Opinion of the Advocate-General
1 The points at issue in these proceedings are, first, the compatibility with Article 52 of the EC Treaty of domestic legislation which makes a particular form of tax relief available to companies belonging to a consortium subject to the condition that, where the consortium controls a holding company, most of the subsidiaries thereof are resident in the national territory; and, secondly, in the event that such legislation is incompatible, the importance and extent of the national court's obligation under Article 5 of the Treaty to adopt an interpretation which is consistent with Community law. The reference has been made by the House of Lords, and the relevant legislation is that of the United Kingdom.
The national legislation
2 The legislation applicable in the present case is to be found in sections 258 to 264 of the Income and Corporation Taxes Act 1970 (hereinafter `the Act'), which have since been replaced by similar provisions in the Income and Corporation Taxes Act 1988.
Those provisions govern, inter alia, `consortium relief'. (1) This essentially enables a company which is a member of a consortium to use losses incurred by subsidiaries controlled through a holding company to offset tax on its profits. Thus, pursuant to the legislation in question, the company belonging to the consortium may set losses incurred by a subsidiary against its chargeable profits - in proportion to the size of its shareholding - for the purposes of computing tax liability. The reasons why the legislation makes this option available have been explained in the course of the proceedings. However, they need not be considered here, save in order to assess whether the domestic legislation gives rise to a restriction on freedom of establishment, contrary to the prohibition laid down in Article 52 of the Treaty, and, if so, whether that restriction is capable of being justified.
3 Specifically, pursuant to section 258(1) of the Act, relief to which companies are entitled `for trading losses' may be surrendered by a company which is a member of a group of companies (the surrendering company) to another company in the same group (the claimant company). Under section 258(2), group relief is also available in situations involving consortia. For instance, it is available where one of the companies involved is a member of a consortium and the other is a company controlled by a holding company which is in turn owned by a consortium. (2) In accordance with section 259(1) and (8)(a) of the Act, in cases where the claimant company is a member of a consortium, only a fraction of the losses incurred by the surrendering company may be set off, that fraction being equal to the claimant company's share in the consortium.
The availability of `consortium relief' is also conditional on the company owned by the consortium being a `holding company' as defined in section 258(5)(b) of the Act, namely `a company the business of which consists wholly or mainly in the holding of shares or securities of companies which are its 90 per cent. subsidiaries, and which are trading companies'.
4 Lastly, section 258(7) provides that `references in this and the following sections of this Chapter to a company apply only to bodies corporate resident in the United Kingdom'. This is the provision whose interpretation and application have given rise to these proceedings.
The facts and the questions referred
5 Coopers Animal Health (Holdings) Ltd (hereinafter `Holdings') was set up on 17 May 1984, its shares being beneficially owned by a consortium formed by Wellcome Foundation Ltd and Imperial Chemical Industries plc (hereinafter `ICI') which, respectively, have a 51% and a 49% interest in Holdings. The latter carries on no business save that of holding shares in subsidiaries. Of its 23 subsidiaries, only 4 are resident in the United Kingdom, 6 being resident in other Member States and the remaining 13 in non-member countries.
6 One of the companies controlled by Holdings and resident in the United Kingdom is Coopers Animal Health Ltd (hereinafter `CAH'), which incurred considerable losses, particularly in the accounting periods ending, respectively, in 1985, 1986 and 1987. ICI accordingly applied to the Inland Revenue under section 258 of the Act for relief in respect of 49% of CAH's losses (the fraction corresponding to ICI's shareholding in Holdings).
The Inland Revenue refused to grant the relief sought, on the ground that, although all the companies involved (ICI, Holdings and CAH) were resident in the United Kingdom, most of the companies controlled by Holdings were resident abroad. In the light of section 258(7) of the Act - according to the Inland Revenue - that fact precluded Holdings from meeting the requirements for recognition as a `holding company' and, accordingly, for securing the related tax relief.
7 ICI brought an action challenging that interpretation. Both the High Court and the Court of Appeal upheld its claim owing to their adoption of a different interpretation of the relevant legislation and, in particular, of section 258(7), from that proposed by the Inland Revenue. In brief, both courts took the view that access to tax relief cannot be denied in cases such as this, where both the surrendering company and the claimant company are resident in the United Kingdom. It was not intended that, whenever the term `company' is used in the text of section 258 (including, that is to say, references to the holding company or the subsidiaries), it must be read in conjunction with the reference to `company' in the opening words of section 258(7), which merely defines the companies which may take advantage of the relief provided for in that section. Thus, according to that construction, companies resident in the United Kingdom cannot be denied relief in respect of losses incurred by subsidiaries which are also resident there.
