C-270/81

JUDGMENT OF 15. 7. 1982 — CASE 270/81 FELICITAS v FINANZAMT FÜR VERKEHRSTEUERN

CELEX: 61981CJ0270
Datum: 1982-07-15
Källa: eur-lex.europa.eu

In Case 270/81 REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht [Finance Court] Hamburg for a preliminary ruling in the action pending before that court between

THE COURT (Third chamber) composed of: A. Touffait, President, Lord Mackenzie Stuart and U. Everling, Judges, Advocate General: Sir Gordon Slynn Registrar: H. A. Rühi, Principal Administrator

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the procedure, and the observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows :

I — Facts and written procedure

1. Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capiul (Official Journal, English Special Edition 1969 (II), p. 412) provides for the charging of capital duty on certain transactions of capital companies — including inter alia companies limited by shares (Aktiengesellschaften) and limited liability companies (Gesellschaften mit beschränkter Haftung) — and, in so far as the Member States do not provide otherwise, on transactions of other companies operating for profit and deemed to be capital companies. Those transactions are defined more precisely in Article 4 of the directive. Under Article 5 (1) (b) of the directive, in the case of conversion into a capital company, duty is to be charged “on the actual value of the assets of any kind belonging to the company at the time of the conversion ... after the deduction of liabilities and expenses for which the company is responsible at that time”. The original version of Article 5 (2) — later amended by Council Directive 74/553 of 7 November 1974 (Official Journal 1974, L 303, p. 9), which is not applicable in this case — provided in addition that in that case, the amount on which the duty was charged was not to be less “than the actual value of the shares in the company allotted or belonging to each member or the nominal amount of the shares if the latter exceeds their actual value”. In order to comply with that directive, the Federal Republic of Germany adopted the Kapitalverkehrsteuergesetz [Law on Capital Transactions Tax], (Bundesgesetzblatt I, p. 2129). According to paragraph 5 (2) (3) of that Law, as amended on 17 November 1972, capital companies for the purposes of the Law also include Kommanditgesellschaften [limited partnerships] which have among their general partners a capital company — defined by the Law as including inter alia the Aktiengesellschaft and the Gesellschaft mit beschränkter Haftung — as well as so-called two-tier limited partnerships, that is to say, “limited partnerships which have among their general panners a limited partnership deemed to be a capital company”. In application of that Law, according to the practice of the finance authorities and the Finanzgerichte [Finance Courts], a transaction is considered to attract capital duty, as an acquisition of membership rights, if the so-called two-tier limited partnership fulfils the conditions for treatment as a capital company inasmuch as a capital company becomes a general partner of the limited partnership which is itself a general partner of the limited partnership in question. In such a case under paragraph 8 (1) (1) (b) in conjunction with paragraph 6 of the Kapitalverkehrsteuergesetz, capital duty is payable on the value of the membership rights of the partners. In addition to that provision, paragraph 8 of the Kapitalverkehrsteuergesetz states:

“In so far as membership rights have a nominal value, the value of the membership rights shall be ... at least equal to the nominal value after deduction of the contributions outstanding on them.”

2. The plaintiff in the main action is the Kommanditgesellschaft Felicitas Rickmers-Linie KG & Co., in which Rickmers-Limie Kommanditgesellschaft is a general partner. By an agreement of 10 April 1974, Hapag Lloyd AG became a general panner of the latter. At that time there were 26 limited panners in Felicitas Rickmers-Linie KG & Co. with fully-paid compulsory contributions totalling DM 6480000, which were entered in the commercial register as the “Hafteinlagen” [the contributions for which the limited panners were liable]. In the balance sheet as at 31 December 1973, the pannership capital was shown as DM 7200000, including the limited partners' contribution of DM 6480000, as well as the panners' loss account brought forward on the assets side, which appeared as DM 25358233.83, including the limited panners' share of DM 22822410.51. The value of the limited panners' shares in April 1974 was unquestionably, even in the Finanzamts opinion, nil. By a decision of 10 October 1980, the Finanzamt für Verkehrsteuern [Tax Office for Transfer Duties], Hamburg, assessed duty at DM 64800. It thereby took as the basis of computation of duty the limited partners' shares with contributions of DM 6480000, which it regarded as the nominal value within the meaning of paragraph 8 of the Kapitalverkehrsteuergesetz.

