Opinion of the Advocate General — ECLI:EU:C:2011:12
Date: 2011-01-13
Language of the case: German
Subject matter: Free movement of capital
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the Judgment 1. Free movement of capital – Restrictions – Tax legislation – Income tax – Taxation of dividends – Calculation of the tax credit granted to a taxable person fully taxable in a Member State for dividends paid by a capital company established in another Member State (Arts 56 EC and 58 EC) 2. Free movement of capital – Restrictions – Tax legislation – Income tax – Taxation of dividends – Evidence to be adduced by a taxable person fully taxable in a Member State in order to obtain a tax credit for dividends paid by a capital company established in another Member State (Arts 56 EC and 58 EC) 3. Free movement of capital – Restrictions – Tax legislation – Income tax – Taxation in a Member State of dividends paid by a capital company established in another Member State 1. For the calculation of the amount of the tax credit to which a shareholder fully taxable in a Member State with regard to dividends paid by a capital company established in another Member State is entitled, Articles 56 EC and 58 EC preclude the application, failing the adducing of the evidence required under the legislation of the first Member State, of a national provision under which corporation tax imposed on dividends of foreign origin is set off against a shareholder’s income tax to the level of the fraction of corporation tax imposed on gross dividends distributed by companies in the first Member State. 2. The calculation of the tax credit must be made in relation to the rate of corporation tax on the distributed profits applicable to the dividend‑paying company according to the law of the Member State of establishment; the amount to be imposed may not, however, exceed the amount of the income tax to be paid on dividends received by the recipient shareholder in the Member State in which that shareholder is fully taxable. When a Member State has a system for preventing or mitigating a series of charges to tax or economic double taxation for dividends paid to residents by resident companies, it must treat dividends paid to residents by non-resident companies in the same way. That implies that in such a situation such a national system must be transposed, to the fullest extent possible, to cross-border situations. (see paras 29, 31, 34, operative part 1) 3. As regards the degree of detail which the evidence required must meet in order to benefit from a tax credit relating to dividends paid by a capital company established in a Member State other than that in which beneficiary is fully taxable, Articles 56 EC and 58 EC preclude the application of a national provision under which the degree of detail and the form of evidence to be adduced by such a shareholder must be the same as those required when the dividend-paying company is established in the Member State of taxation of that shareholder. 4. The tax authorities of the Member State of taxation are entitled to require that shareholder to provide documentary evidence enabling them to ascertain, clearly and precisely, whether the conditions for obtaining a tax credit under national legislation have been met without having to make an estimate of that tax credit. National rules which would unconditionally prevent shareholders having invested abroad from adducing evidence which satisfies criteria, in particular those of presentation, other than those laid down for national investments, would not only breach the principle of sound administration, but in particular go beyond what is necessary to attain the objective of effective fiscal supervision. (see paras 43, 53, operative part 2) 5. The principle of effectiveness precludes amended national legislation which, retroactively and without any transitional period, does not permit the offsetting of foreign corporation tax imposed on dividends paid by a capital company established in another Member State by submitting either a certificate relating to that tax in accordance with the legislation of the Member State in which the shareholder is fully taxable, or documentary evidence allowing the tax authorities of that Member State to determine, clearly and precisely, whether the conditions for obtaining that tax advantage have been met. It is for the referring court to determine a reasonable period for the submission of such a certificate or documentary evidence. As regards the restitution of national taxes unduly levied, if the rules for restitution are amended by national law with retroactive effect, the principle of effectiveness requires new legislation to include transitional arrangements allowing an adequate period after the enactment of the legislation for lodging the claims for repayment which persons were entitled to submit under the earlier legislation. (see paras 57, 59, operative part 3)