Which fundamental freedom prevails?

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1 Which fundamental freedom prevails? 1 Introduction In connection with the first series of third-country cases, the relationship of the fundamental freedoms has been extensively discussed. The obvious reason was mainly the fact that only the free movement of capital applies to third-country situations. This essay aims at analysing how the ECJ deals with the question of the prevailing freedom. In this respect it shall be examined whether the Court curbs any third-country rights granted by the free movement of capital or just applies the same concept as in its intra-community case-law. 2 Internal Market and the fundamental freedoms 2.1 Internal Market The goal of the European Community is to achieve an Internal Market, which is characterized as "an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured". 1 Unlike for indirect taxes, the EC Treaty does not contain provisions harmonizing direct tax laws of the Member States. With the establishment of the Internal Market, which bases on the fundamental freedoms, the Member States gave up certain rights. The new legal framework also described by the Triangular Model has limiting effects on the national tax laws of the Member States as they must exercise their powers retained consistently with Community law. 2 The basis of the Internal Market are the four fundamental freedoms: the free movement of goods (Article EC), the free movement rights of persons (free movement of workers (Articles EC) and the freedom to provide services (Articles EC)), the free movement of services (freedom to provide services (Article EC) and the free movement of capital (free movement of capital and payments (Article EC)). Since its entry into force, the Treaty of Amsterdam additionally comprises the freedom of citizenship, which is sometimes referred as fifth freedom (Article 18 EC). 1 2 Article 14(2) EC. The Triangular Model was developed and introduced by O'SHEA (O'Shea, 'EU Tax Law and Double Tax Conventions', Avoir Fiscal 2008); Case C-279/93 Finanzamt Köln-Altstadt v Roland Schumacker ('Schumacker'), [1995] ECR I-225, para. 21.

2 2 2.2 Free movement of goods For direct tax purposes, the free movement of goods does not play a significant role. Although this fundamental freedom is supposed to be the most important fundamental freedom, it is rather negligible in the direct tax area. 3 Besides the non-discrimination principle, the free movement of goods prohibits customs duties on imports and exports between Member States as well as all charges having equivalent effect. 4 Important elements of this freedom are Articles 90 and 91 EC, which ensure with respect to the VAT that, neither directly nor indirectly, a less favourable taxation is applied on im- or exported products. Furthermore, Article 93 EC mandates the Council with the harmonization of the indirect taxes. 2.3 Free movement of workers The free movement of workers ensures the "abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment". 5 The freedom entails the right of free choice of vocation, free professionalism and residence in the Member States subject to the special provisions laid down in the secondary legislation. With respect to direct taxation, the free movement of workers provides for the abolition of all discrimination based on nationality between workers of the Member States, particularly concerning remuneration. In this respect the Court held that the principle of equal treatment "would be rendered ineffective if it could be undermined by discriminatory national provisions on income taxes". 6 Under comparable situations, residents and non-residents must - unless giving raise to discrimination provide for a non-less favourable treatment (national treatment). Such national treatment not only forbids "overt discrimination by reason of nationality but also all covert forms of discrimination which, by the application of other criteria such differentiation, lead in fact to the same result". 7 Moreover, domestic tax laws of the Member States typically distinct on the basis of residence as opposed to non-residents. 8 This fact leads to the following conclusions: Firstly, "the situation of residents and non-residents are, as a rule not comparable" 9 unless "the non-resident receives no significant income in the State of his residence and obtains the major part of his taxable income from an activity performed in the State of employment, with the result TERRA/WATTEL, European Tax Law, 5 th Ed., 2008, p. 52. Articles 23 EC. Article 39(2) EC. Case C-175/88 Klaus Biehl v Administration des Contributions du Grand-Duché de Luxembourg ('Biehl'), [1990] ECR I-01779, para. 12; Schumacker, supra. fn. 2, para. 22. Case C-152/73 Giovanni Maria Sotgiu v Deutsche Bundespost ('Sotgu'), [1974] ECR I-00153, para. 11; Schumacker, supra. fn. 2, para. 26. TERRA/WATTEL, supra. fn. 3, p. 716; Schumacker, supra. fn. 2, para. 28. Schumacker, supra. fn. 2, para. 31.

