# C_2017382EN.01001002.xml

| 13.11.2017 | EN | Official Journal of the European Union | C 382/10 |
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13.11.2017

EN

Official Journal of the European Union

C 382/10

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Judgment of the Court (Second Chamber) of 14 September 2017 (request for a preliminary ruling from the Court of Appeal (England & Wales) (Civil Division) — United Kingdom) — The Trustees of the BT Pension Scheme v Commissioners for Her Majesty’s Revenue and Customs

(Case C-628/15) (1)

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((Reference for a preliminary ruling - Free movement of capital - Article 63 TFEU - Scope - Tax legislation of a Member State - Corporation tax - Tax credit - Pension funds - Refusal to grant the tax credit to shareholders not subject to tax on investment income for dividends arising from foreign income - Interpretation of the judgment of 12 December 2006, Test Claimants in the FII Group Litigation (C-446/04, EU:C:2006:774) - Tax credit unlawfully withheld - Remedies))

(2017/C 382/11)

Language of the case: English

Referring court

Referring court

Court of Appeal (England & Wales) (Civil Division)

Parties to the main proceedings

Parties to the main proceedings

Applicant: The Trustees of the BT Pension Scheme

Applicant:

Defendant: Commissioners for Her Majesty’s Revenue and Customs

Defendant:

Operative part of the judgment

Operative part of the judgment

| 1. | Article 63 TFEU must be interpreted as conferring, in circumstances such as those at issue in the main proceedings, rights on a shareholder receiving dividends treated as ‘foreign income dividends’. |
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1.

Article 63 TFEU must be interpreted as conferring, in circumstances such as those at issue in the main proceedings, rights on a shareholder receiving dividends treated as ‘foreign income dividends’.

| 2. | EU law requires that the domestic law of a Member State provide remedies to shareholders who, in a situation such as that at issue in the main proceedings, have received dividends treated as ‘foreign income dividends’ but have not, however, obtained a tax credit in respect of those dividends, in order to enable those shareholders to enforce the rights that Article 63 TFEU confers on them. In that regard, the national court with jurisdiction must ensure that shareholders not subject to income tax in respect of dividends who have received dividends that have their origin in foreign-sourced dividends treated as ‘foreign income dividends’, such as the Trustees of the BT Pension Scheme, have a remedy which, first, ensures payment of such a tax credit — of which the beneficiaries have been unduly deprived — under rules which are not less favourable than those relating to an action seeking payment of a tax credit, or of a comparable tax advantage, in a situation where the tax authorities have unduly deprived the beneficiaries of that tax credit or of that tax advantage on a distribution of dividends which have their origin in the dividends received from a UK-resident company and, second, allows the protection of the rights conferred on such shareholders by Article 63 TFEU to be guaranteed in an effective manner. |
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2.

EU law requires that the domestic law of a Member State provide remedies to shareholders who, in a situation such as that at issue in the main proceedings, have received dividends treated as ‘foreign income dividends’ but have not, however, obtained a tax credit in respect of those dividends, in order to enable those shareholders to enforce the rights that Article 63 TFEU confers on them. In that regard, the national court with jurisdiction must ensure that shareholders not subject to income tax in respect of dividends who have received dividends that have their origin in foreign-sourced dividends treated as ‘foreign income dividends’, such as the Trustees of the BT Pension Scheme, have a remedy which, first, ensures payment of such a tax credit — of which the beneficiaries have been unduly deprived — under rules which are not less favourable than those relating to an action seeking payment of a tax credit, or of a comparable tax advantage, in a situation where the tax authorities have unduly deprived the beneficiaries of that tax credit or of that tax advantage on a distribution of dividends which have their origin in the dividends received from a UK-resident company and, second, allows the protection of the rights conferred on such shareholders by Article 63 TFEU to be guaranteed in an effective manner.

| 3. | Neither the fact that the Trustees of the BT Pension Scheme are not subject to income tax in respect of the dividends they receive, the fact that the infringement of EU law at issue is not, in the referring court’s view, sufficiently serious so as to give rise to the non-contractual liability of the Member State concerned in favour of the company distributing dividends treated as ‘foreign income dividends’, under the principles established in the judgment of 5 March 1996, Brasserie du pêcheur and Factortame (C-46/93 and C-48/93, EU:C:1996:79) nor the fact that a UK-resident company has distributed an increased amount of dividends treated as ‘foreign income dividends’ in order to make up for the fact that the recipient shareholder was not entitled to a tax credit are such as to alter the answers given to the other questions asked by the referring court. |
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3.

Neither the fact that the Trustees of the BT Pension Scheme are not subject to income tax in respect of the dividends they receive, the fact that the infringement of EU law at issue is not, in the referring court’s view, sufficiently serious so as to give rise to the non-contractual liability of the Member State concerned in favour of the company distributing dividends treated as ‘foreign income dividends’, under the principles established in the judgment of 5 March 1996, Brasserie du pêcheur and Factortame (C-46/93 and C-48/93, EU:C:1996:79) nor the fact that a UK-resident company has distributed an increased amount of dividends treated as ‘foreign income dividends’ in order to make up for the fact that the recipient shareholder was not entitled to a tax credit are such as to alter the answers given to the other questions asked by the referring court.

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(1)  OJ C 38, 1.2.2016.

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