst-Hohorst GmbH of 12 December 2002, ECLI:EU:C:2002:749, I-11799. The referring CJEU doubted the compatibility with the freedom of establishment of national legislation adopted to combat under-capitalization, which substantially offset a subsidiary from the fiscal point of view on account of the fact that the parent company was established in another Member State to the subsidiary. For more analysis see: O. F. GRAF KERSSENBROCK, In the wake of Lankhorst-Hohorst, in Intertax, 2004, pp. 306ss. D. GUTMANN, L. HINNEKENS, The Lankhorst-Hohorst case. The ECJ finds German thin capitalization rules incompatible with freedom of establishment, in EC Tax Review, 3, 2003, pp. 90ss. L. IDOT, Un régime différencié pour l’octroi du credit d’impôt en matière d’impôt sur les sociétés est contraire à l’article 43 CE, in Europe, 55, février 2003, pp. 17ss. N. VINTHER, E. WERLAUFF, The need for fresh thinking about tax rules on thin capitalization: the consequences of the judgment of the ECJ in Lankhorst- Hohorst, in EC Tax Review, 3, 2003, pp. 97ss.
ECLI:EU:C:2002:749, I-11799. The referring CJEU doubted the compatibility with the freedom of establishment of national legislation adopted to combat under-capitalization, which substantially offset a subsidiary from the fiscal point of view on account of the fact that the parent company was established in another Member State to the subsidiary. For more analysis see: O. F. GRAF KERSSENBROCK, In the wake of Lankhorst-Hohorst, in Intertax, 2004, pp. 306ss. D. GUTMANN, L. HINNEKENS, The Lankhorst-Hohorst case. The ECJ finds German thin capitalization rules incompatible with freedom of establishment, in EC Tax Review, 3, 2003, pp. 90ss. L. IDOT, Un régime différencié pour l’octroi du credit d’impôt en matière d’impôt sur les sociétés est contraire à l’article 43 CE, in Europe, 55, février 2003, pp. 17ss. N. VINTHER, E. WERLAUFF, The need for fresh thinking about tax rules on thin capitalization: the consequences of the judgment of the ECJ in Lankhorst- Hohorst, in EC Tax Review, 3, 2003, pp. 97ss.
Paragraph 37. Moreover, the CJEU adds in paragraph 38, according to the findings of the referring CJEU itself, that in this case there is no abuse, since the loan actually intervened to reduce, in favor of the appellant in the main proceedings, the burden of financial interests resulting from your bank credit. Furthermore, it is apparent from the documents that Lankhorst-Hohorst was, for the years 1996 to 1998, at a loss, for amounts largely higher than the interest paid to LT BV.
Judgment of the CJEU in case C-436/00, X and Y of 21 November 2002, ECLI:EU:C:2002:704, I-10829, concerning Swedish legislation concerning the sale of shares in companies constituted in accordance with the legislation of a Member State in which the transferor holds an investment of a subsidiary established in the Kingdom of Sweden by that company.
CJEU, C-436/00, X and Y of 12 December 2002, op. cit.,
The CJEU considers that: "the measure adopted by the Kingdom of Sweden is not suitable for achieving the objective that should be pursued, ie that the transfer is effectively taxed in Sweden for the capital gains realized on the shares sold, in particular if the sale is produced before a definitive transfer of the latter abroad. In fact, it must be stated that, in the event of the sale of Type C shares, the transfer benefits in any case of a postponement of the tax payment on the capital gains realized on the shares sold. Now, in response to a question put by the CJEU, the Swedish Government has not been able to show that, for this type of assignment, there are different objective situations from which it can be deduced that the potential risk resulting in a permanent transfer abroad of the the transfer, with regard to its tax liability, is essentially in different terms for the sale of type A and type B shares (...)" (par. 63).
Judgment of the CJEU: C-9/02, Hughes de Lasteyrie du Saillant of 11 March 2004, ECLI:EU:C:2004:138, I-02409. The national CJEU asked whether the art. 52 TEC (now 49 TFEU) opposed the establishment, by a Member State, for the purpose of preventing the risk of tax evasion, of an imposition system, on the date of transfer of the domicile of a tax payer outside France , of capital gains on social rights, where the latter were determined by the difference between the value of these rights on the date of said transfer and their purchase price. This tax only applied to taxpayers who held rights in the social profits of a company that exceeded 25% of such profits at any time during the last five years preceding the aforementioned date. The peculiarity of the wording lay in the fact that it concerned the imposition of latent capital gains. The CJEU immediately notes that the taxpayer wishing to transfer the domicile outside French territory, in the exercise of the right guaranteed to him by art. 52 of the Treaty (now art. 49 TFEU), is subject to unfavorable treatment compared to a person who retains his residence in France. However, it checks whether this provision can be justified. For more details see. S. KODANIS, French exit tax incompatible with the freedom of establishment, in European Taxation, 4, 2004, pp. 375ss. J.P. MAUBLANC, Liberté d’établissement- Incompatibilité aves les traités communautaires de la taxation à la sortie par l’article 167 bis du CGI CJCE 11 mars 2004 no 9/02 de Lasteyrie du Saillant, in Revue du Marché Commun et de l’Union Européenne, 444, 2004, pp. 684ss.
Paragraph 24. The French Government stated that the adoption of the provision at issue was inspired by the behavior of certain taxpayers consisting in temporarily transferring their tax domicile before transferring securities for the sole purpose of avoiding the payment of capital gains tax due in France. Even more clearly, as reported in the Opinion of the AG in paragraphs 53 and 54, "The French Government, which has presented the most detailed arguments on this point, explains that the contested provision seeks to prevent what should be defined as an abuse of law, ie the fraudulent use by a taxpayer of the freedoms conferred on him by European Union law. In this regard, the Government points out that a Member State is free to define the way in which capital gains are taxed, particularly as regards tax rates. It would therefore be entirely legitimate for each Member State to take appropriate measures to prevent the taxation of capital gains from being deprived of substance because of abusive behavior. In the present case, that behavior consists in the fact that a taxpayer temporarily transfers his tax residence outside France before transferring securities for the sole purpose of avoiding the payment of capital gains tax payable in France. In this case it would not be a normal exercise of the freedom of establishment, but of an abusive use of this freedom, in order to circumvent the tax legislation (...)".