3 3 that the State of his residence is not in a position to grant him the benefits resulting from the tacking into account of his personal and family circumstances" 10. The same applies with respect to the taxpayer's ability to pay. 11 Secondly and contrary to the general non-comparability of residents and non-residents, it must be noted that the tax base of non-residents must correspond to the one of residents Freedom of establishment The freedom of establishment ensures the right to do business by "setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State". 13 It therefore "includes the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, under the conditions laid down for its own nationals by the law of the Member State where such establishment is effected, entails ( ) for companies ( ) the right to exercise their activity in the Member State through a subsidiary, a branch or an agency." 14 The freedom of establishment is generally characterized by the "actual pursuit of an economic activity through a fixed establishment in another Member State for an indefinite period" 15 respectively as the pursuit of an economic activity "on a stable and continuous basis, in the economic life of a Member State other than his State of origin and to profit therefrom" 16. Settled case-law determines "indefinite period" by factors like duration, regularity, periodicity or continuity 17 and the fact that pursuit of the economic activity has to be "on a stable and continuous basis". 18 For companies or a group of companies, a less favourable treatment of secondary establishment set-ups may refrain non-resident companies from "acquiring, creating 10 Schumacker, supra. fn. 2, para C-107/94 P.H. Asscher v Staatssecretaris van Financiën ('Asscher'), [1996] ECR I-03089, para C-385/00, F.W.L. de Groot v Staatssecretaris van Financiën ('De Groot'), [2002] ECR I-11819, para Article 43(2) EC. 14 C-196/04 Cadbury Schweppes plc, Cadbury Schweppes Oversseas Ltd v Commissioners of Inland Revenue ('Cadbury-Schweppes'), para. 41; C-307/97 Companie de Saint-Gobain, Zweigniederlassung Deutschland v Finanzamt Aachen Innenstadt ('Saint-Gobain'), [1999] ECR I-6161, para. 35; C-446/03 Marks & Spencer plc v David Halsey (Her Majesty's Inspector of Taxes) ('Marks&Spencer'), [2005] ECR I-10837, para. 30; C-471/04 Finanzamt Offenbach am Main-Land v Keller-Holding GmbH ('Keller-Holding'), [2006] ECR I-2107, para C-221/89, The Queen v Secretary of State for Transport, ex parte Factortame Ltd and others ('Factorame'), [1991] ECR I-03905, para C-55/94 Reinhard Gebhard v Consiglio dell'ordine degli Avvocati e Procuratori di Milano ('Gebhard'), [1995] ECR I-04165, para Gebhard, supra. fn. 16, para Gebhard, supra. fn. 16, para. 25; C-70/95, Sodemare and Regione Lombardia ('Sodemare'), [1997] ECR I-3395, 24. Interestingly to note that the same term "on a stable and continous basis" is differently translated in the two cases. While it is translated as "stetig und dauerhaft" in Sodemare, the German version of the Gebhard ruling speaks about "stabil und kontinuierlich".

