CASE C‑725/18 ANTON VAN ZANTBEEK VOF V MINISTERRAAD SHAKUR SHAFA’ATU AMEEN

CASE C‑725/18 ANTON VAN ZANTBEEK VOF V MINISTERRAAD

SHAKUR SHAFA’ATU AMEEN

Case C‑725/18 Anton van Zantbeek VOF v Ministerraad – Case Note

1.1 Facts and National Law

Anton van Zantbeek VOF, a Belgian company, challenged a 2016 amendment to Belgium’s Code of Miscellaneous Duties and Taxes that extended the scope of the tax on stock exchange transactions (taks op de beursverrichtingen, or “TOB”). Originally, this tax applied to stock transactions concluded or executed in Belgium through a professional intermediary. The amendment (in the Programme Law of 25 December 2016) provided that a transaction would also be deemed concluded in Belgium – and thus subject to TOB – if a Belgian resident investor (whether an individual domiciled in Belgium or a company’s Belgian establishment) placed the order through a professional intermediary established abroad. In such cases, the law made the Belgian investor (the “issuer of the order”) personally liable for declaring and paying the tax, since a foreign broker cannot be compelled to comply with Belgian tax obligations. By contrast, if the investor uses a Belgian intermediary, the intermediary is required to withhold and remit the tax at source. Anton van Zantbeek VOF contended that this differential treatment penalized Belgian investors who choose non-Belgian brokers and thus violated EU free movement rights. The Belgian Constitutional Court (Grondwettelijk Hof) referred to the Court of Justice of the EU (CJEU) the question whether the extended TOB regime was compatible with the fundamental freedoms of the TFEU – in particular the freedom to provide services (Article 56 TFEU) and possibly the free movement of capital (Article 63 TFEU)  .

2 Case Analysis

Fundamental Freedom at stake

: The CJEU observed that the measure’s primary impact was on cross-border investment services rather than the movement of capital as such. The TOB is levied only when a transaction involves a financial service provider (intermediary), and the referring court’s concern centered on the extra burden for clients of foreign intermediaries . Although stock trades inherently involve capital movements, any restriction on capital flow here was deemed merely an inevitable consequence of the restriction on services  . The Court therefore analyzed the case solely under Article 56 TFEU – the freedom to provide services (with the parallel provision of Article 36 EEA for the European Economic Area) . Notably, Article 56 protects not just service providers but also service recipients, including investors who seek financial services across borders  . In this case, Belgian investors are recipients of brokerage services, so they can invoke the freedom to choose service providers established in other Member States without undue hindrance.

Restriction and Comparability: The extended TOB regime introduced a difference in treatment for Belgian residents depending on whether they use a domestic or foreign intermediary for stock transactions. The situations are objectively comparable: a Belgian investor executing a securities trade is in the same position whether the trade is brokered by a firm in Belgium or by one in another Member State . In both scenarios the substantive transaction (buying or selling stocks) is the same and subject to the same tax in principle. Under the new law, the tax rate on the transaction is indeed identical regardless of the intermediary’s location . However, the compliance burden shifts when a non-resident broker is used: the resident investor must himself report the trade to the tax authorities and pay the TOB within a specified time, with the risk of fines for non-compliance . If a Belgian intermediary were used, those administrative duties (filing the order statement and remitting the tax) would be handled entirely by the intermediary as withholding agent . Thus, Belgian investors hiring foreign brokers incur additional liabilities and obligations that do not apply to those who stay with local brokers . The Court found that this discrepancy is liable to dissuade Belgian residents from using financial services offered by non-resident intermediaries, and correspondingly it makes it harder for foreign brokers to offer their services to Belgian clients on an equal footing . In legal terms, the Belgian measure restricts the freedom to provide services under Article 56 TFEU, since it “prohibits, impedes or renders less attractive” the exercise of that freedom in a cross-border context  .

Justification – Overriding Public Interest: A restriction on the freedom to provide services can be permissible if it is justified by overriding reasons in the public interest and if the measures are proportionate to those legitimate aims . The Belgian government defended the TOB extension on grounds of ensuring effective tax collection and fiscal supervision, and combating tax evasion . In essence, without this law, a Belgian investor could avoid or evade the TOB by using a foreign broker who is beyond Belgian jurisdiction, leading to unequal tax enforcement. The government also noted a concern about unfair competition: domestic intermediaries were obliged to collect the TOB from their clients, whereas foreign intermediaries had no such obligation, potentially giving the latter an artificial advantage in attracting Belgian customers . The Court acknowledged that preventing tax avoidance and securing the effective collection of taxes are well-recognized imperative requirements that can justify restrictions on free movement  . Likewise, maintaining the integrity of the tax system and avoiding distortions of competition in the financial services market can fall within the public-interest justifications. The aims cited here – combating tax evasion and ensuring that all stock transactions by Belgian residents bear the same tax incidence – were deemed legitimate objectives under EU law .

