Opinion of the Advocate General — ECLI:EU:C:2013:729
Date: 2013-11-07
Language of the case: German
Subject matter: Free movement of capital;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the observations submitted to the Court 73. The national court considers that the rule in Paragraph 36(2)(3)(f) of the EStG making set-off subject to the condition that the corresponding income be taken into account in the tax determination does not constitute a restriction, since it does not draw a distinction according to the origin of the income. If there were found to be a restriction, that could only be as a result of the combined effect of the rules on determination of tax and the rules on set-off of the tax. 74. The national court considers that the exemption regime enjoyed by foreign-sourced dividends, which, moreover, is in conformity with the requirements of Article 4(1) of Council Directive 90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States, (27) is always more advantageous than the set-off regime governing nationally-sourced dividends. 75. There could be unequal treatment as between nationally-sourced dividends and foreign-sourced dividends only where the foreign subsidiaries distribute dividends and the resident parent company records or carries forward losses. It doubts, however, that such a situation is incompatible with EU law. 76. The exemption regime for foreign-sourced dividends and the set-off regime applicable to nationally-sourced dividends, examined at the two stages of determination of tax and setting off of tax, are in fact equivalent, the former even presenting an advantage in relation to the second, inasmuch as it imposes no evidential obligation and therefore no procedural burden. 77. It is true that the national court acknowledges by reference to the Court’s case-law (28) that a tax rule to the detriment of foreign-sourced dividends constitutes a restriction even if its application may have advantageous effects in certain situations. However, it does not share KII’s view that a restriction is constituted by the mere fact that the exemption regime secures an advantage in terms of the procedure for determination of the amount of tax and results in a cash-flow disadvantage in terms of the procedure for setting off tax. 78. Since foreign-sourced dividends are exempt, they always escape the determination of the amount of tax and are thus always privileged. They cannot therefore be set off. Conversely, nationally-sourced dividends are always taken into account for the purposes of determining the amount of tax, but that is counterbalanced by the set-off of the corporation tax in respect of the dividends that has been paid by the distributing subsidiary against the tax paid by the recipient parent company; such set-off is total where the parent company immediately redistributes the dividends or partial where it does not do so. 79. Where the resident parent company makes losses, the payment of dividends by resident subsidiaries also generates a disadvantageous effect both at the stage of the procedure for determining the amount of tax and at the stage of the procedure for set-off of tax. At the stage of the procedure for determining the amount of tax, such payment offsets the losses, in whole or in part, and contributes to reducing or preventing losses from being carried back to previous years and forward to subsequent years. At the stage of the procedure for the set-off of tax, the reduction in losses carried back in respect of previous years reduces the refund of tax paid in the preceding years. 80. The cash-flow advantage under the set-off regime in the case of losses occurs only at the stage of the set-off procedure. At the stage of the procedure for determination of the tax, the tax payable by the parent company is reduced or nil, notwithstanding the dividends paid by the resident subsidiary. At the stage of the set-off procedure, the tax on dividends that has been paid by the subsidiary is set off against the parent company’s tax and can, consequently, result in a partial or total refund. 81. Those advantageous and disadvantageous effects from one tax year to the next are, however, only the logical consequence of the application of two different regimes. 82. KII essentially maintains in its written observations that the German tax legislation applicable to the dividends paid to a resident parent company constitutes a restriction on the free movement of capital, inasmuch as the regime for the exemption of foreign-sourced dividends is less advantageous than the set-off regime for nationally-sourced dividends where the resident parent company makes losses. 83. On the basis that a German parent company may, when it makes losses, obtain a refund, under the set-off mechanism, of the tax paid by its German subsidiary, KII seeks the same advantage, by receipt of a refund in Germany of corporation tax paid by its subsidiaries in their State of establishment. Where the parent company makes losses, it is contrary to the free movement of capital to exclude from set-off and refund corporation tax paid previously by foreign subsidiaries on dividends paid to the parent company. 