4 4 or maintaining a subsidiary in the State which adopts" 19 such measures by its national tax laws. Many decisions deal with group of companies and mainly regard issues in connection with CFC-legislation, thin-capitalization rules as well as tax avoidance. The significance of such provisions mainly affecting group of companies on the applicable fundamental freedom will be dealt with later. 2.5 Freedom to provide services The freedom to provide services in a Member State by nationals of another Member State, without establishing domicile there, is guaranteed by Article 48(1) EC. The freedom to provide services precludes, according to settled case-law, "the application of any national rules which have the effect of making the provision of services between Member States more difficult than the provision of services purely within one member State". 20 It is established that the freedom to provide services also "includes the freedom of the persons for whom the services are intended to go to another member State, where the provider is, in order to enjoy the services there". 21 Additionally, the freedom applies to situations in which the service provider offers its services in a Member State other than the one in which he is established, irrespective of the place where the recipient is established. 22 Finally, the freedom to provide services applies to situations where only the service itself crosses the border. TERRA/WATTEL point out that, according to Article 50 EC, the freedom to provide services is supplementing the free movement of goods, persons and capital and is thus for situations where none of the latter freedoms apply. 23 The interpretation and application of the freedom to provide services "corresponds to the objective of covering any activity performed for remuneration which does not fall within the scope of free movement of goods and capital or freedom of movement for persons". 24 AG Stix-Hackl argued in her opinion in Stauffer concerning an Italy based foundation that held some real estate in Germany, that the freedom to provide services is subsidiary to the also invoked freedom of establishment and free movement of capital and 19 C-324/00, Lankhorst-Hohorst v Finanzamt Steinfurt ('Lankhorst-Hohorst'), [2002] ECR I-11779, para C-281/06, Hans-Dieter and Hedwig Jundt v Finanzamt Offenburg ('Jundt'), [2007] ECR I-0000, para. 52; C-136/00, Rolf Dieter Danner ('Danner'), [2002] ECR I-8147, para. 29; C-118/96, Jessica Safir v Skattemyndigheten / Dalarnas Län, formerly Skattemyndigheten / Kopparbergs Län ('Safir'), [1998] ECR I-1897, para. 23; C-290/04, FKP Scorpio Konzertproduktionen GmbH v Finanzamt Bergisch ('Scorpio'), [2006] ECR I-09461, para C-76/05, Herbert Schwarz und Marga Gootjes-Schwarz v Finanzamt Bergisch ('Schwarz'), [2007] ECR I-06849, para. 36; Scorpio, supra. fn. 20, para. 32; C-294/97, Eurowings Luftverkehrs AG v Finanzamt Dortmund-Unna ('Eurowings'), [1999] ECR I-07447, para. 34; C- 55/98, Skatteministeriert v Bent Vestergard ('Vestergaard'), [1998] ECR I-07641, para Vestergaard, supra. fn. 21, para TERRA/WATTEL, supra. fn. 3, p Gebhard, supra. 16, para. 22; also see C-155/73, Giuseppe Sacchi ('Sacchi'), [1974] ECR I , para. 26 and C-452/04, Fidium Finanz AG v Bundesanstalt für Finanzdienstleistungs aufsicht ('Fidium Finanz'), [2006] ECR I-9521, para. 32.

5 5 therefore it is to be examined only if neither of the other freedoms is applicable in the present case. 25 The ECJ noted in that respect that the free movement of capital applies in the present case and that "it is therefore not necessary to consider whether the foundation acts as a service provider". 26 Despite the supplementing character, the freedom to provide services is needed as a separate freedom because the crossborder provision of services may be effected without any goods being moved, without relocation of capital and without (secondary) establishment across the border. 27 Fidium Finanz clarifies however that, although Article 50(1) EC defines 'services' as services not being governed by the provisions relating to freedom of movement of goods, capital and persons, it does not establish any order of priority between the freedom to provide services and the other fundamental freedoms. 28 The provision of services applies in the case of a "temporary pursue of the activity". 29 The temporary nature of the provision of services does, however, not exclude the service provider to "equip himself with some form of infrastructure in the host Member State (including an office, chambers or consulting rooms) in so far as such infrastructure is necessary for the purposes of performing the services in question". 30 Furthermore, the mere fact of having some kind of infrastructure in the Host State does not per se preclude the application of the freedom to provide services. 31 The freedom to provide services is distinguished from the free movement of goods by the fact that services are intangible. 32 The provision of services can however require importing respective auxiliary materials. 2.6 Free movement of capital Article 56(1) EC provides that all restrictions on the free movement of capital between member States and between Member States and third countries are prohibited. In contrast to the other fundamental freedom, the free movement of capital gives effect not only to the free movement of capital between Member States but also between Member States and third countries. 33 The Treaty itself does not contain a definition on capital movement. According to settled case-law, the ECJ has "recognized the nomenclature which constitutes Annex I 25 Opinion of AG Stix-Hackl in C-386/04, Centro de Musicologia Walter Stauffer v Finanzamt München für Körperschaften ('Stauffer'), [2006] ECR I-8203, para Stauffer, supra. fn. 25, para TERRA/WATTEL, supra. fn. 3, p Fidium Finanz, supra. fn. 24, para Art. 50(3) EC; Gebhard, supra. fn. 16, para. 26 and 39; C-234/01, Arnoud Gerritse v Finanzamt Neuköln-Nord ('Gerritse'), [2003] ECR I-5933, para. 23 and Gebhard, supra. fn. 16, para See above section TERRA/WATTEL, supra. fn. 3, p C-98/01, Commission v United Kingdom ('Golden Share UK'), [2003] ECR I-4641, para. 38.