Proportionality of the Measure: The crux of the case was whether the Belgian rules went beyond what was necessary to achieve those legitimate objectives. The proportionality test required the Court to assess (1) whether the measure was suitable to attain its aims, and (2) whether the measure was the least restrictive means of doing so (no less onerous alternative could equally achieve the aim).

• Suitability: The Court had little difficulty finding the measure appropriate. By making the resident investor liable for TOB when using a foreign intermediary, Belgium closed a loophole that would have left such transactions untaxed. This ensures that stock trades by Belgian residents cannot escape taxation, thereby safeguarding the tax’s effectiveness and discouraging tax-motivated choices of intermediary . In other words, the rule directly furthers the goal of comprehensive tax collection on securities transactions. The Court noted that this approach also strengthens fiscal supervision, making it harder for individuals to circumvent the tax by routing orders abroad . It thus concluded that the legislation is suitable and “appropriate for attaining the objectives it pursues.” 

• Necessity (Least Restrictive Means): The more delicate question was whether the same goals could be achieved with a less restrictive impact on cross-border services. Anton van Zantbeek argued that Belgium could rely on administrative cooperation mechanisms (such as EU directives on tax information exchange) to track transactions executed abroad, rather than burdening the taxpayer. The Court, however, was persuaded that those tools were insufficient for a tax on individual transactions: real-time or detailed information for each stock trade by private investors is not readily obtainable through standard inter-governmental exchanges . Given the volume and timing of trades, automatic exchange systems would not effectively ensure every taxable transaction is caught, nor enable timely collection. The Belgian measure was designed to fill this gap by placing responsibility on the investor at the source.

Crucially, the Court emphasized that the law contains built-in safeguards limiting the burden to what is necessary . If the Belgian resident can demonstrate that the TOB on a given transaction has already been paid (for instance, if the foreign intermediary voluntarily paid it or used a Belgian representative), then the resident is exempt from any obligation to pay or declare the tax again . In practice, the investor need only obtain an “order statement” from the intermediary – a document listing the details of the transaction and the amount of TOB due – along with proof of the tax payment, such as a bank confirmation . Presenting this to the authorities relieves the client of further compliance. Moreover, the Belgian legislation explicitly permits a foreign broker to appoint a fiscal representative in Belgium (approved by the Ministry of Finance) to handle the TOB formalities on the intermediary’s behalf . This option means the foreign service provider can opt to shoulder the administrative tasks just like a local broker would, thereby sparing the client any extra burden. The appointment of a local representative also helps overcome practical difficulties (for example, completing tax declarations in the proper language or format) . It is notable that these mechanisms are optional and flexible – the parties can choose how to comply in the most convenient way, whether by the intermediary ensuring payment or by the client self-declaring, etc. The Court regarded this “choice of options, to the benefit of both resident issuers of an order and non-resident intermediaries” as a key factor that minimizes the restrictive effect of the law . Because the law provides avenues to satisfy the tax with minimal hassle (mirroring the normal domestic procedure as closely as possible), it does not go beyond what is necessary to achieve the objective of effective tax collection .

In sum, the CJEU found that the Belgian measure strikes a fair balance: it targets genuine public interest concerns and includes proportionate safeguards to protect the freedom to provide services. The burden on cross-border service usage is mitigated to the extent necessary to ensure the tax cannot be evaded . The slight deterrent effect is an inherent consequence of requiring equal tax compliance, and the Court was satisfied that no significantly less-restrictive alternative would achieve the same result with equal effectiveness.

Conclusion: The Court of Justice concluded that Article 56 TFEU (and the parallel EEA rule) “does not preclude” the Belgian legislation extending the stock exchange transaction tax to orders placed through foreign intermediaries . While the law created a restriction on the freedom to provide services, that restriction was justified by overriding public interest reasons (preventing tax avoidance and ensuring fiscal effectiveness) and was implemented in a proportionate manner. The judgment thus upheld the Belgian provisions as compatible with EU law. In doing so, the Court’s reasoning reflects its typical four-step analysis: identifying the relevant fundamental freedom (freedom to provide services), recognizing a restrictive differential treatment, assessing legitimate justifications, and rigorously examining proportionality. Anton van Zantbeek confirms that Member States may enforce tax compliance on cross-border activities without infringing EU freedoms, so long as the measures are carefully tailored and do not unduly impede the single market’s principle of free service provision .