8 On appeal by the Inland Revenue, however, the House of Lords in its capacity as court of last instance upheld the tax authorities' interpretation, thereby finding - solely on the basis of domestic law - that ICI was not entitled to the tax relief sought.
Before the House of Lords, however, ICI introduced a fresh argument - based on Community law - to challenge the denial of relief. In short, ICI claimed that the legislation at issue - or at least the Inland Revenue's interpretation thereof - was incompatible with Articles 52 and 58 of the EC Treaty in so far as the requirement that most of the companies controlled by Holdings had to be resident in the United Kingdom constituted a restriction (albeit an indirect one) on ICI's freedom of establishment and in particular of its right to own shares through a holding company in subsidiary companies resident in another Member State. In any event, according to ICI, in view of the fact that the relevant legislation was open to two possible interpretations - that adopted by the courts at first and second instance, and that favoured by the Inland Revenue - Article 5 of the Treaty placed the national court under a duty to choose the first, if it enabled any conflict, actual or potential, with Community law to be avoided.
9 Taking the view that an interpretation of the aforesaid provisions of Community law was necessary in order to enable it to give judgment in the dispute before it, the House of Lords referred the following two questions to the Court for a preliminary ruling:
`1. In a situation where:-
(i) a company (Company A) is resident in a Member State of the European Union
(ii) Company A is part of a consortium with another company (Company B) also resident in that Member State
(iii) Company A and B jointly own a holding company (Company C) also resident in the Member State
(iv) Company C has a number of trading subsidiaries, which are resident either in that Member State, other Member States of the European Union or elsewhere in the world, and
(v) Company A is precluded from being entitled to claim against its corporation tax liability relief in respect of trading losses incurred by a trading subsidiary (also resident in that Member State) of Company C because the national legislation, construed as a matter of national law, required that the business of Company C should consist wholly or mainly in the holding of shares in subsidiaries which are resident in that Member State:-
Does the requirement identified at (v) constitute a restriction on the freedom of establishment under Article 52 of the EC Treaty? If so, is such treatment nevertheless justified under Community law?
2. If the requirement under (v) is an unjustified restriction under Community law, does Article 5 of the EC Treaty require a national court to interpret the relevant national legislation, so far as is possible, so as to comply with Community law, even though neither Company A, Company B nor Company C is itself seeking to exercise any rights under Community law, and even if an interpretation of national legislation which would comply with Community law would have the effect of giving relief where the business of Company C consisted mainly in the holding of shares in subsidiaries established outside the EC/EEA? Or does Article 5 have the consequence only that the national legislation, despite its interpretation, takes effect subject to the requirements of Community law in a case where these requirements are in point?'
Question 1
10 By its first question, the House of Lords asks the Court whether Article 52 of the Treaty precludes application of legislation such as that described above. In particular, on the assumption that the interpretation advocated by the Inland Revenue is correct, the House of Lords asks whether the pre-condition for tax relief - that most of the subsidiaries controlled by the holding company must be resident in the United Kingdom - entails an unjustified restriction on the freedom of establishment guaranteed by Article 52.
- Relevance
11 First of all, I should point out that doubts have been expressed in the course of the proceedings as to whether this question has any bearing on adjudication of the dispute in the main proceedings.
Specifically, the United Kingdom Government maintained that even if the legislation at issue were found to entail a restriction on freedom of establishment, incompatible with a proper interpretation of Article 52, that would have no relevance for the purposes of resolving the dispute in the main proceedings. ICI would in any event be denied the tax relief provided for by the Act, since the majority of the companies controlled by Holdings (as many as 13 out of 23) are resident, not in other Member States of the Community, but elsewhere.
12 The Commission has taken a different view. Given that the Court declines only in exceptional circumstances to give a ruling on questions referred under Article 177 of the Treaty, the Commission has pointed out that, in the light of section 258(5), the House of Lords itself acknowledged that the `quantitative' criterion is not the only test which can be applied in order to evaluate the business of a holding company; other yardsticks may be used, such as the turnover of the companies controlled. According to the Commission, the reference in section 258(5)(b), read in conjunction with section 258(7), to business consisting `wholly or mainly' in the holding of shares or securities of trading companies resident in the United Kingdom is not open to only one interpretation. In any event, it is for the national court to decide which test to apply, while the Court must provide any guidance which would be of assistance in resolving the dispute.