3. The plaintiff in the main action challenged that decision before the Finanzgericht [Finance Court] Hamburg. It based its claim on the ground that the value of the limited partners' shares was nil and the limited panners' shares had no nominal value within the meaning of paragraph 8 of the Kapitalverkehrsteuergesetz. The Finanzgericht Hamburg, took the view that the decision depended not only on the interpretation of German law but also on the interpretation of the term “nominal amount” in Article 5 (2) of Directive 69/335/EEC. That directive in this respect contains directly applicable law, because it leaves no discretion for the Member States to depart from the rule that the amount on which duty is charged must not be less than the nominal value of the company's shares. Moreover, the German Kapitalsteuergesetz is to be interpreted in accordance with the directive, because the German legislature intended to incorporate the directive into German law. In addition, the Finanzgericht Hamburg took the view that limited partners' shares had no nominal value. Under German law, a distinction must be drawn in limited partnerships between the “Kommanditanteil” [the limited partner's share], which is a membership right in the company the “Kapitalanteil” [share in the capital], which is an accounting measure appearing in the balance sheet, the “Pflichteinlage” [compulsory contribution], which denotes the contribution in cash or in kind to be made by the partners, and the “Hafteinlage” or “Haftsumme” [contribution for which a limited partner is liable], which is the amount for which the limited partners are liable to creditors of the partnership. It is not possible to speak of the nominal value of shares in the partnership with regard to any of these aspects of a limited partnership. In particular, in accordance with the purpose of capital duty, the Haftsumme does not enter into account for this purpose, because it is not even always related to a current liability to put capital into the company, as for example is the case in the Aktiengesellschaft on account of the prohibition on the issue of shares below the nominal value. However, having come to the final conclusion that there was doubt about these matters, by an order of 17 September 1981 the Finanzgericht Hamburg, stayed the proceedings and referred the following questions to the Court of Justice under Article 177 of the EEC Treaty for a preliminary ruling:

“1. Is Article 5 (2) of the Council Directive of 17 July 1969 concerning indirect taxes on the raising of capital (69/335/EEC) to be interpreted as meaning that even shares in limited partnerships [Kommanditgesellschaften] have a ‘nominal amount’ within the meaning of that provision, and, if so, which element in a limited partnership represents that nominal amount?

2. Is Article 5 (2) of Directive 69/335/EEC directly applicable, in the sense that a taxpayer may rely on it before a court so as to be taxed in accordance with it?”

4. The order making the reference was received at the Court Registry on 6 October 1981. In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by the following: Felicitas Rickmers-Linie KG & Co., represented by the Tax Consultant, Werner Petersen, Hamburg; the Finanzamt für Verkehrsteuern, Hamburg, represented by Mr Langloh; the United Kingdom, represented by R. N. Ricks of the Treasury Solicitor's Department, and the Commission of the European Communities, represented by its Legal Adviser, Erich Zimmermann, assisted by Wolf-Dietrich Krause-Ablass, Rechtsanwalt, Düsseldorf. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry. By order of 17 February 1982 the Court decided to refer the case to the Third Chamber pursuant to Article 95 (1) of the Rules of Procedure.

II — Written observations submitted to the Court

1. Observations of the plaintiff in the main action

The plaintiff in the main action takes the view that a preliminary ruling which dealt only in the abstract with the nominal value of membership rights would not resolve the problem raised by this case. The decision should therefore deal primarily with the question whether and to what extent that concept is compatible in an individual case with the basic purpose of the law on capital duty, which is to make increases in the capital of capital companies subject to capital duty, and whether therefore capital duty is in any event chargeable in circumstances such as those in the case pending before the Finanzgericht Hamburg.

There are doubts as to the practice of the German finance courts and tax authorities of charging a limited partnership capital duty on the entry of a capital company into another limited partnership which is a general partner of the former limited partnership. The question arises whether tax may be charged on a transaction which represents a fiction for purposes of capital duty, that is to say, where a company which continues to exist as a limited partnership is henceforward to be regarded as a capital company. In view of the objective of capital duty laid down in Article 1 of Directive 69/335/EEC, the charging of capiul duty presupposes corresponding action by the members of the company for reasons connected with company law or considerations of company policy. There can be no question of that in a transaction which takes place outside the company affected thereby. Such a transaction which does not alter the general legal and economic reality of the company concerned, cannot be deemed to constitute the type of conversion, within the meaning of Article 4 (1) (b) of Directive 69/335/EEC, in respect of which duty is payable.