6 6 to Directive 88/361 as having indicative value, even if the latter was adopted on the basis of Articles 69 and 70(1) of the EEC Treaty ( ), it being understood that, according to the third paragraph of the introduction to that annex, the nomenclature it contains is not exhaustive as regards the term 'movement of capital'". 34 The nomenclature contains a list of all kinds of transactions that are to be considered as capital movements whereby its non-exhaustive character shown by the title of the last section 'Other capital movements Miscellaneous'. Generally, a capital movement "may be understood as unilateral and one-sided, that is to say a transfer of capital that is not conditional upon a transaction falling under the free movement of goods or services, a cross-border flow of value in form of monetary capital or other material or immaterial assets from one Member State to another". 35 One-sidedness means transactions on pure financial investment grounds and has to be denied in cases "where the transfer in question corresponds to an obligation to pay arising from a transaction involving" another fundamental freedom. 36 With respect to the case-law discussed below and also in order to demonstrate the relation of the free movement of capital to the other fundamental freedoms, acquisitions of shares in companies are especially relevant. Any other forms of capital movements are therefore not discussed in detail. Points I and III in the nomenclature and the explanatory notes "indicate that direct investment in the form of participation in an undertaking by means of a shareholding or the acquisition of securities on the capital market constitute capital movement for the purposes of Article 56(1) EC". 37 The heading 'Acquisition ( ) of domestic securities ( )' includes, inter alia, the transaction 'acquisition by non-residents' of shares and bonds in domestic companies on pure financial grounds, i.e. without the aim of exercising any definite influence on the company's decisions. 38 This type of participation is usually known as 'portfolio investment'. In contrast, the heading 'Direct investments' comprises "investments of all kinds ( ) which serve to establish or to maintain lasting and direct links between the person providing the capital and the ( ) undertaking to which the capital is made available in order to carry on an economic activity". As defined by the explanatory notes, "there is participation in the nature of direct investment where the block of shares held by a person ( ) enables the shareholder ( ) to participate effectively in 34 C-67/08, Margarethe Block v Finanzamt Kaufbeuren ('Block'), ECR pending, para. 19 with further case-law reference; C-222/97, Manfred Trummer and Peter Mayer ('Trummer and Meyer'), [1999] ECR I-1661, para. 20 and 21; Golden Share UK, supra. fn. 33, para C-26/83, Luisi and Carbone v Ministero del Tesoro ('Luisi & Carbone'), [1984] ECR 377, para. 21; SEDLACZEK, 'Capital and Payments: The Prohibition of Discrimination and Restrictions", ET 2000, p Luisi & Carbone, supra. fn. 35, para Golden Share UK, supra. fn. 33, para Communication of the Commission on certain legal aspects concerning intra-eu investment, OJ C 220, 19. July 1997, p , para. 3.