13 The first point I would make in that connection is that, according to estabished case-law, it is for the national court to assess the relevance of and the need for a preliminary ruling. Given its direct knowledge of the facts of the case and the relevant points of law, that court is in the best position to gauge the relevance of any questions concerning Community law raised in the dispute. (3) In principle, therefore, the Court considers itself bound to answer, except in cases where the questions referred are purely hypothetical or where it is quite obvious that the requested interpretation or ruling on the validity of a provision of Community law has no bearing on the facts or purpose of the main action. (4)
14 However, although I am somewhat sceptical as to whether an interpretation of Article 52 is really necessary in order to resolve the dispute before the House of Lords, it must be said that the present case does not fall within one of the admittedly exceptional situations described above. In particular, this case does not to my mind exhibit the characteristics which have hitherto led the Court to regard a reference as manifestly irrelevant to a decision on the dispute in the main proceedings. It is apparent from the order for reference that the proper construction of section 258(5) of the Act remains an open question. Indeed, it is only if the availability of tax relief is based on a quantitative criterion related to the residence of subsidiaries that it could appear fruitless to seek an interpretation of Article 52 since the majority of the companies in question are established outside the Community. The position would be different if, as contemplated in the order for reference itself, the national court were to use turnover as a criterion or apply some other test. In that case, appraisal of the compatibility of the legislation in question with Article 52 of the Treaty could well have a bearing on the decision as to whether or not ICI is entitled to the relief sought, if it transpired, for example, on the basis of the information available, that the turnover of the companies controlled were essentially attributable to those resident in the Community.
Accordingly, in so far as, for the purpose of evaluating the business of a holding company, factors other than the quantitative criterion may be taken into account when interpreting the domestic legislation, I consider it useful to provide the House of Lords with an answer to the first question.
- Substance
15 That said, I would first of all observe that, as the Court itself has stated on several occasions, `although, as Community law stands at present, direct taxation does not as such fall within the purview of the Community, the powers retained by the Member States must nevertheless be exercised consistently with Community law'. (5) In the field of direct taxation, therefore, Member States may not adopt measures which would have the effect of unjustifiably impeding freedom of movement for natural or legal persons carrying on an activity in a self-employed capacity. (6) It scarcely needs to be mentioned that taxation which is discriminatory or which somehow impedes or limits the exercise of the right of establishment is undoubtedly caught by Article 52. (7)
It is therefore necessary to determine, in relation to the present case, whether Article 52 of the Treaty precludes the legislation at issue from making consortium relief conditional on the holding company's business consisting, wholly or mainly, in the holding of shares of subsidiaries resident in the United Kingdom.
16 The requirement that most of the subsidiaries must be resident in the United Kingdom appears prima facie to be a restriction on freedom of establishment, prohibited by the first paragraph of Article 52. Relief is thereby precluded in all cases where the holding company's business consists, wholly or mainly, in the holding of shares of companies resident outside the United Kingdom, and thus even where such companies are established in other Member States. It is the latter aspect which is of significance for Community law, since in those circumstances the legislation at issue limits, or at least discourages, the exercise by British companies of the right to create corporate structures in other Member States.
17 To my mind there can be no doubt that such legislation is restrictive. On that point, suffice it to recall the judgment in Daily Mail, (8) in which the Court reaffirmed that `freedom of establishment constitutes one of the fundamental principles of the Community and that the provisions of the Treaty guaranteeing that freedom have been directly applicable since the end of the transitional period', before going on to explain that `even though those provisions are directed mainly to ensuring that foreign nationals and companies are treated in the host Member State in the same way as nationals of that State, they also prohibit the Member State of origin from hindering the establishment in another Member State of one of its nationals or of a company incorporated under its legislation which comes within the definition contained in Article 58'. (9)
18 This is typical of restrictions on `exits'. Tax disincentives undoubtedly make the creation of cross-border corporate structures a less attractive prospect for companies established in the United Kingdom. In so far as such a restriction applies to subsidiaries resident in other Member States, the United Kingdom legislation entails - I repeat - an obstacle to the freedom of establishment guaranteed by Article 52 of the Treaty. Furthermore, the legislation at issue appears particularly unfavourable to companies which belong to a consortium as opposed to a group, since in the latter case the setting-off of losses against profits would still be possible (a point made by the Commission and not disputed).