However, if it is considered that such a case is covered by Directive 69/335/EEC, then of course the question relating to the nominal value of limited partners' shares arises once again and with particular acuteness. A limited partnership which has existed for some time before its conversion into a capital company will as a rule by that time no longer have its initial capital. That may meanwhile have risen or diminished or even — as in this case — have become a toul loss. Nevertheless if the capiul duty is calculated mechanically according to a given nominal value of the limited partners' shares, that leads to results which are incompatible with the purposes of the law on company uxation.

2. Observations of the Finanzamt jur Verkehrsteuern

On the first question the Finanzamt für Verkehrsteuern sutes that the term “nominal value” is not limited to the share and interest in the Gesellschaft mit beschränkter Haftung, but is also applicable to limited partners' shares. The assimilation made in the Kapiulverkehrsteuergesetz, in accordance with Directive 69/335/EEC, between a Kommanditgesellschaft in which a Gesellschaft mit beschränkter Haftung is a general partner and true capital companies implies that definitions, in so far as they originate linguistically from the vocabulary relating to true capital companies, must be applied correspondingly to Kommanditgesellschaften in which a Gesellschaft mit beschränkter Haftung is a general panner. Article 3(1) (c) of the directive, pursuant to which any company, firm, association or legal person operating for profit, whose members have the right to dispose of their shares to third parties without prior authorization and are only responsible for the debts of the company, firm, association or legal person to the extent of their shares, is to be regarded as a capital company for the purposes of the directive, has put the national legislature in a position to regard the Kommanditgesellschaft in which a Gesellschaft mit beschränkter Haftung is a general partner as a capital company within the meaning of the Kapitalverkehrsteuergesetz. That provision in the directive necessarily requires that everything which applies to the imposition of taxes on capital companies is also to be applied to companies under Article 3 (1) (c), including the provision on nominal value in Article 5 (2). The national legislature has taken that into account in the last sentence of paragraph 8 of the Kapiţalverkehrsteuergesetz. The first question put to the Court by the Finanzgericht Hamburg is therefore to be answered in the affirmative.

On the second question, the Finanzamt für Verkehrsteuern states that the national legislature had to incorporate the directive into national law and therefore to adapt national law in accordance with the harmonizing directive. That was done by means of the Kapitalverkehrsteuergesetz, which remains directly applicable law for taxpayers and for the authorities. This initial position is to be taken into consideration in answering the second question.

3. Observations of the United Kingdom

On the first question the United Kingdom states that under the laws of Member States there are capital companies the shares in which do not have a nominal value. Article 5 (2) of Directive 69/335/EEC, whereby capital duty is to be charged on the nominal amount if it is higher than the actual value of the shares in the company, is not to be interpreted as meaning that shares in each of the companies to which this provision is applicable, regardless of their legal nature, must always have a nominal value. On the contrary, it is applicable only if the shares in the company have a recognized nominal value under national law. Any other interpretation would necessarily result in an alteration in the substantive law relating to companies in Member States.

Under the systems of law in force in the United Kingdom, for example, it is not possible to attribute a nominal value to the share of a limited partner in a limited partnership. The German court in the main proceedings was inclined to take the same view in relation to the Kommanditgesellschaft under German law. Therefore the United Kingdom can make no observations on the second pan of the first question.

On the second question the United Kingdom states that the question of the direct effect of Article 5(2) does not arise in the present case, since the taxpayer in question does not seek to rely on its provisions before the national court. The court making the reference seems to have taken the point of its own motion. The question of the direct effect of a directive can arise only where a Member State has failed in its duty to implement the directive and a person claims the right to defend himself against the activities of the Member State by relying on the provisions of the directive. It is in fact difficult to envisage a situation where a taxpayer would seek to rely on the direct effect of Article 5 (2) in proceedings before a national court, as the purpose of that provision is to require Member Sutes to set a minimum basis for the charge to capital duty.

A Member State may not invoke the direct effect of Article 5 (2) in proceedings before its national court, if, for example, it considers that its implementing legislation is in some way defective. In fact the German authorities in the present case have not argued that Article 5 (2) is directly applicable, but have simply referred to Article 5 (2) as providing support for their view that under German national law a limited partner's share can be said to have a nominal value. In the view of the United Kingdom, the Federal Republic of Germany has adopted the implementing measures required by Directive 69/335/EEC, by providing that duty shall be charged on the nominal value if the shares in the company have a nominal value.

