Flemish succession duties exemption for family-owned businesses too restrictive?
A reference for a preliminary ruling to the ECJ by the Hasselt Court of First Instance concerning the Flemish exemption from succession duties for family-owned businesses has recently been published (Geurts and Vogten case, O.J., C-74/3, Case C-464/05). Article 60bis, ยง5 of the Flemish Code for Succession Duties provides for such an exemption on the condition that (i) at least five workers have been employed in the Flemish Region prior to the decease of the family-owner and (ii) the same rate of employment is maintained during the first five years following such decease. The deceased was a Dutch national who resided in Belgium but whose family business was established exclusively in the Netherlands. The Hasselt Court refers to the ECJ the question whether such conditions are compatible with the right of establishment and the free movement of capital. In light of the heirs of Barbier case (C-364/01), a finding by the ECJ in favour of the taxpayer, necessitating a change in the Flemish succession duties legislation, cannot be excluded.
