Briefing of the Academy of European Law (ERA) on the Persche case

10-03-2009
The case has crusial consequence on the tax treatment of cross-border giving in the Member States.

On March 10 the Academy of European Law (ERA) organized a briefing session in Brussels on the consequences of the European Court of Justices judgment of 27 January 2009 in the Persche case.

The Court ruled that the refusal to grant the same fiscal benefits to cross-border charitable donations as to domestic ones contravenes the principle of free movement of capital. The case raises a number of key questions, in particular how national tax authorities determine whether a beneficiary of a cross-border donation in another Member State is equivalent to an institution benefiting from tax-deductible status in the Member State of the donor. The briefing explored these issues in detail, including how certain Member States - notably the Netherlands - have already addressed them.

In the course of the presentation, participants learnt that the European Commission has launched the infringement procedure against 21 Member States, whose respective tax regulation does not comply with the European Court of Justice’s ruling in the Stauffer case. Some Member States (notably, the Netherlands, Poland and Slovenia) have already changed their tax legislation on cross-border giving to that effect.

While the Stauffer case relates to the tax treatment of income of a cross-border recipient, the Persche case relates to the tax treatment of a cross-border donor. Altogether, they have paved way for sweeping changes in the tax treatment of cross-border giving in the Member States. On behalf of ECNL, Dr. Dragan Golubovic participated at the session.