Nor is it a valid objection to argue - as does the United Kingdom Government - that a distinction based on the residence of a company's subsidiaries does not amount to discrimination since the situations involved are not comparable. The legislation at issue concerns companies which are liable to tax in the United Kingdom and makes tax relief conditional on the manner in which the right of establishment is exercised in other Member States of the Community as well.
19 In those circumstances, it only remains to determine whether the restriction in question may be justified in the light of Community law.
In that connection, both ICI and the Commission have ruled out that possibility. According to the United Kingdom, on the other hand, it is a measure justified in terms of its objective, which is to prevent the creation of foreign subsidiaries from being used as an easy means of depriving the United Kingdom Treasury of tax revenue.
20 The first difficulty which arises in this connection is whether or not to class the restriction at issue as giving rise to discrimination based on the place of establishment. The implications in respect of a possible justification will vary according to the solution adopted. The Court has consistently held that a discriminatory measure is compatible with Community law only if it falls within the scope of one of the derogations expressly provided by the Treaty. (10) Where, however, the measure in question applies without distinction to all persons including foreigners, the measures restricting freedom of establishment are compatible if they are in furtherance of imperative requirements in the general interest, if they are suitable for securing the attainment of the objective pursued and if they do not go beyond what is necessary to attain it. (11)
21 Once again, the answer to the question referred depends on where emphasis is placed. It is apparent, for example, that the legislation at issue discriminates between companies resident in the United Kingdom, according to whether or not they have exercised their freedom of establishment in other Member States, through a holding company, for instance. In other words, the distinction affects companies whose registered office is in the same Member State and is linked to their decision whether or not to avail themselves of the possibility, guaranteed by Article 52 of the Treaty, of setting up branches or subsidiaries in other countries, even if they are Member States of the Community.
22 Admittedly, even if Article 52 of the Treaty ensured that all subsidiaries resident in the Community were placed on an equal footing with those resident in the United Kingdom, a further level of discrimination evidently cannot be ruled out. That is to say, there would still be discrimination between the companies which exercise the right of establishment, depending on the precise form this takes: tax relief would be granted where the holding company's business consisted, wholly or mainly, in holding shares of companies established in the territory of Member States, but denied where only a minority of the companies were resident in the territory concerned.
That detail is especially significant in the present case, where some of the companies controlled by Holdings are resident in Member States other than the United Kingdom. However, that form of discrimination clearly cannot be challenged on the basis of Article 52 of the Treaty, since there is no restriction on freedom of establishment in the Community. Although discrimination based on the place of establishment might have been eliminated in compliance with Article 52 in respect of the United Kingdom or other Member States of the Community, the United Kingdom legislation discourages, if anything, the creation of subsidiaries in countries outside the Community. That is why, as we shall have occasion to verify when examining the second question, ICI seeks to rely on Article 5 of the Treaty with a view to securing in any event the tax relief provided by the Act.
23 The domestic legislation, in so far as it gives rise to discrimination, may clearly be justified only in the exceptional circumstances envisaged by the Treaty. This is the approach taken by the Commission, which has made a short study of the problem of justificatory grounds, from which it concludes that none of the derogations provided for in Article 56 (public policy, public security or public health) applies in the present case. Considerations of a purely economic nature, such as loss of tax revenue, cannot justify restrictions of a discriminatory character which fall within the scope of Article 52 of the Treaty. (12)
24 However, even if the measure at issue were to be regarded as applying without distinction, in view of the fact that the requirement is imposed on companies which are in any event liable to taxation in the United Kingdom, it would still be incompatible with the rules regarding freedom of establishment. I have no hesitation in stating that the arguments put forward in this case to justify the legislation at issue are devoid of substance.
25 Admittedly, on a number of occasions the Court has acknowledged that the need for cohesion in the application of tax systems can constitute sufficient justification, linked to mandatory requirements in the general interest, for imposing a restriction on freedom of establishment. (13) It is also true, however, that the problem in question has in general arisen in respect of domestic legislation which distinguished between legal or natural persons on grounds of their being resident or having their registered office in the territory of another Member State.
In Bachmann, which concerned the application to residents of domestic legislation making the deduction of certain contributions from taxable income conditional on those contributions having been paid in that Member State, the Court stated that the aim of the Belgian legislation was to enable the loss of tax revenue resulting from the deduction of life assurance contributions to be offset by the taxation of pensions, annuities or capital sums payable by the insurers. The cohesion of the tax system would thus have been undermined if the Belgian State had been compelled to offer the same tax advantages to persons insured with companies established abroad, in view of the difficulty of collecting tax on earnings paid abroad. (14) Given that the domestic legislation was expressly stated to be non-discriminatory, the Court therefore concluded that it could not be regarded as incompatible with Article 59 since it was justified by requirements in the general interest.