ECLI:EU:C:2004:138, I-02409. The national CJEU asked whether the art. 52 TEC (now 49 TFEU) opposed the establishment, by a Member State, for the purpose of preventing the risk of tax evasion, of an imposition system, on the date of transfer of the domicile of a tax payer outside France , of capital gains on social rights, where the latter were determined by the difference between the value of these rights on the date of said transfer and their purchase price. This tax only applied to taxpayers who held rights in the social profits of a company that exceeded 25% of such profits at any time during the last five years preceding the aforementioned date. The peculiarity of the wording lay in the fact that it concerned the imposition of latent capital gains. The CJEU immediately notes that the taxpayer wishing to transfer the domicile outside French territory, in the exercise of the right guaranteed to him by art. 52 of the Treaty (now art. 49 TFEU), is subject to unfavorable treatment compared to a person who retains his residence in France. However, it checks whether this provision can be justified. For more details see. S. KODANIS, French exit tax incompatible with the freedom of establishment, in European Taxation, 4, 2004, pp. 375ss. J.P. MAUBLANC, Liberté d’établissement- Incompatibilité aves les traités communautaires de la taxation à la sortie par l’article 167 bis du CGI CJCE 11 mars 2004 no 9/02 de Lasteyrie du Saillant, in Revue du Marché Commun et de l’Union Européenne, 444, 2004, pp. 684ss.
CJEU, C-370/90, C-370/90, The Queen/Immigration Appeal Tribunal and Surinder Singh, ex parte Secretary of State for the Home Department of 7 July 1992, op. cit., and the conclusions presented on 13 March 2003, par. 64. The AG, while acknowledging that the case-law recognized the fight against tax evasion as an overriding reason of general interest, points out that the national provision in question determines, an "irrefutable presumption of tax fraud".
M. LANG, The Marks & Spencer case-The open issues following the ECJ’s final word, in European Taxation, 6, 2006, pp. 54ss. T. O’SHEA, Marks and Spencer v. Halsey (HM Inspector of Taxes): Restriction, justification and proportionality, in EC Tax Review, 6, 2006, pp. 66ss.
Parr. 49-51. A. ZALASINSKI, Some basic aspects of the concept of abuse in the tax case law of the European Court of Justice, in Intertax, 2008, pp. 163ss, notes how this ruling shows that the Court of Justice is increasingly inclined to recognize that cross-border activities can increase the risk of tax avoidance for Member States. Therefore, in principle, the prevention of tax abuses appears to be a valid justification for restrictions on free movement, provided that the measures are proportionate.
ECLI:EU:C:2005:763, I-010837. K. DZIURDZ, C. MARHGRABER, Non discrimination in european and tax treaty law. Open issues and recent challenges, Open issues and recent challenges, Linde Verlag, Wien, 2015.
Paragraph 55. "At a time when, in a Member State, the parent company demonstrates to the tax authorities that these conditions are met, it is contrary to Articles 43 EC and 48 EC to exclude the possibility for the latter to deduct from its taxable income in that Member State the losses incurred by its non-resident subsidiary. In this context, it is still necessary to clarify that the Member States remain free to adopt or maintain in force rules having the specific objective of excluding purely artificial constructions from a fiscal advantage, the purpose of which is to circumvent national tax legislation (see in this sense, cited judgments par. 26, and de Lasteyrie du Saillant, par. 50)" (parr. 56 and 57).
A. ZALASINSKI, Some basic aspects of the concept of abuse in the tax case law of the European Court of Justice, in Intertax, 2008, pp. 160ss.
V. EDWARDS, P. FARMER, The concept of abuse in the freedom of establishment of companies: A case of double standards?, op. cit., pp. 213ss, they point out how, in reality, this first jurisprudence did not provide a certain answer to the question about the possibility of a "doubling" of the concept of abuse, which can be understood as a tool to limit the concrete application of fundamental freedoms, in based on the consideration that certain constructions are not worthy of protection, either as justification.
K. LENAERTS, The concept of "abuse of law" in the case law of the European Court of Justice on direct taxation, in Maastricht Journal of European and Comparative Law, 22, 2015, pp. 336ss.
In essence, it requires that the resident company demonstrates, on the one hand, that the significant decrease in UK tax which would result from the transactions between that company and the SEC was not the objective, or one of the main objectives, of the transactions and, secondly, that the obtaining of a reduction of the tax by distraction of profits in the sense of that legislation was not the main reason, or one of the main reasons, of the establishment of the SEC.
In this regard, the CJEU notes that "by providing for the inclusion of the profits of a SEC subject to a very favorable tax regime in the taxable base of the resident company, the said legislation allows counteracting practices aimed at nothing other than circumventing the tax normally due on profits generated by activities carried out on the national territory. As noted by the French, Finnish and Swedish Governments, such legislation is therefore appropriate for achieving the objective for which it was adopted (...)"(par. 59).
G.T.K. MEUSSEN, Cadbury Schweppes: The ECG significantly limits the application of CFC rules in the Member States, op. cit., pp. 19, criticizes the CJEU view regarding the burden of proof. According to the author, in fact, the CJEU should have clearly stated that it is the Member State in question that has to provide proof of the existence of a construction of pure artifice (and not, vice versa, that the company resident to provide proof which is not a purely artificial construction). In the same spirit see also: par. 67. It should be noted that the CJEU recalls in detail only the first of the three criteria detailed in the Opinion of the AG, namely the level of physical presence of the subsidiary in the State of establishment, linking it to the effectiveness of the activity it provides. In particular, according to the lawyer general, "even if the subsidiary proves to be just a simple executive instrument, because the decisions necessary to perform the services for which it is paid are taken at other levels, it is legitimate to consider the reconditioning of such benefits are a mere artifice of the state of establishment (...)" (par. 113).
