Schrödinger's cat is now out of the bag of fiscal uncertainty in relation to the use of the Maastricht freedom of movement of capital by third country residents in relation to fiscal impediments to free movement of capital. Articles 63 - 66 TFEU refer.  The effect will not be lost on tax administrations seeking to requalify foreign status and property rights to their own advantage.

Things changed beyond recognition in 1993, and the movement goes on.

A commentary by Edouard Crépey, the maître de requêtes involved in the judgement of the Conseil d'Etat CE 11-4-2014 n° 332885  has demonstrated to what extent the Member States are in fact acting in institutionalised contravention of their Treaty responsibilities on the basis that, if you don't have a vote, as a non-resident, you don't count, and can be spoliated; you MEP notwithstanding.

The French Article 164C CGI is a spoliation provision, as it has been admitted in the prior UK - French DTT of 1968 to be a assessing a "revenu fictif".  As we have advised, the French Conseil d'Etat has rendered article 164C CGI inapplicable, not on the basis of individual non-discrimination clauses in treaties but as a general principle of EU law. In fact the French tax administration, like all tax administrations,  drowned itself in the details of the bizarre avoidance of non-double taxation provisions which are the main feature of the Monegasque arrengement with France, without retaining awareness of the fuller EU picture. Monaco is not within the EU.

The highest French Court recognised as directly applicable and effective law that which the CJEU has been stating for some time, that third country residents, here resident in Monaco,  are entitled to the freedom of movement of capital under the post 1993 Maastricht amendments, particularly where it is a private investment not one relating to an economic activity.

What is interesting is that the ever increasing scope of TIEAs throughout the world will mean that this freedom will incease, rather than decrease. The CJEU has been quick to point out that, as the anti avoidance neurosis -my term-  behind the fiscal let outs contained in article 63 (1) TFEU and then limited in article 63 (3) in relation to third countries is reduced by TIEAs, Member States' ability to use the fiscal "letouts" will decrease, in its raison d'être, under the CJEU's watchful eye. The case of Elisa started that avalanche of common sense.

Edouard Crépey incidentally cites CJEU caselaw in effect confirming Overseas Chamber's position in relationj to HMRC's teratment of usufructs as a form of settlement that it is only by an underlying notion approximated to "full faith and credit" that any form of monetary union or capital market can function in relation to property and capital rights.  He also gives a precise indication of the limited extent of the applicability of the pre-1993 standstill provisions, which only apply to investments by third country nations. These pre-existing standstill restrictions can only apply to investments which are part of an economic activity, and not to private investments, which are therefore free. In other words, no standstill provision can adversely tax a private investment, whether from inside or outside the EU, or the EEA.

What is singular about this, and the learning of the Rapporteur, is that it is the highest court in France that has taken this step, and has reinforced its standing as an international tribunal to be reckoned with in implementing the Maastricht Treaty domestically as a matter of law, not of politico-economic expediency.

If we are to enjoy the reality of article 26 TFEU and the judicial area based on  principles elaborated elsewhere in the Maastricht Treaty, it is only by reference to the legal principles enshrined in it that the European and indeed non-European individual or company can apprehend their rights and their obligation within this area of law.  Leaving that to the Member States' administrations  is to give them too much power.  They are neither judge nor jury in the context of the TFEU provisions re-implementing and extending the acquis communataire; in particular the directly effective articles 26 and 56 TFEU.

The French Conseil d'Etat has set the example, and has in effect placed itself in harmony with the CJEU, rather than in opposition or discord with it. Perhaps the English Courts should consider a similar statement of principle in relation to extending the effect of Europe from merely those using the Saint Pancras underground extention to those more used to taking the Clapham omnibus. The two lines are within the same fiscal universe, not parallel ones.

Otherwise, with apologies to the Bard, but certainly not to Nigel Farage:

"so EU decrees,
Dead to infliction, to themselves are dead,
And HMRC plucks Freedom by the nose;
The babe beats the nurse, and quite athwart
Goes all decorum."

For a fuller explanation of the Schrödinger's Cat issue, and one of Einstein's inquisitive errors  see

http://www.informationphilosopher.com/solutions/experiments/schrodingerscat/ and

"It was Einstein who originated the suggestion that the superposition of Schrödinger's wave functions implied that two different physical states could exist at the same time. This was a serious interpretational error that plagues the foundation of quantum physics to this day.

This error is found frequently in discussions of so-called "entangled" states (see the Einstein-Podolsky-Rosen experiment)."

 

There is no room for two separate "states" applying to the same facts in the EU fiscal equation. TFEU rules, and the CJEU eliminate "entanglement" by EU legal certainty. The EU Nurse has greater, if not absolute authority over the recalcitrant babes post 1993. Perhaps something which would have met with Einstein's relieved approval.