26 Returning to the instant case, it therefore remains to be determined whether the objective of preventing the creation of subsidiaries outside the United Kingdom, and thus in other Member States as well, depriving the United Kingdom Treasury of tax revenue is capable of justifying the restriction on freedom of establishment resulting from the legislation on consortium relief.
27 According to the United Kingdom, that question should be answered in the affirmative. Obviously, there is no United Kingdom tax charge on a non-resident subsidiary. Accordingly, relief on losses incurred by a subsidiary resident in the United Kingdom would not be compensated by taxation of the profits made by other subsidiaries, resident in other States. In the United Kingdom's view, that is incompatible with the rationale underlying consortium relief, which is to extend the same tax treatment to a company when it is a member of a consortium as it would receive if it participated directly in the business undertaken by the joint venture.
28 I have serious reservations regarding that argument. The objective is not so much that of preserving the cohesion of the tax system as, quite simply, of preventing a fall in tax revenue. If that is indeed the position, I do not believe that it can justify a derogation from a fundamental principle guaranteed by the Treaty.
That is not all, however. Even if the objective pursued were deemed to be valid under Community law, it would still have to pass the proportionality test. Here, too, I have misgivings. It is highly doubtful whether the restrictive measure in question is suited to attaining the objective pursued. Indeed, in circumstances where tax relief is denied solely on account of Holdings' exercise of freedom of establishment in other Member States, I do not believe it can seriously be maintained that the legislation at issue is an effective means of ensuring the cohesion of the tax system.
29 I find it difficult to reconcile the need to prevent tax evasion in order to preserve the cohesion of the tax system with the fact that consortium relief is granted whenever only a minority of companies is resident outside the United Kingdom, and denied whenever such companies are in the majority. To my mind the risk of evasion, if indeed it exists, is also present in the former set of circumstances, albeit - according to the proportion of non-resident companies - to a lesser degree.
30 Furthermore, it remains to be demonstrated that no other measures, equally effective but less restrictive of freedom of establishment, are available. On that point, I would suggest that neither the Inland Revenue nor the United Kingdom Government in its observations has established that the measures at issue are the only ones available and that the objective could not be effectively pursued by other means.
31 It seems to me that all the foregoing observations adequately support the conclusion that domestic legislation which makes consortium relief available to companies only if the business of the holding company controlled by the company seeking relief consists, wholly or mainly, in holding shares of subsidiaries resident in the Member State concerned constitutes a restriction on freedom of establishment, which is prohibited by the Treaty and cannot otherwise be justified.
Question 2
32 Once again I would refer to the particular features of the present case and its implications for Community law. Article 52 of the Treaty is relevant in so far as a requirement imposed by domestic legislation in respect of tax relief also affects companies availing themselves of the right of establishment in other Member States of the Community. What this means in practice is that, in the present case, the domestic legislation is contrary to Article 52 in so far as it restricts freedom of establishment in other Member States of the Community.
As regards the further difficulty, namely discrimination against companies which choose to set up subsidiaries mostly in non-member countries, Article 52 of the Treaty is of no avail, since the matter falls outside the scope of Community law.
If that is indeed the position, as I believe it undoubtedly is, not even the interpretation of Article 5 of the Treaty sought by the House of Lords can be of any assistance. In the first place, in so far as one aspect of the present case is covered by Article 52 of the Treaty, which has direct effect, the national court's duty to interpret domestic legislation consistently with Community law is irrelevant. The result sought by harmonisation of national and Community law is already achieved by virtue of the fact that individuals may rely on Community law in proceedings before the national courts.
Secondly, nor can the duty of consistent interpretation laid down by Article 5 of the Treaty be relied on in relation to the aspect of the present case which is not covered by Article 52 of the Treaty. The discrimination against companies which choose to hold shares in subsidiaries, the majority of which are resident in non-member countries, by comparison with those whose subsidiaries are all resident in the United Kingdom (or in the Community) or which have only a minority of subsidiaries resident outside the United Kingdom (or the Community), is not relevant for the purposes of Community law. It follows that neither Article 52 nor Article 5 applies. Accordingly, the national court is under no obligation pursuant to Article 5 of the Treaty to adopt an interpretation consistent with Community law in respect of a situation, or, as in the present case, aspects of a situation to which Community law does not apply.