84. KII states that the exemption regime and the set-off regime are equivalent only in so far as one does not take into account the taxation of its shareholders. If one takes into account the taxation of final shareholders, it is only in respect of nationally-sourced dividends that double taxation is avoided both in the hands of the parent company and in the hands of its shareholders. Referring to the judgment in Accor, (29) KII maintains in particular that in determining whether foreign-sourced dividends are treated in a manner equivalent to that of nationally-sourced dividends, the tax burden must be evaluated by taking into consideration the redistribution of the dividends received. 85. The Federal Republic of Germany and Finanzamt Leverkusen essentially consider that the set-off mechanism and the exemption mechanism, which are both intended to avoid economic double taxation, are globally equivalent, and that foreign-sourced dividends and nationally-sourced dividends are accorded equivalent treatment, there being a difference only in the detailed rules for implementation. They also maintain that, even on the supposition that the German legislation is considered to be restrictive, it is none the less justified by the need to ensure the coherence of the tax system, to maintain a balanced allocation of the power of taxation between the Member States and to prevent losses from being used twice. 86. Finally, the Commission considers that the situations of national subsidiaries and foreign subsidiaries are not comparable since foreign-sourced dividends are exempt from corporation tax in Germany under bilateral agreements, whereas nationally-sourced dividends are subject to corporation tax in Germany. The refund to the resident parent company of the corporation tax paid by the dividend-distributing resident subsidiary forms part of the mechanism for seeking to avoid or mitigate economic double taxation in regard to the parent company. Thus the different tax treatment of foreign-sourced dividends and nationally-sourced dividends is objectively justified by that difference in their situations. In any event it is justified by the overriding public-interest requirement to ensure coherence of the national tax system. 2. Analysis 87. It is settled case-law that, whilst direct taxation falls within the competence of the Member States, they must none the less exercise that competence consistently with EU law and, in particular, with the Treaty provisions on the free movement of capital. (30) 88. Thus, it is for each Member State to organise, in compliance with EU law, its system of taxation of dividends by defining the tax base and the tax rate which apply. (31) 89. The Court has also stated that, in the absence of unifying or harmonising measures of EU law, the Member States retain the power to define, unilaterally or by treaty, the criteria for allocating their powers of taxation, in particular with a view to eliminating double taxation. (32) They thus remain at liberty, in the framework of bilateral agreements concluded in order to prevent double taxation, to determine the connecting factors for the purposes of allocating their powers of taxation. (33) 90. None the less, although the Member States are at liberty to arrange their tax systems and, in particular, to select the mechanism by which they propose to prevent or mitigate the imposition of a series of charges to tax on, or the economic double taxation (34) of, dividends paid to a resident company, they must, however, when they make use of that power, comply with the requirements of EU law. (35) 91. Where a Member State establishes a system for preventing or mitigating the imposition of a series of charges to tax on, or economic double taxation of, dividends paid to resident companies by other resident companies, it must therefore, in conformity with Article 63 TFEU, grant equivalent treatment to dividends paid to resident companies by non-resident companies. (36) In particular, it cannot treat foreign-sourced dividends less advantageously than nationally-sourced dividends, unless that difference in treatment is justified by overriding reasons in the public interest or concerns situations which are not objectively comparable. (37) 92. The German tax legislation applicable to the dispute in the main proceedings must be examined in the light of those principles to see whether it restricts the free movement of capital and, if so, whether that restriction can be justified. a) Existence of a restriction 93. It is apparent from the order for reference that, pursuant to the various relevant bilateral agreements entered into by the Federal Republic of Germany with the Member States or third countries in which the various subsidiaries of KII at issue in the main proceedings are established, the dividends paid to KII by those subsidiaries are taxable in those States and exempt in Germany. 