# C_2007315EN.01002501.xml

| 22.12.2007 | EN | Official Journal of the European Union | C 315/25 |
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22.12.2007

EN

Official Journal of the European Union

C 315/25

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Reference for a preliminary ruling from the Hof van Beroep te Brussel — Belgium lodged on 24 September 2007 — Belgische Staat v KBC Bank NV

(Case C-439/07)

(2007/C 315/44)

Language of the case: Dutch

Referring court

Hof van Beroep te Brussel

Parties to the main proceedings

Applicant: Belgische Staat

Applicant:

Defendant: KBC Bank NV

Defendant:

Questions referred

| 1. | Must Council Directive 90/435/EEC (1) of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States, in particular Article 4(1), first indent, thereof, be construed as precluding a situation in which a Member State applies the exemption relating to distributed profits received by a company of that State from its subsidiary in another Member State, except when the subsidiary is liquidated, by first including in full the distributed profits in the taxable basis and then deducting 95 % of those profits from the taxable basis but limiting the deduction to the amount of profits made in the taxable period in which the distribution of profits took place (after certain statutorily defined deductions) (Article 205(2) WIB/92 [Belgian Income Tax Code 1992] in conjunction with Article 77 KB/WIB.92 [Royal Decree implementing the Income Tax Code 1992]), in view of the fact that the result of such a limitation of the deduction of distributed profits is that, if the parent company had no or insufficient taxable profits during the taxable period in which the distributed profits were received, it would in a subsequent taxable period be taxed on those distributed profits which it had received, or at least that the losses of that taxable period would be offset by means of distributed profits, 95 % of which must remain untaxed pursuant to Article 4(1), first indent, in conjunction with Article 4(2), of Directive 90/435 and that consequently those losses, in the amount of the distributed profits received, could no longer be carried forward to a subsequent taxable period? |
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1.

Must Council Directive 90/435/EEC (1) of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States, in particular Article 4(1), first indent, thereof, be construed as precluding a situation in which a Member State applies the exemption relating to distributed profits received by a company of that State from its subsidiary in another Member State, except when the subsidiary is liquidated, by first including in full the distributed profits in the taxable basis and then deducting 95 % of those profits from the taxable basis but limiting the deduction to the amount of profits made in the taxable period in which the distribution of profits took place (after certain statutorily defined deductions) (Article 205(2) WIB/92 [Belgian Income Tax Code 1992] in conjunction with Article 77 KB/WIB.92 [Royal Decree implementing the Income Tax Code 1992]), in view of the fact that the result of such a limitation of the deduction of distributed profits is that, if the parent company had no or insufficient taxable profits during the taxable period in which the distributed profits were received, it would in a subsequent taxable period be taxed on those distributed profits which it had received, or at least that the losses of that taxable period would be offset by means of distributed profits, 95 % of which must remain untaxed pursuant to Article 4(1), first indent, in conjunction with Article 4(2), of Directive 90/435 and that consequently those losses, in the amount of the distributed profits received, could no longer be carried forward to a subsequent taxable period?

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| 2. | If the aforementioned Directive 90/435/EEC is to be construed as meaning that the Belgian rule is contrary to Article 4(1), first indent, of the Directive with regard to distributed profits received by a Belgian parent company from a subsidiary established within the EU, must it then be determined that that provision of the Directive is also incompatible with the application of the Belgian rule to distributed profits received by a Belgian parent company from a Belgian subsidiary where, as in the present case, the Belgian legislature, in transposing the Directive into Belgian law, has chosen to apply the same treatment to purely internal situations and to those governed by the Directive and has therefore aligned the Belgian legislation with the Directive also for purely internal situations? |
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2.

If the aforementioned Directive 90/435/EEC is to be construed as meaning that the Belgian rule is contrary to Article 4(1), first indent, of the Directive with regard to distributed profits received by a Belgian parent company from a subsidiary established within the EU, must it then be determined that that provision of the Directive is also incompatible with the application of the Belgian rule to distributed profits received by a Belgian parent company from a Belgian subsidiary where, as in the present case, the Belgian legislature, in transposing the Directive into Belgian law, has chosen to apply the same treatment to purely internal situations and to those governed by the Directive and has therefore aligned the Belgian legislation with the Directive also for purely internal situations?

| 3. | If Directive 90/435/EEC must be taken to mean that the Belgian rule is contrary to Article 4(1), first indent, of the Directive with regard to distributed profits received by a Belgian parent company from a subsidiary established in the EU and the Leur-Bloem judgment of the Court of Justice (Case C-28/95 Leur-Bloem [1995] ECR I-4161) is extended to cover distributed profits received from a subsidiary established in Belgium, is it then contrary to Article 56(1) EC for Belgium to continue to apply the legislative provision in question, unchanged, to dividends originating from subsidiaries established in non-member countries, on the ground that the latter dividends are then treated less favourably than domestic dividends or EU dividends? |
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3.

If Directive 90/435/EEC must be taken to mean that the Belgian rule is contrary to Article 4(1), first indent, of the Directive with regard to distributed profits received by a Belgian parent company from a subsidiary established in the EU and the Leur-Bloem judgment of the Court of Justice (Case C-28/95 Leur-Bloem [1995] ECR I-4161) is extended to cover distributed profits received from a subsidiary established in Belgium, is it then contrary to Article 56(1) EC for Belgium to continue to apply the legislative provision in question, unchanged, to dividends originating from subsidiaries established in non-member countries, on the ground that the latter dividends are then treated less favourably than domestic dividends or EU dividends?

Leur-Bloem

Leur-Bloem

| 4. | Does Article 43 EC preclude the application of a legislative rule of a Member State under which, for the purposes of assessment to corporation tax, the exemption of the distributed profits received during a taxable period by a company from its subsidiary established in another Member State is limited in the first Member State to the amount of the profit made in the taxable period during which the profits were distributed (after certain statutorily defined deductions), whereas a full exemption of the distributed profits would be possible if that company had set up a permanent establishment in that other Member State? |
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4.

Does Article 43 EC preclude the application of a legislative rule of a Member State under which, for the purposes of assessment to corporation tax, the exemption of the distributed profits received during a taxable period by a company from its subsidiary established in another Member State is limited in the first Member State to the amount of the profit made in the taxable period during which the profits were distributed (after certain statutorily defined deductions), whereas a full exemption of the distributed profits would be possible if that company had set up a permanent establishment in that other Member State?

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(1)  OJ 1990 L 225, p. 6.

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