Judgment — ECLI:EU:C:2024:932
Date: 2024-11-07
Language of the case: Dutch
Court formation: First Chamber
Subject matter: Free movement of capital
Procedure: Reference for a preliminary ruling
Origin: Netherlands

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
23 December 2022 
Referring court:  
Gerechtshof ’s-Hertogenbosch (Netherlands) 
Date of the decision to refer:  
14 December 2022 
Appellant:  
XX 
Respondent:  
Inspecteur van de Belastingdienst  
  
Subject matter of the main proceedings 
The appellant seeks a refund of the dividend tax that it paid on Netherlands 
dividends it received. 
Subject matter and legal basis of the request 
The request for a preliminary ruling made to the Court of Justice of the European 
Union (‘the Court’) under Article 267 TFEU concerns the question whether the 
appellant is entitled, under EU law, to a refund of dividend tax on the ground that 
it should not be taxed more heavily than a comparable resident taxpayer subject to 
corporate income tax. A resident taxpayer may offset the dividend tax against that 
corporate income tax, but for the appellant this is a final tax. 
Question referred for a preliminary ruling 
Does Article 63(1) TFEU preclude legislation such as that at issue, according to 
which dividends paid by listed and unlisted companies established in the 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-782/22 
 
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Netherlands to a company established in another Member State that has invested, 
inter alia, in shares in those listed and unlisted companies to cover future payment 
obligations are subject to withholding tax at the rate of 15% on the gross amount 
of those dividend payments, whereas the tax burden on dividend payments to a 
company established in the Netherlands in otherwise similar circumstances would 
be nil, because the calculation of the basis of assessment for the tax on profits to 
which that company would be subject takes into account the costs that are 
incurred as a result of an increase in the future payment obligations of the 
company, which increase corresponds almost entirely to a (positive) change in the 
value of the investments, even though the receipt of dividends does not as such 
lead to a change in the value of those obligations? 
Provisions of European Union law relied on 
Article 63(1) TFEU 
Provisions of national law relied on 
Wet op de dividendbelasting 1965 (Netherlands Law on the taxation of dividends 
1965) 
Wet op de vennootschapsbelasting 1969 (Netherlands Law on corporate income 
tax 1969) 
Succinct presentation of the facts and procedure in the main proceedings 
1 The appellant is a company established in the United Kingdom. It concludes 
contracts with almost exclusively large institutional pension insurers from the 
United Kingdom for the investment of premium amounts. From 2003 to 2010, the 
appellant invested in shares of companies established in the Netherlands. On the 
dividends distributed, it paid 15% dividend tax in the Netherlands. It is claiming 
that tax back. The appeal lodged to that end before the Rechtbank Zeeland-West-
Brabant (District Court, Zeeland-West-Brabant, Netherlands) against the 
respondent, the Inspecteur van de Belastingdienst (inspector of the Tax and 
Customs Administration), was dismissed, after which the interested party lodged 
an appeal before the Gerechtshof ’s-Hertogenbosch (Court of Appeal, ’s-
Hertogenbosch, Netherlands). 
2 The appellant’s contracts with the pension insurers are referred to as unit-linked 
policies. That term refers to the practice of allocating deposited premiums to 
separate units, in which certain types of investment are grouped together. The 
higher the return on the units, the more customers receive. The distribution is 
therefore not linked to the individual securities in which investments are made, 
but to the units. They therefore have an administrative purpose. They are used to 
determine changes in the value of the investments allocated to the units without 
XX 
 
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the insurers having any rights to the securities in those units. Although agreements 
are made on the risk profile, the insurers cannot influence the actual choice of the 
securities which are the subject of the investment. For its activities, the appellant 
receives a fixed fee, corresponding to a percentage of the value of the amounts 
deposited. 
3 Since the distributions are linked to the units and not to the individual securities, 
the individual dividends do not determine the appellant’s obligations. The manner 
in which the appellant draws up its annual accounts also means that an increase in 
dividends received is not directly linked to higher obligations. It assesses its 
investments in its financial statements on the basis of the fair value. The profits of 
companies in which those investments are made increase that fair value and are 
thus entered directly on the appellant’s balance sheet. The dividends arising from 
the profits referred to therefore no longer affect the appellant’s balance sheet 
result. The increasing obligations on customers as a result of a higher investment 
return are reflected in the balance sheet by the corresponding increase in the fair 
value. 
The essential arguments of the parties in the main proceedings 
4 According to the appellant, due to the Netherlands dividend tax levied on 
dividends received in the Netherlands, it pays more tax than a comparable 
taxpayer established in the Netherlands. Such a resident taxpayer pays corporate 
income tax and can offset the dividend tax against that tax. In doing so, costs and 
obligations may be deducted. The appellant takes the view that, had it been a 
Netherlands taxpayer, it would not have paid tax, because a higher investment 
return – and therefore a higher dividend tax – results in higher distribution 
obligations and therefore higher deductions. This difference between resident and 
non-resident taxpayers is contrary to the free movement of capital enshrined in 
Article 63(1) TFEU. It therefore seeks a refund of the dividend tax paid. The 
appellant relies in that regard on the judgments of the Court of 8 November 2012, 
Commission v Finland, C-342/10, EU:C:2012:688 (‘the Commission v Finland 
judgment’), and of 13 November 2019, College Pension Plan of British Columbia, 
C-641/17, EU:C:2019:960 (‘the CPPB judgment’), discussed in detail in 
paragraph 10 below. 
5 The respondent disputes that the appellant’s tax burden is higher than that of 
Netherlands undertakings. He considers that the increase in the appellant’s 
obligations should not be taken into account because the payments made by the 
appellant under the unit-linked policies are not expenses directly linked to the 
dividends received. The respondent refers, inter alia, to the judgment of the Court 
of 17 September 2015, C-10/14, C-14/14 and C-17/14, Miljoen and Others, 
EU:C:2015:608 (like in the order for reference, also referred to as the Société 
Générale judgment), explained in more detail in paragraph 9 below. According to 
the inspector, the CPPB judgment is irrelevant since it concerns a pension insurer, 
whereas the appellant offers investment services. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-782/22 
 