94. In that connection, it should be noted that this regime for exempting foreign-sourced dividends, which is a result both of double taxation agreements and of German domestic law, is in itself in compliance with the requirements of Article 4(1) of Council Directive 90/435. 95. Since the foreign-sourced dividends are exempt in Germany and do not form part of the recipient parent company’s basis of assessment, they are therefore not liable to be subject to the imposition of a series of charges to tax in the hands of the recipient parent company. As the Court has had occasion to point out, a system exempting distributed dividends by definition eliminates the risk of their being subject to a series of charges to tax. (38) 96. It follows that, from the point of view of the objective pursued by the German legislation, which is to avoid the imposition of a series of charges to tax on, or economic double taxation of, dividends paid to resident companies, the regime exempting foreign-sourced dividends is in itself perfectly legitimate inasmuch as it achieves an outcome equivalent to the set-off regime applicable to nationally-sourced dividends. Consequently, and in so far as foreign-sourced dividends are not in fact taxed, which it is for the national court to ascertain, Germany cannot be reproached for subjecting dividends paid to resident companies to different regimes depending on their origin. 97. From that perspective, KII’s argument derived from the judgment in Accor that the equivalence of the exemption regime and the set-off regime should be evaluated by taking into consideration the taxation of final shareholders must be rejected. 98. The taxation of KII in Germany is at issue in the dispute in the main proceedings, not that of its shareholders; thus, it is with the company itself, not its shareholders, that the dispute in the main proceedings began. (39) KII, moreover, states in its written observations that its direct shareholders reside in the United States without providing the slightest indication as to whether they may be liable to tax in Germany. 99. None the less, the disadvantage criticised by KII is not, as the Commission has rightly pointed out, the economic double taxation of foreign-sourced dividends but the difference of outcome, depending on whether the exemption regime or the set-off regime applies, that occurs in a situation where the parent company in receipt of dividends makes losses. 100. KII is, more specifically, complaining about the fact that, owing to the application of the exemption regime to foreign-sourced dividends, it is not in a position to benefit from the advantage procured by the set-off mechanism in the case of losses; that advantage is the refund of an amount corresponding to the corporation tax paid by the resident subsidiary on the distributed dividends. Consequently, it claims that the set-off regime should be applied to foreign-sourced dividends in order to enable it to obtain that refund. 101. It must be observed in that regard that the Court has only few details as to the basis on which and the conditions under which a resident company making losses or carrying forward losses may obtain, under the set-off regime applicable to nationally-sourced dividends, a refund of the corporation tax on the profits distributed by its resident subsidiary. 102. That stated, it is not contested that no such refund is payable under the exemption regime applicable to foreign-sourced dividends since, by virtue of being exempt, such dividends are by definition not included in the basis of assessment of the resident parent company. 103. Finanzamt Leverkusen and the Federal Republic of Germany, confirming the details provided in this connection by the national court, concede that where the resident parent company makes or carries forward losses, the exemption regime may entail a cash-flow disadvantage compared to the set-off regime, since in respect of the year in which the dividends are distributed application of the exemption regime may result in a greater tax burden. 104. None the less, they consider that a temporary cash-flow disadvantage only is involved, occurring only in the specific circumstance in which the parent company makes or carries forward losses greater than the dividends received, and this cannot call into question the equivalence of the two regimes. They add that that disadvantage is essentially limited by the fact that, unlike a set-off regime, an exemption regime entails no obligation to provide proof of the tax burden on the distributed dividends and thus involves the recipient parent company in no expenditure in connection with obtaining the exemption. 