# C_2020010EN.01000301.xml

| 13.1.2020 | EN | Official Journal of the European Union | C 10/3 |
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13.1.2020

EN

Official Journal of the European Union

C 10/3

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Judgment of the Court (Second Chamber) of 13 November 2019 (request for a preliminary ruling from the Finanzgericht München — Germany) — College Pension Plan of British Columbia v Finanzamt München Abteilung III

(Case C-641/17) (1)

(Reference for a preliminary ruling - Free movement of capital - Taxation of pension funds - Difference in treatment between resident pension funds and non-resident pension funds - Legislation of a Member State allowing resident pension funds to reduce their taxable profits by deducting the reserves intended to pay for pensions and to set the tax levied on dividends off against corporation tax - Comparability of situations - Justification)

(2020/C 10/03)

Language of the case: German

Referring court

Finanzgericht München

Parties to the main proceedings

Applicant: College Pension Plan of British Columbia

Defendant: Finanzamt München Abteilung III

Operative part of the judgment

| 1. | Articles 63 and 65 TFEU must be interpreted as precluding national legislation under which dividends distributed by a resident company to a resident pension fund (i) are subject to a withholding tax which can be set off in its entirety against the corporation tax payable by such a fund, and give rise to a refund when the tax withheld at source exceeds the corporation tax due, and (ii) do not result in any increase in the profit liable to corporation tax or only a comparatively small one, due to the possibility of deducting from that profit provisions for pension commitments, whereas dividends paid to a non-resident pension fund are subject to a withholding tax which constitutes a definitive tax for such a fund, when the non-resident pension fund allocates dividends received to make provisions for pensions which it will have to pay in the future, this being a matter for the referring court to ascertain. |
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1.

Articles 63 and 65 TFEU must be interpreted as precluding national legislation under which dividends distributed by a resident company to a resident pension fund (i) are subject to a withholding tax which can be set off in its entirety against the corporation tax payable by such a fund, and give rise to a refund when the tax withheld at source exceeds the corporation tax due, and (ii) do not result in any increase in the profit liable to corporation tax or only a comparatively small one, due to the possibility of deducting from that profit provisions for pension commitments, whereas dividends paid to a non-resident pension fund are subject to a withholding tax which constitutes a definitive tax for such a fund, when the non-resident pension fund allocates dividends received to make provisions for pensions which it will have to pay in the future, this being a matter for the referring court to ascertain.

| 2. | Article 64(1) TFEU must be interpreted as meaning that national legislation, under which dividends distributed by a resident company to a resident pension fund (i) are subject to a withholding tax which can be set off in its entirety against the corporation tax payable by that fund, and give rise to a refund when the tax withheld at source exceeds the corporation tax due by the fund, and (ii) do not result in any increase in the profit liable to the corporation tax payable or only a comparatively small one, due to the possibility of deducting from that profit provisions for pension commitments, whereas dividends paid to a non-resident pension fund are subject to a withholding tax which constitutes a definitive tax for such a fund, cannot be considered to be a restriction existing on 31 December 1993 for the purposes of applying that provision. |
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2.

Article 64(1) TFEU must be interpreted as meaning that national legislation, under which dividends distributed by a resident company to a resident pension fund (i) are subject to a withholding tax which can be set off in its entirety against the corporation tax payable by that fund, and give rise to a refund when the tax withheld at source exceeds the corporation tax due by the fund, and (ii) do not result in any increase in the profit liable to the corporation tax payable or only a comparatively small one, due to the possibility of deducting from that profit provisions for pension commitments, whereas dividends paid to a non-resident pension fund are subject to a withholding tax which constitutes a definitive tax for such a fund, cannot be considered to be a restriction existing on 31 December 1993 for the purposes of applying that provision.

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(1)  OJ C 112, 26.3.2018.

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