If Article 5 (2) is read together with the other provisions of the directive, it fails to fulfil the criteria laid down by the Court of Justice for producing direct effect, namely that it should be unconditional and sufficiently precise; Articles 3 (2), 4 (2), 6, 8 and 9 allow Member States considerable discretion.

Accordingly, the second question should be answered in the negative.

4. Observations of the Commission

On the first question the Commission first of all points out that the adoption of the nominal value as the minimum basis of taxation under Article 5 (2) of Directive 69/335/EEC represents an absolute limit, below which it is not permissible to fall. That is also confirmed by the amendment of that provision as a result of Council Directive 74/553/EEC of 7 November 1974 (Official Journal 1974, L 303, p. 9). The term ‘nominal amount’ must have a uniform interpretation for all Member States, because the purpose of the directive is the harmonization of both the structure and the rates of capital duty.

In everyday language, the term “nominal amount” refers above all to the pecuniary value printed on shares, securities or currency, which may be different from the market or exchange value of such documents. However, its use is not limited to rights represented by documents. Thus one also speaks of the nominal amount in relation to shares in a German Gesellschaft mit beschränkter Haftung. However there are also companies, such as the bürgerlichrechtliche Gesellschaft [unincorporated association], in relation to which it is generally agreed that one cannot speak of a nominal amount. Article 3 (2) of Directive 69/335/EEC provides that such companies shall also be deemed to be capital companies, provided that they operate for profit and that the Member States do not provide otherwise. A straightforward application of the term “nominal amount” to such companies is not possible.

In order to ascertain whether a share in a company has a nominal amount within the meaning of Article 5 (2) of Directive 69/335/EEC, it is necessary to refer to the spirit and purpose of the directive. Its object is to impose a tax on the raising of capital. Article 5 provides the criteria to be applied in valuing the capital raised, which serves as the basis of taxation. The nominal amount is thereby regarded as the lower limit for the capiul raised by the company. However, that consideration is valid only for shares in the company which are marked with an amount which represents the capiul raised. This is the case with shares in a German Gesellschaft mit beschränkter Haftung, for example, although the law does not use the term “nominal amount” in relation to such companies, for in such a company the shareholders could not be released from the duty to contribute to capital and the issue of shares at a discount is not allowed.

For limited partners' shares the position is as follows: The limited partner's contribution is set at an amount to be entered into the trade register, which limits the limited partner's contribution in relation to creditors of the partnership. An agreement whereby a limited partner's contribution is foregone or delayed is of no effect as against the creditors of the partnership. It is, however, admissible in the articles of association to fix the contribution actually to be paid by the limited partner to the partnership at a level lower than the amount to be entered in the commercial register for which the limited partner is liable. One speaks of the “Pflichteinlage” [compulsory contribution], as opposed to the “Hafteinlage” [contribution for which a limited partner is liable]. As between the partners it is also possible to forego payment of the contribution or to repay it. The amount to be entered into the commercial register therefore does not correspond to the capital which must be paid in. Therefore that amount cannot be considered the nominal amount within the meaning of Article 5 (2) of Directive 69/335/EEC. The other terms used in practice to denote the limited partners' shares, which were mentioned in the order making the reference, that is to say, the share in the capital (an accounting measure appearing in the balance sheet which may be subject to temporary fluctuations) and the membership right under company law, also have no nominal amount.

The answer to the first question posed by the Finanzgericht Hamburg, should therefore be that shares in limited partnerships have no nominal amount within the meaning of Article 5 (2) of Directive 69/333/EEC.

As to the second question, the Commission first of all points out that, according to the well-esublished case-law of the Court of Justice, directives may) also have direct effect on individuals in the Member Sutes. That is the case if they conuin a clear obligation which is not subject to any reservation or condition and leaves no discretion for the Member States.

In so far as Article 5 (2) of Directive 69/335/EEC provides that the amount on which the duty is to be charged is not to be less than the nominal amount of the shares in the company belonging to each member, those conditions are satisfied inasmuch as that provision lays down a clear and unconditional obligation to observe a minimum limit for taxation. In order to ensure the uniform taxation in all Member States sought by the directive, taxation according to the nominal amount in pursuance of Article 5 (2) should uke place only in so far as the conditions described above for the assumption of a nominal amount exist. If there is no nominal amount, duty may be charged only in accordance with the other bases for taxation laid down in Article 5. In this regard also the framework for uxation is laid down by the directive clearly and without any reservation.