105. However, it is clear from the explanations provided to the Court that a resident parent company does seem to be in a more advantageous position when it receives nationally-sourced dividends than when it receives foreign-sourced dividends inasmuch as, when it makes or carries forward losses, it may obtain a refund of the tax on the dividends distributed by its resident subsidiary, at least when the dividends paid are not enough to offset the losses made. 106. The possibility cannot therefore be excluded that the differentiation thus established by the German legislation may be such as to deter resident companies from investing capital in companies established in other Member States or third countries, (40) and that it must therefore be classified as a restriction on the free movement of capital. 107. However, as the Court has consistently held, a restriction on the free movement of capital is prohibited only to the extent to which it cannot be justified under Article 64(1) TFEU or Article 65(1) TFEU or by overriding reasons in the public interest. b) Justifications 108. As is clear from the summary of the observations submitted to the Court, the national court, supported by Finanzamt Leverkusen, the Federal Republic of Germany and the Commission, considers that, if the German legislation is regarded as restrictive, it can none the less be justified by the need to ensure the coherence of the German tax system, to maintain the balanced allocation of the power of taxation between the Member States and to prevent losses from being used twice. 109. I for my part consider that, as EU law currently stands, and in the very specific circumstances of the case in the main proceedings which, when all is said and done, are entirely unprecedented, the claim put forward by KII cannot be upheld, even if on grounds which depart somewhat from the justifications traditionally accepted by the Court. 110. If the system of taxation of dividends in Germany, as resulting from double taxation agreements and provisions of German domestic law, were found to be incompatible with the Treaty provisions on the free movement of capital, and if that Member State were, as a consequence, obliged to refund to a resident company the tax on dividends that has been paid by its subsidiaries in the Member States and third countries in which they are established, not only the overall coherence of that system but also the allocation of the power of taxation between the Member States and between Member States and third countries would be seriously compromised. 111. In that regard, it should be borne in mind first of all that Germany, where KII is considered to be resident, and the various Member States and third countries in which its subsidiaries are established have perfectly legitimately agreed on the allocation of their respective powers of taxation, by entering into agreements designed in particular to eliminate the economic double taxation of dividends in accordance with the provisions of Directive 90/435, as noted by the national court, and with the guiding principles of international tax law. (41) 112. Those agreements provide for dividends to be taxed by the Member State or third country where they have their source, that is to say, the State of establishment of the subsidiaries distributing them, and, as a corollary, that they are to be exempt from tax in the Member State where they are distributed, that is to say, the State of residence of the recipient parent company. The agreements thus guarantee the right of Member States and of third countries to exercise their tax jurisdiction in relation to the activities carried out on their territory. (42) 113. Nor, moreover, is it alleged, as has been noted above, that the exemption regime fails to ensure that foreign-sourced dividends are not subject to a series of charges to tax. (43) 114. The fact remains, as I have stated, that the exemption regime for foreign-sourced dividends entails a disadvantage in relation to the set-off regime applicable to nationally-sourced dividends. This disadvantage, which may be described as inevitable, must none the less be placed in the very specific context in which it arises and which distinguishes the case in the main proceedings from all the cases which have hitherto come before the Court, whether those cases concern the tax treatment of dividends or the setting off of losses within groups of companies. (44) 115. First of all, the twofold regime for taxing the dividends at issue in the case in the main proceedings is the reverse of the regimes which have hitherto been before the Court. It is the foreign-sourced dividends which benefit from an exemption regime and the nationally-sourced dividends which are subject to a set-off regime. The fact that in this case foreign-sourced dividends escape all taxation in Germany radically alters the terms of the comparison to be made in order to determine whether the two regimes are equivalent. 116. Moreover, it must be borne in mind that the set-off regime at issue in the main proceedings includes a classic mechanism for offsetting losses of a parent company against the profits distributed by its subsidiary; this forms part of the further classic mechanism of setting off the corporation tax paid by the subsidiary against the corporation tax to be paid by the parent company with a view to avoiding the economic double taxation of dividends. The interplay of these two mechanisms constitutes, however, the specific nature of the present case and lends it its great complexity. 