7 7 the management of the company or in its control". The Commission mentions that "the acquisition of controlling stakes, as well as the full exercise of the accompanying voting rights, in domestic companies by other EU investors is also considered to be a form of capital movement". 39 Furthermore, the Commission outlines that an acquisition of a controlling stake is also covered by the provisions of the freedom of establishment at the same time. The rights granted under the freedom of establishment enable nationals of other EU Member States to freely acquire controlling stakes, exercise voting rights and manage domestic companies under the same conditions applicable in a given Member State to its own nationals" Right of residence of EU citizens With the Maastricht Treaty, the Community citizenship right was adopted. 41 The right of residence grants EU citizens "the right to move and reside freely within the territory of the Member States ( )". 42 The Community citizenship right ensures that nationals are not less favourably treated even though they have not availed themselves of the opportunities offered by the EC Treaty in relation to freedom of movement. 43 The application of this freedom appears in cases of pensioners like Ms. Turpeinen who decided to relocate after her retirement first to Belgium and subsequently to Spain. Based on this freedom she was granted equal treatment 44 with respect to the imposed flat Finish withholding tax of 35% on her pension payments and could claim the normal progressive tax rates with basic allowance, which resulted in her personal situation to a final tax burden of approximately 28.5%. 45 Werner, a case decided before the adoption of the Community citizenship right, demonstrates the need of the Community citizenship right for achieving an undistorted internal market. This case concerned a German national who lived in the Netherlands and first practised as an employed dentist in Germany, and thereafter opened his own practice there. Since he had always worked in Germany and thus had not exercised his free movement rights, he was prevented from benefitting equal treatment and was thus due to the lack of the Community citizenship right at that moment subject to the less favourable limited taxation regime COMMISSION, supra. fn. 38, para COMMISSION, supra. fn. 38, para O'SHEA, 'EU Tax Law and Double Tax Conventions', Avoir Fiscal 2008, p Article 18 EC; Schwarz, supra. 21, para. 86 with further references to case-law. 43 C-224/02, Heikki Antero Pusa and Osuuspankkien Keskinäinen Vakuutusyhtiö ('Pusa'), [2004] ECR I-5763, para. 18; Schwarz, supra. fn. 21, para O'SHEA, supra. 41, p C-520/04, Pirkko Marjatta Turpeinen ('Turpeinen'), [2006] ECR I-10685, para. 6; TERRA/WATTEL, supra. 3, sec , p C-112/91, Hans Werner v Finanzamt Aachen Innenstadt ('Werner'), [1993] I-00429, para. 4-6 and 16.

8 8 According to settled case-law, the Community citizenship right is secondary to the fundamental freedoms. This subordination can be seen in N with respect to the freedom of establishment, in Turpeinen with respect to the free movement of workers and in Schwarz with respect to the freedom to provide services. 47 The Court generally holds that if the case in the main proceeding falls under (another) fundamental freedom, "it will not be necessary to ( ) to rule on the interpretation of Article 18 EC" and "it is therefore to rule on Article 18(1) EC only in so far as the case in the main proceedings does not fall within the scope (of another fundamental freedom)" Concept of the prevailing freedom 3.1 General According to the EC Treaty, none of the fundamental freedoms generally prevails. The Community citizenship however, is as mentioned above of secondary nature and only applies if the national provisions at issue do not fall under any particular provisions of the other fundamental freedoms. Furthermore, it has to be recalled that the freedom to provide services is supplementing the free movement of goods, persons and capital. 3.2 Cadbury-Schweppes In the context of direct taxation, the ECJ for the first time examined in Cadbury- Schweppes the question of the prevailing fundamental freedom. The taxpayer invoked freedom of establishment, freedom to provide services as well as free movement of capital. The Court first held in accordance with settled case-law "that national provisions which apply to holdings by nationals of the Member State concerned in the capital of a company established in another Member State, giving them definite influence on the company's decision and allowing them to determine its activities come within the substantive scope of the provisions of the Treaty on freedom of establishment." 49 In contrast to Baars 50 where this definition has been applied for the first time, the Court explicitly ruled in Cadbury-Schweppes, that if the scrutinized legislation has "restrictive effects on the free movement of services and the free movement of capital, such effects are an unavoidable consequence of any restriction 47 C-470/04, N. v Inspecteur van de Belasingsdienst Oost/kantoor Almelo ('N'), [2006] ECR I- 7409, para ; Turpeinen, supra. fn. 45, para. 13; Schwarz, supra. fn. 21, para. fn See also C-318/05, Commission v Germany ('Commission v Germany (School fee)'), [2007] ECR I-06957, para. 32 and Schwarz, supra. fn. 21, para Cadbury-Schweppes, supra fn. 14, para C-251/98, C. Baars v Inspecteuer der Belastingen Particulieren/ondernemingen Gornichen ('Baars'), [2000] ECR I-2787.