The value added by the subsidiary's activity should also be verified. This is undoubtedly the most delicate criterion to be implemented if the services provided by the latter actually correspond to the exercise of real activities in the State of establishment, but nevertheless useful for taking account of the objective situation in which the services provided by the subsidiary are missing. of any economic interest in relation to the activity of the parent company, to derive a totally artificial creation, given that the price paid by the parent company for the services in question seems, in some way, without compensation (...)" (par. 114).
The CJEU adds that "On the other hand, as the AG observed in par. 103 of the Opinion, the fact that the assets corresponding to the profits of the SEC could well have been carried out also by a company established in the territory of the Member State in which it is located. the resident company can not permit the conclusion that there is a construction of pure artifice "(paragraph 69). Must agree with R. KARIMERI, A critical review of the definition of tax avoidance in the case law of the European Court of Justice, in Intertax, 2009, pp. 308-310, when he states that, at first sight, the fact that the element of artificiality has been used to define in negative the purpose of freedom of establishment and correlatively the activities not covered on the basis of the objective element could be anomalous , both as an objective index of the desire to obtain an improper advantage, it is easy to repeat that the purpose of a rule, objective evidence and motives, in practice, are closely related. It is clear, in fact, that the CJEU will have to decide whether there has been an advantage contrary to the purposes of the rule, following which it may be relevant to assess whether abusive motivations exist, but, in practice, the verification of the reasons and the achievement of the purpose the norm takes place simultaneously, since it is largely based on the same objective evidence of artificiality. the great virtue of the test of purely artificial construction consists precisely in providing clear and unequivocal evidence of the abusive will, while demonstrating that the purpose of the tax rule in question has not been met.
Note that case C-196/04, Cadbury Schweppes and Cadbury Schweppes Overseas of 12 September 2006 was not an isolated ruling but was also applied in the UK in the Vodafone 2 case (C-203/05, Vodafone 2 of 20 August 2008, ECLI:EU:C:2008:460, not published), in which the CJEU of Appeal ruled that the CFC legislation could be interpreted in such a way as to comply with EU law, adding a new one exception, according to which the restrictive measure does not apply if the CFC is actually established in another Member State and carries out effective economic activities there. After being "received" by the national jurisdiction, this same ruling has then contributed to take a larger step, starting the legislative reform of the CFC legislation in the United Kingdom in the European Union sense since 2011. Perhaps a weight may have had the request of the May 2011 Commission to the United Kingdom to make further changes to the CFC rules, considering the inadequate response to Cadbury Schweppes (see Case No. 2009/4105, IP/11/606 of 19/05/2011). See in argument: T. O’SHEA, CFC Reforms in the UK-Some EU Law Comments, in EC Tax Journal, 13, 2012-2013, pp. 65ss. M.
BROBERG, N. FENGER, Preliminary references to the European Court of Justice, Oxford University Press, Oxford, 2014. M. HELMINEN, European Unin tax law: Direct taxation, IBFD, Leidend, pp. 102ss.
J. PETEVA, Abuse under EC tax law and the standard of eeview of the European Court of Justice, in M. LANG, P. MELZ, Value added tax and direct taxation: Similarities and Differences, IMFD, Amsterdam, 2009, pp. 498ss. It is recalled that "the mere fact that a resident company obtains a loan from a related company established in another Member State can not establish a general presumption of abusive practices, or justify a measure that jeopardizes the exercise of a fundamental freedom guaranteed by the Treaty", but "To be justified by reasons for combating abusive practices, a restriction on the freedom of establishment must have the specific purpose of hindering conduct consisting in creating purely artificial constructions, devoid of economic effectiveness and aimed at circumventing the normal tax on profits generated by activities carried out in the national territory (...)".
Paragraph 82. The question was raised about the compatibility with the freedom of establishment of the United Kingdom legislation which limited the possibility for a resident company to deduct the interest paid on loans granted by a parent company, whether directly or indirectly, for tax purposes, resident in another Member State, if the resident company would not have suffered such a restriction if the interest had been paid on loans granted by a parent company established in the United Kingdom. In particular, the national CJEU wondered whether the solution to such a question would change if it could be shown that the loans supplemented an abuse of rights or formed part of an artificial construction intended to circumvent the tax legislation of the Member State of residence of the borrowing company.
Paragraph 81. In this regard, the question is whether, in the absence of special relations between the companies concerned, the loan would not have been granted or if it would have been granted for a different amount or interest rate.
In contrast, in the case C-105/07, Lammers & van Cleeff of 17 January 2008, ECLI:EU:C:2008:24, I-00173 the CJEU excludes the compatibility of the Belgian legislation aimed at combating undercapitalization, as it went beyond what was necessary to achieve that objective: "even if interests granted to non-resident companies are retrained as dividends as soon as they go beyond such limit, it can not be ruled out that this redevelopment also applies to interests recognized as remuneration for loans granted under conditions of full competition "(paragraph 33).