117. In this connection, it must be emphasised that it is not the losses of a non-resident subsidiary which are set off against the basis of assessment of a resident parent company, thus reducing the latter’s taxable profit. (45) Here, it is the losses of the resident parent company which, by being taken into account for tax purposes under a set-off mechanism, enable a refund to be obtained of the tax paid previously by its resident subsidiary on the dividends. 118. That is the context in which it is necessary to appraise the disadvantage affecting foreign-sourced dividends complained of by KII, which is the counterpart of the advantage enjoyed by nationally-sourced dividends. 119. The resident parent company is refunded the amount of tax on dividends which has been paid by its resident subsidiary when the dividends distributed by the subsidiary do not cover the parent company’s losses. The refund to the parent company is thus, as the Commission points out, directly linked to the taxation of the subsidiary, and occurs only as a result of such taxation. Where the aggregate constituted by the parent company and its subsidiary have made no profit on its territory, the Federal Republic of Germany thus foregoes its right, in its dual capacity as the Member State of residence of the parent company and subsidiary and the Member State in which the profits arise, (46) to levy any tax on the dividends. 120. The situation is quite different under the exemption regime. The dividends distributed to a resident parent company by the non-resident subsidiaries are not taxed in Germany, but in the States in which those subsidiaries are established, pursuant to double taxation agreements and in conformity with the guiding principles of international tax law. Accordingly, there can be no link between the prior taxation of the subsidiary and the later refund to the parent company. 121. Consequently, if Germany were required, in its capacity as the State of residence of the parent company, to refund to the latter the tax on dividends levied by the Member States or third countries in which its subsidiaries are established, acting in their capacity as the States in which the profits arise, that would break the symmetry that must exist between the right to tax profits and the possibility of deducting losses, (47) and would irremediably affect both the overall coherence of the system of taxation of dividends and the allocation of the power of taxation resulting from double taxation agreements entered into by the various Member States and third countries concerned. 3. Conclusion 122. It follows from the foregoing that the difference in treatment under German tax legislation between foreign-sourced dividends, which are exempt, and nationally-sourced dividends, which are subject to a set-off regime, is justified. That being so, there is no need to distinguish between dividends from subsidiaries and those from second-tier subsidiaries, which forms the subject-matter of the third question. Nor, a fortiori, (48) is there any reason to distinguish dividends originating in other Member States from those originating in third countries, which forms the subject-matter of the fourth question. 123. Accordingly, it is not necessary specifically to answer the third and fourth questions in terms differing from the answer to the second question. 124. Consequently, I propose that the Court should reply to the second, third and fourth questions by ruling that the Treaty provisions on the free of movement of capital must be interpreted as not precluding legislation of a Member State, such as that at issue in the main proceedings, which does not permit the setting off and refund of corporation tax paid by the subsidiaries and second-tier subsidiaries of a resident company which are established in other Member States, EEA States or third countries when that company makes losses, although such set-off is provided for in the case of resident subsidiaries and a refund may be made in the event of losses. VII – Conclusions 125. I therefore propose that the Court reply to the questions referred for a preliminary ruling by the Finanzgericht Köln as follows: (1) EU law must be interpreted as meaning that the compatibility of the legislation of a Member State on taxation of dividends which is applicable to any shareholding above 10% may be examined in the light of the free movement of capital where the shareholdings at issue enable the holder to exert a definite influence on the companies’ decisions and to determine their activities, in so far as that legislation does not seek to govern the conditions for access of companies from that Member State to the market in the other Member States or third countries or of companies from the other Member States and third countries to the market in the first mentioned Member State. (2) The Treaty provisions on the free movement of capital must be interpreted as not precluding legislation of a Member State, such as that at issue in the main proceedings, which does not permit the setting off and refund of corporation tax paid by the subsidiaries and second-tier subsidiaries of a resident company which are established in other Member States, States which are party to the Agreement on the European Economic Area or third countries when that company makes losses, although such set-off is provided for in the case of resident subsidiaries and a refund may be made in the event of losses. 