9 9 on freedom of establishment and do not justify, in any event, an independent examination of that legislation in the light of Articles 49 EC and 56 EC." 51 The fact that the Court determined the prevailing freedom became more important in connection with its early third-country decisions. Since only the free movement of capital provides for an erga-omnes effect and thus also applies in a third-country context while the other freedoms only apply in a MS-MS context, the determination of the prevailing freedom is decisive. After the Court's decisions in Fidium-Finanz 52, Lasertec 53 and Holböck 54 where in each case the freedom to provide services or the freedom of establishment was found to be prevailing over the free movement of capital, the discussion whether the Court is curbing third-country rights emerged. 55 WEBER disagreed with the Court's approach and argued with respect to the Fidium- Finanz decision that, since the freedom to provide services is not applicable in a MS- TC context, the Court should have examined whether the restriction of the free movement of capital is justified by imperative reasons in the public interest. 56 In addition, recent court decisions like Burda 57 show that the Court, however follows the concept of the prevailing freedom and therefore examined the facts under the free movement of establishment which displaced the free movement of capital. The discussion raises several questions, which will be addressed in this article, (i) why is it necessary to determine the prevailing freedom even in a intra-community context, (ii) when is the application of one fundamental freedom only the "unavoidable consequence" of another freedom and (iii) whether this concept curbs any rights of the taxpayers. 3.3 Relationship between the free movement of workers, freedom of establishment and the freedom to provide services From the case-law in Gebhard it emerges that the free movement of workers, the freedom of establishment and the freedom to provide services are "mutually exclusive". 58 In these situations, the Court has to define the scope of the invoked freedoms. Gerritse may serve as an example where the Court concludes that not the invoked freedom of establishment is at stake but, due to the temporary nature of the 51 Baars, supra. fn. 50, para Fidium Finanz, supra. fn C-492/04, Lasertec Gesellschaft für Stanzformen GmbH v Finanzamt Emmendingen ('Lasertec'), [2007] ECR I C-157/05, Winfried L. Holböck v Finanzamt Salzburg-Land ('Holböck'), [2007] ECR I See, e.g. WEBER, 'Fidium Finanz AG v Bundesantsalt für Finanzdienstleistungsaufsicht: the ECJ gives the wrong answer about the applicability of the free movement of capital between the EC Member States and non-member countries', BTR (2007), pp WEBER, supra. fn. 56, p See Case C-284/06 Finanzamt Hamburg-Am Tierpark v Burda GmbH, formerly Burda Verlagsbeteiligungen [2008] ECR I-00000, ('Burda'). 58 Gebhard, supra. fn. 16, para. 20.

10 10 self-employed activity, the freedom to provide services. 59 The cases of Gebhard or Schnitzer 60 are about the distinction between the material scope of the freedom to provide services and the freedom of establishment. Mr Gebhard, a German national and admitted to the Bar of Stuttgart (Germany), took up residency in Italy where he pursued his professional activity first as an associate and later as a partner of a law firm. 61 Upon starting his own business, his application, which based on the Council Directive 89/48/EEC 62, to the Milan Bar Council to be entered on the role of members of the bar, was denied. 63 In connection with the subsequent disputes, the ECJ had inter alia to decide which freedom applies. In its judgement the Court distinguished the freedom to provide services from the freedom of establishment by noting that "the temporary nature of the provision of services ( ) has to be determined in the light of its duration, regularity, periodicity and continuity". 64 In contrast, the freedom of establishment applies if a national of a Member States pursues his professional activity "on a stable and continuous basis in another Member State where he holds himself out from an established professional base to, amongst others, nationals of that State". 65 The Court essentially determined, like in Schnitzer, the functional scope of the mutually exclusive freedoms. Also in the judgements in Sacchi 66 and Schindler 67 the Court is determining whether the present cases come under the free movement of goods or freedom to provide services. Sacchi was about the qualification of tv-signals while Schindler concerned the importation of lottery advertisements and tickets. In both cases the Court decided that the freedom to provide services applies 68. In Omega, a case concerning the operation of a 'laserdome' which is normally used for the practice of the 'laser sport', the Court argued that "where a national measure affects both the freedom to provide services and the free movement of goods, [it] will, in principle, examine it in relation to just one of those two fundamental freedoms if it is clear that ( ) only one of those freedoms is entirely secondary in relation to the other". 69 It must thus be noted that the referred case actually contains two questions. One aspect concerns the fact that the required equipment is imported from UK to Germany and the other that the claimant's 'laser sport' business whose restriction is 59 Gerritse, supra. fn. 29, para C-215/01, Bruno Schnitzer ('Schnitzer'), [2003] ECR I Gebhard, supra. fn. 16, para Council Directive 89/48/EEC of 21 December. 63 Gebhard, supra. fn. 16, para. 6 and Gebhard, supra. fn. 16, para Gebhard, supra. fn. 16, para Sacchi, supra fn C-275/92, Her Madjesty's Customs and Excise v Gerhart Schindler and Jörg Schindler ('Schindler'), [1994] ECR I Sacchi, supra. fn. 24, para. 6; Schindler, supra. fn. 67, para C-36/02, Omega Spielhallen- und Automatenaufstellungs-GmbH v Oberbürgermeisterin der Bundesstadt Bonn ('Omega'), [2004] ECR I-9609, para. 3 and 26 with further references.