The answer to the second question should therefore be that the provision for charging duty on the basis of the nominal amount under Article 5 (2) of Directive 69/335/EEC constitutes directly applicable law in the Member States, and a taxpayer may rely on it before the courts of the Member Sutes, that the conditions for charging duty on the basis of the nominal amount under Article 5 (2) of the directive do not exist and the duty is instead to be charged on that amount which is subject to duty under Article 5 of the directive in the absence of a nominal amount.

III — Oral procedure

At the sitting on 6 May 1982, oral argument was presented by the following: Herbert Beiser, Tax Consultant, Hamburg, for the plaintiff in the main action; Mr Langloh, for the Finanzamt für Verkehrsteuern, Hamburg; J. Rayner-James, Barrister, for the United Kingdom; and W. D. Krausse-Ablass, Rechtsanwalt, Düsseldorf, for the Commission.

The Advocate General delivered his opinion at the sitting on 17 June 1982.

Decision

1. By order of 17 September 1981, which was received at the Court on 6 October 1981, the Finanzgericht [Finance Court] Hamburg referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Article 5 (2) of Council Direttive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital (Official Journal, English Special Edition 1969 (II), p. 412) in order to enable it to determine whether, for purposes of the assessment of capital duty, the limited partners' shares in a limited partnership under German law [Kommanditgesellschaft] have a nominal amount within the meaning of the directive.

2. Those questions arose in the course of a dispute between the Kommanditgesellschaft Felicitas Rickmers-Linie KG & Co. and the German tax authority over the assessment of capital duty under the Kapitalverkehrsteuergesetz [Law on Capital Transactions Tax] of 17 November 1972, which was adopted by the Federal Republic of Germany in order to implement the above-mentioned directive. The dispute related to the determination of the basis of assessment on which capital duty must be charged in this case.

3. Article 1 of Directive 69/335 provides that capital duty is to be charged on contributions of capital to capiul companies, which are defined in Article 3 (1) of the directive. According to Article 3 (2), any other company, firm, association or legal person operating for profit is to be deemed to be a capital company. However, a Member State is to have the right not to consider it as such for the purpose of charging capital duty. As is clear from the order making the reference, in relation to a Kommanditgesellschaft the Kapitalverkehrsteuergesetz makes use of the option granted by Article 3 (2) of the directive to exclude certain categories of company, firm, association or legal person from capital duty. However, in paragraph 5 (2) (3), it provides that Kommanditgesellschaften which have among their general partners either a capital company stricto sensu or another Kommanditgesellschaft which has among its general panners a capital company are to be subject to capital duty.

4. In relation to the basis of assessment of capital duty, Article 5 (2) of Directive 69/335, in the version in force at the material time, provides, so far as is relevant to this case, that “the amount on which the duty is charged shall not... be less than the actual value of the shares in the company allotted or belonging to each member or the nominal amount of such shares if the latter exceeds their actual value”. In application of that provision, paragraph 8 of the Kapitalverkehrsteuergesetz provides that “In so far as membership rights have a nominal value, the value of the membership rights shall be ... at least equal to the nominal value after deduction of the contributions outstanding on them”.

5. It is clear from the order making the reference that Felicitas Rickmers-Linie KG & Co. was assessed to capital duty because, by virtue of the entry ot an Aktiengesellschaft [company limited by shares] as a general partner the Kommanditgesellschaft which was a general partner in Felicitas Rickmers-Linie KG and Co., the latter fell within the category of companies referred to in paragraph 5 (2) (3) of the Kapitalverkehrsteuergesetz. In accordance with the relevant German case-law, that transaction was regarded as an acquisition of shares in a capital company by the limited partners of Felicitas Rickmers-Linie KG & Co., thus as a transaction subject to capital duty under the provisions of the Kapitalverkehrsteuergesetz.