1 – Original language: French. 2 – Legislation of which the Court has already had occasion to consider certain aspects; see Case C‑292/04 Meilicke and Others [2007] ECR I‑1835 and Case C‑262/09 Meilicke and Others [2011] ECR I‑5669. 3 – See Case C‑446/04 Test Claimants in the FII Group Litigation [2006] ECR I‑11753, ‘Test Claimants in the FII Group Litigation I’; order in Case C‑201/05 Test Claimants in the CFC and Dividend Group Litigation [2008] ECR I‑2875; judgment of 23 April 2009 in Case C‑406/07 Commission v Greece; and Case C‑35/11 Test Claimants in the FII Group Litigation [2012] ECR, ‘Test Claimants in the FII Group Litigation II’. 4 – See Joined Cases C‑436/08 and C‑437/08 Haribo Lakritzen Hans Riegel and Österreichische Salinen [2011] ECR I‑305. 5 – See, inter alia, Case C‑264/96 ICI [1998] ECR I‑4695; Joined Cases C‑397/98 and C‑410/98 Metallgesellschaft and Others [2001] ECR I‑1727; Case C‑446/03 Marks & Spencer [2005] ECR I‑10837; Case C‑414/06 Lidl Belgium [2008] ECR I‑3601; Haribo Lakritzen Hans Riegel and Österreichische Salinen; Case C‑18/11 Philips Electronics UK [2012] ECR; and Case C‑123/11 A [2013] ECR. 6 – ‘The KStG’. 7 – ‘The EStG’. 8 – ‘KII’. 9 – Paragraphs 88 to 104. 10 – It may be recalled that the Court pointed out in Opinion 1/94 [1994] ECR I‑5267, paragraph 81, that the objective of the chapter in the Treaty on freedom of establishment is to secure freedom of establishment solely for nationals, whether natural or legal persons, of the Member States. It contains no provision which extends its scope to situations external to the European Union. Freedom of establishment cannot therefore be relied on either in a context where a legal person in a third country has a holding which confers on it a determinative influence on the decisions and activities of company in a Member State (see, in particular, the order in Case C‑492/04 Lasertec [2007] ECR I‑3775, paragraphs 15 to 28) or in situations relating to the establishment of a company of a Member State in a third county (see, in particular, the order in Case C‑102/05 A and B [2007] ECR I‑3871, paragraphs 19 to 30). 11 – OJ 1994 L 1, p. 3, ‘the EEA Agreement’. 12 – Paragraphs 88 to 104. 13 – In that case, the fourth question referred for a preliminary ruling. See paragraphs 30 and 31 and 88 to 104. 14 – See paragraph 100. 15 – See paragraph 104 and paragraph 4 of the operative part. 16 – Sometimes the Court is content to state that the national legislation at issue concerns only ‘relations within a group of companies’ but the idea remains the same, namely that the legislation comes within freedom of establishment since, by its aim, it predominantly affects the latter. On that line of case-law, derived from Case C‑196/04 Cadbury Schweppes and Cadbury Schweppes Overseas [2006] ECR I‑7995, paragraph 32, and Test Claimants in the FII Group Litigation I, paragraph 118, see Case C‑524/04 Test Claimants in the Thin Cap Group Litigation [2007] ECR I‑2107 paragraph 33; Case C‑231/05 Oy AA [2007] ECR I‑6373 paragraph 23; and Case C‑284/06 Burda [2008] ECR I‑4571, paragraph 68. 17 – That is particularly the case in the context of actions for failure to fulfil obligations, for reasons specific to that form of action: see, in that connection, the judgment of 17 July 2008 in Case C‑207/07 Commission v Spain, paragraph 37; Commission v Greece, paragraph 22; Case C‑212/09 Commission v Portugal [2011] ECR I10889, paragraphs 41 to 45; and Case C‑387/11 Commission v Belgium [2012] ECR, paragraph 35. It may also be the case in the context of references for a preliminary ruling where the information available to the Court does not allow it to determine the size of the shareholding in question in the main proceedings; see, in that connection, Test Claimants in the FII Group Litigation I, paragraph 38; Case C‑374/04 Test Claimants in Class IV of the ACT Group Litigation [2006] ECR I‑11673, paragraph 40; and Case C‑310/09 Accor [2011] ECR I‑8115, paragraphs 30 to 38. 18 – Paragraph 96. 19 – Test Claimants in the Thin Cap Group Litigation, paragraphs 26 to 35 and 103 to 105; Lasertec, paragraph 27; A and B, paragraph 29; order of 6 November 2007 in Case C‑415/06 Stahlwerk Ergste Westig, paragraphs 18 and 19; and Case C‑31/11 Scheunemann [2012] ECR, paragraphs 33 and 34. 20 – Paragraph 81. 21 – See, inter alia, Lasertec, paragraphs 15 to 28. 