11 11 backed by the public policy reasons since it comprises simulating acts of homicide. 70 Any restriction in connection with the import of required equipment, which is "specifically designed for the prohibited variant of the laser game" is therefore "an unavoidable consequence of the restriction imposed with regard to supplies of services" Relationship between freedom of establishment or freedom to provide services and free movement of capital Two types of case remain for the analysis of the concept of the prevailing freedom, namely the relationship between the freedom of establishment and the free movement of capital as well as the relationship between the freedom to provide services and the free movement of capital. The question of the relationships has been extensively discussed. The reasons for the extensive academic writing was mainly the fact that non-resident taxpayers can, in a third-country context, only rely on the free movement of capital and the fact that there has suddenly been quite a series of cases referred to the ECJ. Except from the first decision in Sanz de Lera 72 with respect to the export of coins, banknotes or bearer cheques, which was subject to prior authorization, the third-state cases date between February 2006 and April The first case was Fidium Finanz 73, followed by the decisions in the FII Group Litigation 74, Thin Cap Group Litigation 75, A and B 76, Lasertec 77, Holböck 78, SEW 79, A 80 and CFC and Dividend Group Litigation 81. Besides these third-country cases, the ECJ also dealt with quite a few Community internal cases like the Baars, Cadbury-Schweppes etc. and the most recent decisions in Burda 82, Truck Center 83 and STEKO 84. All of these cases help to better understand the relationship between the two freedoms. 70 Omega, supra. fn. 69, para. 27 and Omega, supra. fn. 69, para Joined cases C-163/94, C-165/94 and C-250/94, Criminal proceedings against Lucas Emilio Sanz de Lera, Raimundo Díaz Jiménez and Figen Kapanoglu ('Sanz de Lera'), [1995] I Fidium Finanz, supra. fn C-446/04, Test Claimants in the Franked Investment Income Group Litigation v Commissioners of Inland Revenue ('Test Claimants in the FII Group Litigation'), [2006] ECR I C-524/04, Test Claimants in the Thin Cap Group Litigation v Commissioners of Inland Revenue ('Thin Cap Group Litigation'), [2007] ECR I C-102/05, Skatteverket v A and B ('A and B'), [2007] ECR I Lasertec, supra. fn Holböck, supra. fn C-415/06, Stahlwerk Ergste Westing GmbH v Finanzamt Düsseldorf-Mettmann ('SEW'), [2007] ECR I C-101/05, A v Skatteverket ('A'), [2007] ECR I C-201/05, The Test Claimants in the CFC and Dividend Group Litigation v Commissioners of Inland Revenue ('CFC and Dividend Group Litigation'), not yet reported. 82 Burda, supra. fn C-282/07, État belge - SPF Finances v Truck Center SA ('Truck Center'), not yet reported. 84 C-377/07, Finanzamt Speyer-Germersheim v STEKO Industriemontage GmbH ('STEKO').

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