6. It is not disputed that at the time of the transaction in question the actual value of the shares in Felicitas Rickmers-Linie KG & Co., was nil. However, the tax office took the view that the sum of DM 6480000, which was entered in the commercial register in respect of the limited panners' shares, constituted the nominal amount of such shares. Consequently, it assessed capital duty on that basis. Felicitas Rickmers-Linie KG & Co. brought an action before the Finanzgericht Hamburg challenging that decision. It claimed that shares in a Kommanditgesellschaft have no nominal value and that only the actual value, in this case nil, could be taken into account.

7. Considering that the outcome of the base depended on the interpretation of Article 5 (2) of Directive 69/335, the Finanzgericht Hamburg referred to the Court for a preliminary ruling the following questions:

2. Is Article 5 (2) of Directive 69/335/EEC directly applicable, in the sense that a taxpayer may rely on it before a court so as to be taxed in accordance with it?”

8. In the observations which it submitted to the Court, the plaintiff in the main action took the view that it was necessary first to reply to the question underlying the question put to the Court by the Finanzgericht Hamburg, namely, whether a transaction such as that concerned in this case may be considered as a transaction subject to capital duty within the meaning of the directive, even though it is a mere fiction so far as capital duty is concerned and does not affect the existence of the organization in question or alter its general legal and economic structure.

9. However, that question, which involves the interpretation of Articles 3 (2) and 4 of the directive, was not raised by the Finanzgericht Hamburg, which expressed no doubt in its order making the reference that a transaction such as that concerned in this case was subject to capital duty. It is therefore unnecessary to give a ruling on that question in the framework of these proceedings for a preliminary ruling.

The first question

10. The first question submitted by the Finanzgericht Hamburg concerns the interpretation of the concept of “nominal amount” within the meaning of Article 5 (2) of Directive 69/335.

11. Both the plaintiff in the main action and the Commission infer from the legal structure of a Kommanditgesellschaft, as it emerges from the provisions of the relevant German legislation, that the shares in an organism of that kind have no nominal amount in the sense described above. In support of this view they contend that that type of organism is characterized by the fact that the limited partners' contributions do not necessarily have to be expressed in cash, that their share in the capital may be subject to constant fluctuations, and that the amount entered in the commercial register in respect of each limited partner is of no importance except with regard to the creditors of the Kommanditgesellschaft.

12. In its written observations, the German tax authority contended that Article 5 (2) of Directive 69/335 must be capable of application in its entirety to any organism which is deemed to be a capital company, including the Kommanditgesellschaft referred to in paragraph 5 (2) (3) of the Kapitalverkehrsteuergesetz. During the oral procedure it added that in any event the shares in such a Kommanditgesellschaft could have a nominal amount, if its legal structure resembled that of capital companies, in particular in relation to the limited panners' participation in the profits and losses and also their compulsory contribution and their liability as against third parties.

13. On the other hand, the United Kingdom took the view in its written observations that the concept of “nominal amount” within the meaning of Article 5 (2) of Directive 69/335 could be applicable only if the shares in the company had a recognized nominal amount under national law. During the oral procedure it stated that that was the case where, according to the determination made by the national court, the shares related to an amount representing the capital raised.

14. It should first be stated that the concept in question is contained in a provision of Community law which does not refer to the law of the Member States in order to determine its meaning and scope. The harmonization of taxes such as capital duty on the raising of capital, not only in relation to the rates but also to the structure thereof, implies that the basis of assessment is determined in each Member State on the basis of objective criteria, having a uniform scope within the Community and free from the influence of national laws. It follows that the interpretation of the concept at issue, considered in its entirety, may not be left to the discretion of each Member State. It is therefore necessary to provide the national court with criteria which will enable it to determine whether the organization in question fulfils the criteria laid down by the Community rules.

15. According to its ordinary meaning “nominal amount” refers to an amount, in principle unchangeable and expressed in cash, which may be different from the true economic value. In the context of genuine capital companies, the expression is used to denote the quantified value of the member's compulsory contribution to the capital company, which cannot be waived either by the company or by the other members, and which characterizes in durable fashion the relationship between the member and the company.

16. In relation to the use of that expression in Article 5 (2) of Directive 69/335, it should further be pointed out that according to the principles on which harmonized capital duty is based, such duty should be charged only on transactions which constitute in law the raising of capital and only in so far as they contribute to increasing the company's economic potential. In view of that object, only an amount corresponding to the value which must be contributed to the capital company by a member and by means of which the member contributes to the raising of capital, may be taken into consideration as the “nominal amount” of shares within the meaning of the provision m question.

