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No capital duty
The Italian claimant company acquired a subsidiary company. It then acquired its Italian parent company by way of a reverse merger whereby the claimant acquired all the assets of the parent in exchange for which all the claimant's shares were transferred to the parent's shareholders.
The company claimed that a registration duty of 1% which was charged on the value of the assets and liabilities of the companies acquired was contrary to Community law.
The Court of Cassation sought a ruling from the European Court as to whether the duty was compatible with Council Directive 69/335/EEC (concerning indirect taxes on the raising of capital) Article 10 of which stated that apart from capital duty permitted by Article 4 no duty should be charged on the transactions in Article 4.
Article 4(1)(c) required the imposition of capital duty on 'an increase in the...
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