Similarly, in the judgment of the case C-182/08, Glaxo Wellcome GmbH & Co. KG v. Finanzamt München II of 17 September 2009, ECLI:EU:C:2009:559, I-08591. The CJEU observes, in conclusion, that "Since legislation such as that in the main proceedings does not permit the limitation of its application to pure construction on the basis of objective factors , but extends to all cases in which the resident taxpayer has acquired shares in a company resident by a non-resident shareholder at a price which, for whatever reason, exceeds the nominal value of such shares, the effects of such legislation must be beyond what is necessary to achieve the objective of preventing frames of pure artifice, devoid of economic effectiveness and made for the sole purpose of unduly benefiting from a tax benefit "(paragraph 100) .Normative by virtue of which an" extraordinary "benefit or "without consideration" was subject to taxation by the resident company, if the company had granted it to a company in another Member State, against which that first company is linked, directly or indirectly, by interdependence. The legislation in question made it possible to adjust for tax purposes situations in which the companies concerned had been affected in their relationships by conditions which did not correspond to what they would have applied in a fully competitive regime (...)".
F. VANISTENDAEL, Halifax and Cadbury Schweppes: One single european theory of abuse in tax law?, in EC Tax Review, 6, 2006, pp. 194ss.The author points out that a construction that a Member State considers tax evasion only because it does not receive income, can be classified by the CJEU simply as an exercise of fundamental freedoms, which thus acquire the role of "saving clauses" for abusive practices think in a national perspective; in terms of taxation, this same theory can eventually lead to inequalities, always according to the same perspective, interfering with the distribution of the tax burden.
For example, in the case C-123/11, A Oy of 21 February 2013, ECLI:EU:C:2013:84, published in the electronic Reports of the cases, par. 27, the CJEU, following the case C-446/03, Marks & Spencer, Plc v. David Halsey of 13 December 2005, ECLI:EU:C:2005:763, I-010837, established that the legislation of a Member State which excludes, in the event of a merger between a parent company resident in that State and a subsidiary resident in the the possibility for the parent company established in that Member State to deduct from its taxable income the losses of the incorporated subsidiary established in another Member State, goes beyond what is necessary to achieve the essential part of the objectives pursued, in a situation where the non-resident subsidiary has exhausted the possibility of accounting for losses in its State of residence, which is the responsibility of the parent company to demonstrate.
A. SAYDÉ, Defining the concept of abuse of Union law, in Yearbook of European Law, 33 (1), 2014, pp. 151-152.
The dichotomy between the case C-196/04, Cadbury Schweppes and Cadbury Schweppes Overseas of 12 September 2006, on the one hand, and the Centros vein (C-212/97, Centros of 9 March 1999), on the other hand, would in truth be only apparent. In fact, the fact that the creation of a company in a certain State solely for the benefit of more advantageous legislation does not constitute an abuse, even when the institution carries out all its activities in the state of establishment, it is a fact that it is questioned in case C-196/04, Cadbury Schweppes and Cadbury Schweppes Overseas of 12 September 2006. If then there is no abuse even if the institution does not carry out any activity in the legal system whose law the private individuals have decided to exploit, when, as in Cadbury, the subsidiary actually and effectively operates in the Member State in which it is been created (Ireland), the choice to locate the company in a system different from the one of origin can not even more be considered an abusive conduct. The exercise of real economic activity in the member country of establishment then automatically excludes the abuse of EU law, but its absence does not only imply an abuse, representing only a presumption of abuse. The reason for which the right of establishment implies the actual exercise of an economic activity must then be understood as the recognition of the possibility of overcoming possible presumptions of abuse by proving the exercise of an effective activity in the member country whose law there you want to benefit.
There are those who argued that, in the CJEU's opinion, what matters is that real economic activities are carried out in relation to secondary establishment activity, such as T. O'SHEA, The UK's CFC rules, op. cit., pp. 30. Precisely from this observation it would therefore be possible to reach a conciliation: the cases: Segers (C-79/85, Segers of 10 July 1986), Centros (C-212/98, Centros of 9 March 1999) and C-167/01, Inspire Art of 30 September 2003, in fact, concerned all companies that were taxed in the United Kingdom under the tax rules of the country and that, although they had moved of the branches of activity in other Member States, in any case they remained Anglo-Saxon companies that carried out an effective economic activity.
According to other scholars, the various conclusions reached by the CJEU should be motivated by looking at the consequences of the operations on a case-by-case basis for the interests of third parties, a prospect that could demonstrate the similarity of the concept of abuse in the field of company law and in the field of tax law. the use of a different terminology, such as L. CERIONI, The "abuse of rights" in EU company law and EU tax law, op. cit., pp. 795-796. How the choice of a more favorable company law is not alone enough to prove the existence of an abuse if not accompanied by proven prejudice for the protection of specific interests of third parties, for example of creditors, in equal measure the choice to exercise the freedom of establishment in a Member State with tax legislation which is more favorable than that of the Member State of origin alone is not sufficient to prove the abuse, that is to say a "construction of pure artifice", but can become so if the absence of genuine economic activity in the host Member State demonstrates that the sole objective and result is to cause injury to the economic interests of the home Member State.
In particular see: N. VINTHER, E. WERLAUFF, Tax motives are legal motives, in the European Taxation, 46, 2006, pp. 385, pp. 384-385, make a distinction upstream, between subjects, to conclude that tax law should draw the boundary line between use and abuse differently from company law to prevent the exercise of European Union freedoms degenerate into a pure "cherry-picking" tax , so the dividing line should be set according to whether the structure is genuine or not in the sense already specified above.
J. VELLA, Sparking regulatory competition in european company law: A Response, in R. DE LA FERIA, S. VOGENAUER (a cura di), Prohibition of abuse of law: a new general principle of EU law?, Oxford University Press, Oxford, 2011. pp. 129ss.
L. CERIONI, The “abuse of rights” in EU company law and EU tax law, op. cit., pp. 795ss.
ECLI:EU:C:2003:512, I-10155, par. 96. In the same spirit see alo the case: C-411/03, SEVIC Systems of 13 December 2005, ECLI:EU:C:2005:762, I-10805. For more details see also: P. MÄNTYSAARI, The law of corporate finance: General principles and European Union law, ed. Springer, Berlin, 2010, pp. 254ss. J. BORG-BARTHET, The governing law of companies in European Union law, Hart Publishing, Oxford & Oregon, Portland, 2012, pp. 136, 143ss.