17. It follows that the shares of members in a company have a nominal amount within the meaning of Article 5 (2) when the company's legal structure includes fixed amounts expressed in cash, which are intended to quantify the value of the members' contribution to the raising of capital in that company and to characterize in a durable fashion the relationship between the members and the company.

18. Having regard to the diversity of the legal structures of the companies, firms, associations or legal persons which may be deemed to be capital companies by virtue of Article 3 (2) of the directive, the concept “nominal amount” may not be applied automatically to each type of company, firm, association or legal person referred to in that provision in such a way that each must necessarily be regarded as having a nominal amount. It is necessary to consider whether the legal structure of each type of company, firm, association or legal person, as disclosed by the relevant national rules and the provisions of the documents of constitution, makes it possible to conclude that there is a nominal amount.

19. Having regard to the above-mentioned criteria, it should be noted that in a Kommanditgesellschaft such as that described by the Finanzgericht Hamburg, namely one in which the limited partners' contribution is not necessarily expressed in cash, in which the share in the capital may be subject to constant fluctuations and in relation to which the amount entered in the commercial register in respect of each limited panner is intended only to limit the latter's possible liability in relation to creditors of the Kommanditgesellschaft, the shares do not have a nominal amount within the meaning of the provision in question.

20. However, the German tax authority has denied that the bodies mentioned in paragraph 5 (2) (3) of the Kapitalverkehrsteuergesetz, and in particular the plaintiff in the main action whose documents of constitution contain special provisions, in fact display such characteristics.

21. Nevertheless, the question whether bodies such as those covered by paragraph 5 (2) (3) of the Kapitalverkehrsteuergesetz constitute a type of organization which is different from that of the Kommanditgesellschaft in general is a matter purely of national law, as is the question, where relevant, of the legal structure of such an organization. It is therefore for the national court to determine the type of organization concerned in this case and to assess its characteristics, taking into account the criteria contained in the Community rules.

22. The answer to the first question should therefore be that the shares in a company have a nominal amount within the meaning of Article 5 (2) of Directive 69/335 when the legal structure of the type of company to which the company concerned belongs includes amounts fixed in cash, intended to quantify the value of the members' contribution to the raising of capital in that company and to characterize in durable fashion the relations between the members and the company. It is for the national court, taking into account the criteria for interpretation laid down by the Court of Justice, to carry out the necessary appraisal both of the relevant national rules and of the provisions of the company's documents of constitution in order to establish whether that is the case.

The second question

23. The second question put by the Finanzgericht Hamburg is whether Article 5 (2) of Directive 69/335 may be relied upon by a taxpayer before a national court in order to obtain an assessment of capital duty in accordance with that directive.

24. In that regard, it should be stated that whenever a directive is correctly implemented, its effects reach individuals through the intermediary of the implementing measures adopted by the Member State concerned.

25. As is clear from the order making the reference, a legislative provision designed to implement Article 5 (2) of Directive 69/335 was adopted in the Federal Republic of Germany. Moreover, the Finanzgericht Hamburg stated in its order making the reference that national provisions had to be interpreted in accordance with the directive, since the German legislature intended to transpose the directive into German law.

26. It follows that in this case the effects of the directive can reach individuals through the intermediary of the implementing measures adopted by the Member State concerned. Therefore it is unnecessary to examine the question whether Article 5 (2) meets the conditions which must be fulfilled for individuals to be able to rely upon it before a national court in the event of the directive's not being correctly implemented.

27. Under those circumstances, it is not necessary to reply to the second question put by the Finanzgericht Hamburg.

Costs

28. The costs incurred by the United Kingdom and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action before the national court, the decision on costs is a matter for that court.

On those grounds, THE COURT (Third Chamber), in answer to the questions referred to it by the Finanzgericht Hamburg by order of 17 September 1981, hereby rules that:

1 The shares in a company have a nominal amount within the meaning of Article 5 (2) of Directive 69/335/EEC when the legal structure of the type of company to which the company concerned belongs includes amounts fixed in cash, intended to quantify the value of the members' contribution to the raising of capital in that company and to characterize in durable fashion the relations between the members and the company.

2 It is for the national court, taking into account the criteria for interpretation laid down by the Court of Justice, to carry out the necessary appraisal both of the relevant national rules and the provisions of the company's documents of constitution in order to establish whether that is the case.