33 In the light of the foregoing, I therefore propose that the Court should reply as follows to the questions referred by the House of Lords:
(1) Article 52 of the Treaty is to be interpreted as precluding the application of legislation of a Member State which prevents a company established in the territory of that State from obtaining tax relief in respect of losses incurred by another company, established in the same State and controlled by the first company through a holding company, in cases where the holding company's business consists, wholly or mainly, in holding shares of subsidiaries resident outside that State, in so far as such legislation constitutes a restriction on the exercise of the right of establishment in other Member States of the European Union.
(2) Article 5 of the Treaty does not require the national courts to interpret domestic legislation consistently with Community law in respect of a situation, or aspects of a situation, falling outside the scope of Community law.
(1) - The expression `consortium' is used here to refer to an agreement between undertakings to form a joint venture to operate at international level.
(2) - Pursuant to section 258(8), a company is owned by a consortium `if three-quarters or more of the ordinary share capital of the company is beneficially owned between them by companies of which none beneficially owns less than one-twentieth of that capital, and those companies are called the members of the consortium'.
(3) - See Case 83/78 Pigs Marketing Board [1978] ECR 2347, paragraph 25, and Case C-146/93 McLachlan [1994] ECR I-3229, paragraph 20.
(4) - Order of 16 May 1994 in Case C-428/93 Monin Automobiles [1994] ECR I-1707; Case C-415/93 Bosman [1995] ECR I-4921, paragraph 61; Case C-134/95 USSL No 47 di Biella [1997] ECR I-195, paragraph 12; and Case C-291/97 Martino Grado [1997] ECR I-5531, paragraph 12.
(5) - See also Case C-246/89 Commission v United Kingdom [1991] ECR I-4585, paragraph 12; Case C-279/93 Schumacker [1995] ECR I-225, paragraph 21; Case C-107/94 Asscher [1996] ECR I-3089, paragraph 36; Case C-250/95 Futura Participations and Singer [1997] ECR I-2471, paragraph 19. See also, however, Council Directive 90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries in different Member States (OJ 1990 L 225, p. 6).
(6) - Opinion of Advocate General Léger of 15 February 1996 in Asscher (cited in footnote 5; point 55 of the Opinion).
(7) - Case C-330/91 Commerzbank [1993] ECR I-4017, paragraph 20.
(8) - Case 81/87 [1988] ECR 5483, paragraph 15.
(9) - Ibid., paragraph 16.
(10) - See Case 352/85 Bond van Adverteerders [1988] ECR 2085, paragraph 32, in which the Court stated that `[discriminatory] national rules ... are compatible with Community law only if they can be brought within the scope of an express derogation'.
(11) - See, most recently, Case C-55/94 Gebhard [1995] ECR I-4165, paragraph 37, in which the Court referred without distinction to all the fundamental freedoms guaranteed by Community law.
(12) - Judgment in Bond van Adverteerders (cited in footnote 10); Case C-288/89 Gouda [1991] ECR I-4007, paragraph 11. In the judgment in Case C-484/93 Svensson [1995] ECR I-3955, paragraph 15, given that the Luxembourgish legislation on interest rate subsidies in respect of loans for the construction of housing entailed discrimination based on the place of establishment, the Court added that `such discrimination can only be justified on the general interest grounds referred to in Article 56(1) of the Treaty [...] which do not include economic aims'. It should be noted, however, that on the same occasion the Court also considered whether the legislation at issue, albeit classed as discriminatory, was necessary in order to safeguard the cohesion of the tax system. In so doing, however, the Court also determined whether the measure in question could be justified in terms of requirements which may be taken into account only in the case of measures which apply without distinction. In my Opinion of 16 September 1997 in Case C-120/95 (Decker) and Case C-158/95 (Kohll), still pending, I have already explained the difficulties in regard to consistency, raised by the Court's recent case-law (see, in particular, points 49 and 50).
(13) - Case C-204/90 Bachmann [1992] ECR I-249, paragraph 21; Schumacker (cited in footnote 5), paragraph 47; Case C-80/94 Wielockx [1995] ECR I-2493, paragraph 25; and Asscher (cited in footnote 5), paragraph 59. See also my Opinion in Case C-118/96 Safir (still pending), point 20 et seq.
(14) - Bachmann, cited in footnote 13, paragraphs 22 and 23.
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