F. VANISTENDAEL, Halifax and Cadbury Schweppes: One single european theory of abuse in tax law?, in EC Tax Review, 15, 2006, pp. 193ss.op. cit., pp. 423. according to which the underlying economic idea is that if a Member State develops competitive and attractive economic infrastructures for investors, including through the reduction of taxes, so that the appeal of its tax system is growing, another Member State can not to think about introducing compensatory tax levies that burden on their residents established in the State with the most captivating legislation. This would result in a fragmentation of the single market in a variety of markets, thus hindering fundamental freedoms. Nevertheless, the "splitting the market" criterion must balance itself with the legal notion of abuse of the law to avoid excessive compression of the national interest.
A. ILIOPOULOU-PENOT, Liberté de circulation et abus de droit, in E. DUBOUT, A. MAITROT DE LA MOTTE (a cura di), L’unité des libertés de circulation: in varietate concordia?, ed. Bruylant, Bruxelles, 2013, pp. 196ss.
Suffice it to mention Kraus, in which it is clear from the facts of the case that the question was not so much the abuse of Mr Kraus, but rather his refusal to seek authorization, or the pronunciation Lankhorst-Hohorst GmbH, in which the CJEU, in paragraph 38, explicitly excludes the presence of an abuse.
According to M. POULSEN, Treaty/Directive shopping and abuse of EU law, in Intertax, 2013, pp. 236, underlining how two opposing interests clash in this area: on the one hand, the legitimate need of the Member States to effectively counter such behavior; on the other hand, the implementation of the integration and the related need not to introduce unjustified restrictions on free movement and the right of the tax payer to legitimately benefit from favorable tax legislation in other Member States.
D. WEBER, Abuse of law in european tax law: An overview and some recent trends in the direct and indirect tax case law of the ECJ-Part 2, in European Taxation, 13, 2013, pp. 313ss.
See, W. SCHÖN, Abuse of rights and european tax law, in J. A. JONES, P. HARRIS, D. OLIVER (a cura di) Comparative perspectives on revenue law-Essays in honour of John Tiley, Cambridge University Press, Cambridge, 2008, pp. 78ss.
M. POIARES MADURO, Interpreting european law: Judicial adjudication in a context of constitutional pluralism, in European Journal of Legal Studies, 1, 2007, pp. 8ss. It must be borne in mind that the interpretation of a provision of European Union law provided by the CJEU is limited to clarifying and specifying the meaning and scope of the provision, as it should have been understood and applied from the moment of its entry into force. It follows that the rule thus interpreted can and must be applied by the judge also to legal relationships which arose and developed before the interpretative sentence, provided, on the other hand, the conditions exist for submitting to the competent CJEU a dispute concerning the application of that rule.
Likewise, the judgment of case C-202/97, FTS of 10 February 2000, ECLI:EU:C:2000:75, I-00883, with reference to the problem of temporarily posted workers, deserves to be mentioned. In par. 43, in fact, the CJEU has clarified the meaning of the phrase "to exercise normally the activity in the territory of the State in which they are established", emphasizing the necessity that the enterprise carries out in an effective way, or preponderant, its activity in the place of settlement.
According to: A. ILIOPOULOU-PENOT, Liberté de circulation et abus de droit, op. cit., pp. 188ss, "(...) it will therefore look at both cases that mention the abuse, and in cases where the CJEU could have referred to the abuse, but did not do so, even in spite of the fact that the issue had been raised by the governments of the Member States. As a paradigmatic example, the CJEU's judgment in joined cases C-267/91 and C-268/91, Kech and Mithouard of 24 November 1993, ECLI:EU:C:1993:905, I-06097, in the matter of free movement of goods, in which the CJEU, in arriving at the conclusion that "Article. Article 30 of the EEC Treaty must be interpreted as not applying to the legislation of a Member State which generally prohibits the resale below cost", points out in paragraph 14 that economic operators increasingly invoke art. 30 of the Treaty in order to challenge any legislation which, while not involving products from other Member States, has the effect of limiting their commercial freedom, the CJEU considers it necessary to review and clarify its case law on the matter (...)".
Reference is made to cases in which the recognition of professional qualifications (previous paragraphs) and of the right of residence pertaining to the family member of a third country was discussed.
K. AMSTRONG, Mutual recognition, in C. BARNARD, J. SCOTT, The law of the single european market: Unpacking the premises, Hart Publishing, Oxford & Oregon, Portland, 2002, pp. 225. For an analysis of the C-56/96, VT4 v. Vlaamse Gemeenschap of 5 June 1997, ECLI:EU:C:1993:584, I-031143 in which the CJEU provided a restrictive interpretation of the criteria for identifying television broadcasters subject to the jurisdiction of a Member State pursuant to art. 2, n. 1, of the Directive, in the sense that a television broadcaster is subject to the jurisdiction of the Member State in which it is established and where there are several offices, of the State in which the broadcaster has the center of activity, with reference, in particular, to the place where the planning policy is decided and the final composition of the programs to be broadcast.
ECLI:EU:C:2003:491, I-09607. For more details see: R. PLENDER, Quo vadis? Nouvelle orientation des règles sur la libre circulation des personnes suivant l’affaire Akrich, in Cahiers de Droit Européen, (1-2), 2004, pp. 261 ss. C. SCHILTZ, Akrich: A clear delimitation without limits, in Maastricht Journal of European and Comparative Law, 12, 2005 (3), pp. 241ss. E. SPAVENTA, Case C-109/01, Secretary of State for the Home Department v. H. Akrich, judgment of the Full CJEU of 23 September 2003,  ECR 1- 9607, in Common Market Law Review, 42, 2005, pp. 225ss. The question of the national CJEU is also recalled: in particular, it was necessary to determine whether or not a European Union citizen could make use of the provisions of the Directive on the recognition of professional qualifications in his Member State of origin in order to have a diploma which was the result of mere homologation. of a three-year university degree course followed in his home Member State, without however requiring the citizen in question to have completed additional academic or professional training in the Member State of graduation.
Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications in the OJEU L 255, 30.9.2005, p. 22 ss. (hereinafter amended by Directive 2013/55 of the European Parliament and of the Council of 20 November 2013), has adopted the following definition of "training qualification": they must include "diplomas, certificates and other qualifications issued by an authority of a Member State designated in accordance with the laws, regulations and administrative provisions of that Member State and which enshrine professional training acquired predominantly in the European Union". However, recital 12 specifies that the Directive does not concern "the recognition by Member States of recognition decisions taken by other Member States in accordance with this Directive. Therefore, holders of professional qualifications which have been recognized under this Directive may not use that recognition in order to obtain, in their Member State of origin, rights other than those conferred by the professional qualification obtained in that Member State, unless demonstrate that they have obtained additional professional qualifications in the host Member State (...)".
It should be noted that the EC, to support the thesis of the restrictive interpretation of the concept of diploma, referred to the twelfth recital of Directive 2005/36/EC, which excludes from its scope "(... ) recognition by Member States of recognition decisions taken by other Member States under this Directive (...) in order to obtain, in their Member State of origin, rights other than those conferred by the professional qualification obtained in that Member State, unless (the persons concerned) prove that they have obtained additional professional qualifications in the host Member State (...)". However, the AG points out that this approach is not convincing because the decision relied on by Mr Cavallera is not a "recognition decision" based on the directive, but a type approval decision taken on the basis of national law. The Italian diploma, in fact, is not a "diploma" pursuant to art. 1, lett. a) of the Directive. This is precisely the problem in this case, given that the title obtained by Mr Cavallera in Italy, although sanctioning a three-year cycle of studies, does not however allow access to the profession of engineer in that state (...) the type approval and then the registration of engineers in Spain took place solely on the basis of national law and did not take place on the basis of Directive 89/48 (...)" (par. 27).
See parr. 31-33 of the conclusions. With this in mind, Spain must be considered free to determine access to the profession of engineer in Spain either on the basis of a decision to approve a training carried out on the territory of another Member State or on the basis of a diploma certifying its formation since the only requirement in the Directive is to impose that the certificate states' that the holder has successfully completed a cycle of post-secondary studies of a minimum duration of three years (...) showing that (.. .) possesses the professional qualifications required for access to a regulated profession in that Member State (...)" (par. 34).
Conclusions of the AG Poiares Maduro presented in case C-419/02, BUPA Hospitals Ltd and University of Huddersfield Higher Education Corporation v. Commissioners of Customs and Excise of 21 February 2006, ECLI:EU:C:2006:122, I-01685, par. 63.
In particular, the judgment of case C-130/88, Van de Bijl of 26 September 1989, ECLI:EU:C:1989:349, I-03039 is recalled here, in which the CJEU, faced with the objection of the national authority concerning the validity of the certificate issued by the United Kingdom, stated that, in principle, the host State is "normally bound by the declarations contained in the certificate issued by the Member State of origin" and "can not call into question the accuracy of the indication of the activities exercised by the person concerned or their duration (...)" (parr. 22 to 23), except in cases where the attestation produced contains a manifest inaccuracy. On this point, AG Darmon in his conclusions presented on 19 April 1989 referred to the maxim fraus omnia corrumpit as a general principle common to the Member States, stating that, since fraud spoils everything, "a host State which does not have them. wanted, of a certain number of elements proving that the competent authority of the State of origin was misled when the certificate is issued can oppose such fraud (...)" (par. 17).
CJEU, C-109/01, Akrich of 22 September 2003, ECLI:EU:C:2003:491, I-09607.
CJEU, C-1/05, Jia of 9 January 2007, ECLI:EU:C:2007:01, I-00001. For details see: F. KAUFF-GAZIN, Droit de séjour de l'ascendant à charge, membre de la famille du ressortissant communautaire, in Europe, 86, 2007, Comm. n. 86, pp. 14-15. J. H. REESTMAN, No legal residence requirements for the admission of family members with a third-country nationality of migrated Union citizens, in European Constitutional Law Review, 3, 2007, pp. 463ss. A. TRYFONIDOU, Jia or “Carpenter II”: the edge of reason, in European Law Review, 32, 2007 pp. 909ss.
ECLI:EU:C:2007:01, I-00001 Paragraph 31. The CJEU recalls in paragraph 30 that in the Akrich case with reference to a situation of a couple, he intended to return to the United Kingdom using European Union law, so that Mr Akrich could enter that country as a spouse of a citizen of the Union who had used his freedom of movement, "the referring CJEU before which the dispute was pending had asked the CJEU what measures the Member States could take to to combat the behavior of family members of a European Union citizen who did not fulfill the conditions established by national law for entering and staying in a Member State.
