Practice Areas: Tax

Type: Abreu News

Abreu Advogados advised Faurécia on a landmark judgement by the Court of Justice of the European Union

The Court’s decision, which pitted a car company against the Tax and Customs Authority, considered that the principle of the free movement of capital would be jeopardised by excluding borrowers established in other member states from exemption from stamp duty on cash-pooling operations.

The Court of Justice of the European Union (CJEU) thus came down in favour of Faurécia – Assentos de Automóvel, in a dispute relating to stamp duty on short-term treasury operations, in what is the first historic agreement on this matter by the Court of Justice.

The CJEU judgement states that:

Article 63 of the Treaty on the Functioning of the Union must be interpreted as precluding legislation of a Member State under which short-term treasury operations are exempt from stamp duty where they involve two entities established in that Member State, but are not exempt where the borrower is established in another Member State.

Abreu Advogados, through Partner Maria Dulce Soares, honorary partner Miguel Teixeira de Abreu, and professional partners Mariana Gouveia de Oliveira and Susana A. Duarte advised Faurécia – Assentos de Automóvel in this case, and this ruling followed several favourable arbitration decisions by the independent law firm.