22 – See, inter alia, A and B, paragraphs 19 to 30. 23 – See inter alia, a contrario, Case 81/87 Daily Mail and General Trust [1988] ECR 5483, paragraph 16; Case C‑212/97 Centros [1999] ECR I‑1459, paragraph 17; Case C‑208/00 Überseering [2002] ECR I‑9919, paragraphs 56 and 57; Case C‑210/06 Cartesio [2008] ECR I‑9641, paragraph 110; and Case C‑186/12 Impacto Azul [2013] ECR, paragraph 32. 24 – Test Claimants in the FII Group Litigation, paragraph 98. See also Case C‑168/11 Beker and Beker [2013] ECR, paragraph 30. 25 – Case C‑452/04 [2006] ECR I‑9521. 26 – Paragraphs 46 and 48. 27 – OJ 1990 L 225 p. 6. 28 – Case C‑141/99 AMID [2000] ECR I‑11619, paragraph 27, and Case C‑182/06 Lakebrink and Peters-Lakebrink [2007] ECR I‑6705. 29 – Paragraph 45 et seq. 30 – See, inter alia, Case C‑80/94 Wielockx [1995] ECR I‑2493, paragraph 16; Case C‑35/98 Verkooijen [2000] ECR I‑4071, paragraph 32; and Case C‑315/02 Lenz [2004] ECR I‑7063, paragraph 19. 31 – See Test Claimants in Class IV of the ACT Group Litigation, paragraph 50; Test Claimants in the FII Group Litigation I, paragraph 47; Case C‑194/06 Orange European Smallcap Fund [2008] ECR I‑3747, paragraph 30; and C‑128/08 Damseaux [2009] ECR I‑6823, paragraph 25. 32 – Case C‑336/96 Gilly [1998] ECR I‑2793, paragraphs 24 and 30; Case C‑307/97 Saint-Gobain ZN [1999] ECR I‑6161, paragraph 57; and Damseaux, paragraph 30. 33 – See, inter alia, Gilly, paragraphs 24 and 30; Saint-Gobain ZN, paragraph 57; and Case C‑170/05 Denkavit Internationaal and Denkavit France [2006] ECR I‑11949, paragraphs 43 and 44. 34 – Legal double taxation, it should be recalled, relates to the situation in which the same taxpayer is subject to double taxation on the same income, while economic double taxation refers to the situation in which different taxpayers are respectively subject to taxation on the same income. See, on this, the tax glossary of the International Bureau of Fiscal Documentation (IBFD); see also the Communication from the Commission of 19 December 2003, Dividend taxation of individuals in the Internal Market (COM(2003) 810 final); the Opinion of Advocate General Geelhoed in Test Claimants in the FII Group Litigation I, point 2 et seq.; and the Communication from the Commission of 11 November 2011, Double Taxation in the Single Market (COM(2011) 712 final). 35 – See Test Claimants in the FII Group Litigation I, paragraph 45, and Accor, paragraph 43. 36 – See Test Claimants in the FII Group Litigation I, paragraph 72, and Haribo Lakritzen Hans Riegel and Österreichische Salinen, paragraph 156. 37 – See, inter alia, Test Claimants in the FII Group Litigation I, paragraphs 45 and 46 and the case law cited. See also Accor, paragraph 44. 38 – See Test Claimants in the FII Group Litigation I, paragraph 63, and Haribo Lakritzen Hans Riegeland Österreichische Salinen, paragraph 158. 39 – It indeed follows, logically, that neither the national court nor the various parties having presented written and/or oral argument to the Court, with the exception of KII, refer to the legal double taxation affecting foreign-sourced dividends mentioned by KII. 40 – See, inter alia, Case C‑370/05 Festersen [2007] ECR I‑1129, paragraph 24, and Haribo Lakritzen Hans Riegel and Österreichische Salinen, paragraphs 50 and 80. 41 – See, in this connection, inter alia, OECD, Addressing Base Erosion and Profit Shifting, 2013 p. 37. 42 – See, to that effect, Cadbury Schweppes and Cadbury SchweppesOverseas, paragraph 56; Test Claimants in the Thin Cap Group Litigation, paragraph 75; Case C‑182/08 Glaxo Wellcome [2009] ECR I‑8591, paragraph 82; Case C‑284/09 Commission v Germany [2011] ECR I‑9879 paragraph 77; and Case C‑371/10 National Grid Indus [2011] ECR I‑12273, paragraph 46. 43 – That is an essential difference from the situation which the Court had to deal with in the case which gave rise to the judgment in Haribo Lakritzen Hans Riegel and Österreichische Salinen, paragraphs 158 and 163. 44 – See, in that regard, the Communication from the Commission to the Council, the European Parliament and the Economic and Social Committee of 19 December 2006, Tax Treatment of Losses in Cross-Border Situations (COM(2006) 824 final). 45 – See, inter alia, Case C‑446/03 Marks & Spencer [2005] ECR I‑10837; A; Lidl Belgium; and Haribo Lakritzen Hans Riegel andÖsterreichische Salinen. 46 – On that distinction, see Test Claimants in Class IV of the ACT Group Litigation, paragraphs 56 to 66. 47 – See Lidl Belgium, paragraph 33; National Grid Indus, paragraph 58; and Philips Electronics UK, paragraph 24. 48 – On the difference between the intra-Community and extra-Community aspects of the free movement of capital, see Test Claimants in the FII Group Litigation I, paragraph 170; A, paragraph 60 et seq.; Orange European Smallcap Fund, paragraphs 89 and 90; Test Claimants in the CFC and Dividend Group Litigation, paragraph 92; and Joined Cases C‑439/07 and C‑499/07 KBC Bank and Beleggen, Risicokapitaal, Beheer [2009] ECR I‑4409, paragraphs 71 and 72.