CJEU, C-459/99, MRAX of 25 July 2002 ECLI:EU:C:2002:461, I-06591 and the case: C-60/00, Carpenter of 11 July 2002, ECLI:EU:C:2002:434, I-06279. In the MRAX ruling the CJEU had stated, inter alia, that "Article 4 of Directive 68/360 and 6 of Directive 73/148 must be interpreted as meaning that they do not authorize a Member State to refuse to issue a residence permit and to take a measure of expulsion against a third-country national who can provide proof of his identity and of his marriage to a national of a Member State, for the sole reason that he entered the territory of the Member State concerned illegally (emphasis added)" (par. 80). See in argument for more analysis and details: S. ACIERNO, The Carpenter judgment: fundamental rights and the limits of the European Union legal order, in European Law Review, 28, 2003, pp. 398ss, it is noted, with regard to Carpenter, that if the specific circumstances relating to the two cases could well explain the different reasoning followed by the CJEU, it is difficult to draw a general rule in relation to the rights and status of family members of Union citizens who are illegally present on the territory of the Union. As rightly stated by the. the question remains to understand whether irregular migrants fall within the scope of EU law. Article. 49 EC, read in light of the fundamental right to respect for family life, must be interpreted as meaning that it precludes the Member State of origin of a service provider established in that State, who provides services to recipients established in other States Member States, deny the right of residence in its territory to the spouse of that lender, a national of a third country, even if he does not have a residence permit in any Member State (see par. 46). for more details see: N. ROGERS, R. SCANNEL, W. ROBINSON, Free movement of persons in the enlarged European Union, Sweet & Maxwell, London, 2012, pp. 190ss.
It is also noted that AG Geelhoed in his conclusions in Akrich proposed a solution based on MRAX and Carpenter, suggesting that third-country nationals who entered the territory of an unlawful Member State should fall within the scope of Regulation no. 1612/68, even if their state was illegal and therefore the refusal of the Member State should have been valid as an exception invoking reasons of public interest.
CJEU, C-127/08, Metock and others of 25 July 2008, ECLI:EU:C:2008:449, I-06241. The referring CJEU emphasizes that none of the marriages at issue in the main proceedings was a fictitious marriage.
C. COSTELLO, Metock: Free movement and “normal family life” in the Union, in Common Market Law Review, 46, 2009, pp. 587ss. J. FAULL, Prohibition of abuse of law: A new general principle of EU Law, in R. DE LA FERIA, S. VOGENAUER (a cura di), Prohibition of abuse of law: a new general principle of EU law?, Oxford University Press, Oxford, 2011, pp. 291-293.
Thus, the CJEU concludes that "since the third-country national, family member of a Union citizen, derives from Directive 2004/38/EC entry and residence rights in the host Member State, the latter may limit such rights only in compliance with articles 27 and 35 of the said directive", thereby relying on the jurisprudence according to which, where there is a secondary legislation, the tools against the abuse must be sought within the same discipline, and not be entrusted to restrictive initiatives by the Member States. In this way, the notion of abuse in this area seems to have been mainly attributed to the abuse of family law, with the help of a fictitious marriage.
The same happened with reference to the freedoms attributed to self-employed workers. As is known, in fact, the established worker is required to comply with national provisions, unlike the service provider, who, however, is in principle subject to the law of the State of origin and not to that of the State destination of the service. Having to distinguish the two freedoms, the CJEU used the interpretative technique. See, in particular, the judgment of case C-55/94, Gebhard v. Consiglio dell'Ordine degli avvocati e Procuratori di Milano of 30 November 1995, ECLI:EU:C:1995:411, in which the CJEU has established the temporary nature of the provision of services, must be assessed taking into account the duration, frequency, frequency and frequency of continuity of the service itself.
Thus, for example, in the judgment of case C-344/87, Betray of 31 May 1989, ECLI:EU:C:1989:226, I-01621, the CJEU ruled out that they can be regarded as real and effective, those activities which represent only an instrument for the re-education or reintegration of those concerned (paragraph 17); furthermore, in the judgment of case C-197/86, Brown v. Secretary of State for Scotland of 21 June 1988, ECLI:EU:C:1988:323, I-03205, he excluded that a national of a Member State obtains the right to a grant in another Member State as a worker, when it is undisputed that he has become solely as a consequence of his admission to the university in order to undertake the studies in question (parr. 27 to 28). or more details see: S. WEATHERILL, Law and values in the European Union, Oxford University Press, Oxford, 2016. G. ROBINSON, Optimize European Union law, ed. Routledge, London & New York, 2014, pp. 137ss.
We remember the landmark decisions from the CJEU: C-184/99, Crzelczyk of 20 September 2001, ECLI:EU:C:2001:458, I-06193. C-456/02, Trojani of 7 September 2004, ECLI:EU:C:2004:488, I-07573. For more details see: F. PENNINGS, M. SEELEIB-KAISER, European Union citizenship and social rights: Entitlements and impediments to accessing welfare, Edward Elgar Publishers, Cheltenham, 2018. E. CLOOTS, National identity in European Union law, Oxford University Press, Oxford, 2015.
In the Grzelczyk judgment (C-184/99, Grzelczyk of 20 September 2001, ECLI:EU:C:2001:458, I-06193) the CJEU, passing the previous case C-197/86, Brown v. Secretary of State for Scotland of 21 June 1988, ECLI:EU:C:1988:323, I-03205, admitted that "The fact that a citizen of the Union conducts university studies in a Member State other than that of which he is a national can not, in itself, deprive him of the possibility of using the ban of any discrimination based on citizenship "(paragraph 36), after having noted that" the status of a citizen of the Union is intended to be the fundamental status of nationals of the Member States which allows those of them in the same situation to obtain , regardless of citizenship and subject to the exceptions expressly provided for in this regard, the same legal treatment (...)" (par. 31). For more details see: S. CURRIE, Migration, work and citizenship in the enlarged European Union, ed. Routledge, London & New York, 2016. F. PENNINGS. M. SEELEIB-KAISER, European union citizenship and social rights. Entitlments and impediments to accessing welfare, Edward Elgar Publishers, Cheltenham, 2018.
In the Trojani ruling, (C-456/02, Trojani of 7 September 2004, ECLI:EU:C:2004:488, I-07573.) the CJEU also concluded that "a citizen of the European Union who does not have a right of residence in the host Member State under Articles 39 EC, 43 EC or 49 EC (now arts. 45, 49 and 56 TFEU) can, by virtue of his status as a citizen of the Union, enjoy a right of residence for the direct application of art. 18, n. 1, EC "(paragraph 46), after reiterating that" the host Member State may find that a national of another Member State who has made use of social assistance no longer meets the requirements to which his right of residence is subject. In that case, the host Member State may adopt a removal measure, subject to the limits imposed by European Union law. However, recourse to the social assistance system by a citizen of the Union can not automatically lead to such a measure (see, to that effect, Grzelczyk, (C-184/99, Grzelczyk of 20 September 2001, op. cit., parr. 42 and 43) (...)" (par. 45).
See, for example, the judgment of the case C-209/03, Bidar of 15 March 2005, ECLI:EU:C.2005:169, I-02119, where it is stated, in paragraphs 57 and 59: "As regards aid to cover student maintenance costs, it is also legitimate whereas a Member State grants such aid only to students who have demonstrated a certain degree of integration in the society of that State (...) the existence of a certain degree of integration can be considered to have been proven following ascertaining that the student in question stayed for a certain period in the host Member State (...)". O. GOLYNKER, Jobseekers’ rights in the European Union: challenges of changing the paradigm of social solidarity, in European Law Review, 30, 2005, pp. 117ss. C. O’BRIEN, Real links, abstract rights and false alarms: the relationship between the ECJ’s real link case law and national solidarity, in European Law Review, 33, 2008, pp. 643ss.
R. WHITE, Free movement, equal treatment, and citizenship of the Union, in International and Comparative Law Quarterly, 55, 2005, pp. 905ss, it is noted that the test of the real and effective connection is a fair and effective way of recognizing the legitimate concerns of the Member States. He noted that this test is in fact a way to enable Member States to rely on a potentially indirectly discriminatory precondition, by limiting the access of EU citizens to social assistance. P. J. NEUVONEN, In search of (even) more substance for the "real link" test: comment on Prinz and Seeberger, in European Law Review, 39, 2014, pp. 134ss, considers that this diversity of approach is partly due to the fact that the test of the actual link can justify different outcomes, depending on how the substance of the link is defined.
A. SAYDÉ, One law, two competitions: An enquiry into the contradictions of free movement law, in Cambridge Yearbook of European Legal Studies, 2010-2011, pp. 395ss.
It is recalled here that the CJEU had been called, inter alia, to determine whether the right of access and residence in the territory of a Member State could be denied to a worker who was pursuing, by entry and stay in a Member State, mainly for purposes other than the exercise of a subordinate activity. In part. 16 affirms that: "From the wording of the principle of the free movement of workers and the placing of the relevant provisions in the Treaty, it is clear that these rules guarantee only the free movement of persons who exercise or intend to "economic activity" (...)".
See par. 21. Levin's ruling (C-53/81, Levin v. Staatssecretaris van Justitii of 23 March 1982, ECLI:EU:C:1982:105, I-01035 ) was then resumed in the judgment of case C-66/85, Lawrie-Blum v. Land Baden-Württemberg of 3 July 1986, ECLI:EU:C:1986:284, I-02121, where, in providing the concept of worker, the CJEU states that "even the fact that the trainee only performs a reduced number of hours per week and receive only a wage below the minimum salary of a tenured teacher at the beginning of the career precludes his qualification as a worker. In the aforementioned Levin ruling (C-53/81, Levin v. Staatssecretaris van Justitii of 23 March 1982), the CJEU has in fact declared that the concepts of "worker" and "subordinate activity" must be understood so as to include those who, not carrying out a full-time activity, receive only a lower remuneration than contemplated for full-time activity, provided that this involves the exercise of real and effective activities.
CJEU, C-138/02, Collins of 23 March 2004, ECLI:EU:C:2004:172, I-027093. Mr. Collins, a US and Irish citizen, after working part-time and occasionally in the United Kingdom between 1980 and 1981, returned there in 1998 to find work in the social services sector, asking for compensation for job seekers, who was refused because he did not usually reside in that Member State. See, E. MUIR, Statut et droits du demandeur d'emploi-travailleur-citoyen: confusion ou rationalisation?, in Revue du Droit de l'Union Européenne, 2004, p. 249ss.
C. COSTELLO, Citizenship of the Union: above abuse?, in R. DE LA FERIA, S. VOGENAUER (a cura di), Prohibition of abuse of law: a new general principle of EU law?, op. cit., pp. 348ss. G. DAVIES, The high water point of free movement of persons: Ending benefit tourism and rescuing welfare, in Journal of Social Welfare and Family Law, 26, 2004, pp. 211–222. Contra M. DOUGAN, Some comments on the idea of a general principle of Union law prohibiting abuses of law in the field of free movement for Union citizens, in R. DE LA FERIA, S. VOGENAUER (a cura di), Prohibition of abuse of law: a new general principle of EU law?, op. cit., pp. 359 notes that Collins was cited as an example of the conduct of an individual who would constitute an abuse of the right of movement on the grounds that an economically inactive citizen had made unjustified demands for a financial subsidy from the host state's welfare resources. However, Collins is only one of the judgments that enter into a substantial jurisprudence (see judgments C-184/99, Grzelczyk of 20 September 2001, op. cit., C-456/02, Trojani of 7 September 2004, C-209/03, Bidar of 15 March 2005, C-158/07, Förster of 18 November 2008, ECLI:EU:C:2008:630, I-08507, C-224/98, D'Hoop v. Office National d'emploi of 11 July 2002, ECLI:EU:C:2002:432, I-06191) which deals with such problems. For more details see: N. ROGERS, R. SCANNELL, J. WALSH, Free movement of persons in the enlarged European Union, Sweet & Maxwell, London, 2012. E. GUILD, S. PEERS, J. TOMKIN, The European Union citizenship directive. A commentary, Oxford University Press, Oxford, 2014. P. LOUTRAKOS, M. NIC SHUIBHNE, P.