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Succinct presentation of the reasoning in the request for a preliminary ruling 
6 The referring court states at the outset that the appellant would also have paid 
dividend tax if it had been established in the Netherlands. Resident taxpayers, 
however, may offset that tax against corporate income tax. Residents pay that tax 
on their dividend income and other income, with the costs incurred being 
deductible. 
7 According to the settled case-law of the Court, this difference in treatment 
between resident and non-resident taxpayers is not necessarily contrary to the 
right to free movement of capital, provided that objective differences between 
taxpayers are such as to constitute justification in that regard. The referring court 
will therefore need to determine whether there are objective reasons for not 
allowing the appellant to deduct, in the event of higher returns, the 
correspondingly increasing obligations to pay out distributions, whereas 
Netherlands companies may deduct those liabilities as costs incurred. 
8 The referring court sets out in detail the case-law of the Court relevant in that 
regard. The starting principle is that, where residents are taxed on a net basis, that 
is to say, after deduction of costs, expenses directly linked to dividends or other 
income must be taken into account also in the case of non-resident taxpayers. The 
question in that regard is whether expenses are inextricably linked to the activity 
which generated the taxable income (judgment of 31 March 2011, Schröder, 
C-450/09, EU:C:2011:198, paragraph 43). The nature of that income is irrelevant 
(judgment of 24 February 2015, Grünewald, C-559/13, EU:C:2015:109, 
paragraph 35; ‘the Grünewald judgment’). 
9 Initially, the Court held, in the Société Générale case, in which tax was levied on a 
dividend payment, that costs directly linked to dividend income are limited to 
costs linked to the receipt of dividends (Société Générale judgment, 
paragraph 58). In subsequent judgments, the Court abandoned this restrictive 
approach. The referring court cites, inter alia, the judgment of 22 November 2018, 
Sofina, C-575/17, EU:C:2018:943; the judgment of 2 June 2016, Pensioenfonds 
Metaal en Techniek, C-252/14, EU:C:2016:402, and the Grünewald judgment. 
Apart from the Grünewald judgment, those cases always concerned investment 
interests. Those judgments showed, among other things, that losses or debts may 
be taken into account. 
10 According to the referring court, the judgments in Commission v Finland and in 
CPPB are particularly relevant. Both cases concerned pension insurers which 
added income from investment activities (including dividends) to pension 
provisions to be invested in order to meet future pension obligations. According to 
the Court, non-residents were entitled to regard them as costs incurred. In the first 
case, the national legislation already provided for that for residents, but, according 
to the Court, in the second case, too, no taxable enrichment occurred if dividends 
were reinvested in order to meet future pension obligations. 
XX 
 
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11 In the present case, the appellant invests in Netherlands shares to cover 
obligations under the unit-linked policies. Higher investment income leads to a 
corresponding increase in obligations. However, as a consequence of the 
appellant’s accounting method described in paragraph 3 above, consisting of 
assessing investments in its annual accounts on the basis of the fair value, the 
dividend realised and the distribution obligations are not directly linked to each 
other. 
12 In this context, the question that needs to be answered is whether it is necessary to 
take into account, for the purposes of levying dividend tax, the costs generated by 
the increase in the appellant’s obligations towards its customers. According to the 
referring court, the answer should be in the negative if the Société Générale 
judgment is followed, as the respondent suggests. The argument in favour of this 
is the fact that the appellant engages exclusively in investments and that therefore 
only costs incurred for that purpose (costs of collecting dividends) need to be 
taken into account. 
13 The much broader approach adopted by the Court in the aforementioned 
subsequent judgments – which, according to the appellant, should also be 
followed in the present case –militates against such a negative response. In the 
Grünewald judgment, the Court also explained that the nature of the income is 
irrelevant (cf. paragraph 8 above). On that basis, it could be stated that the 
appellant’s investments are equivalent to the pension insurance activities in the 
CPPB judgment. In any event, there are important similarities between them. In 
both cases, the investments are intended to cover future obligations, but a pension 
insurer runs an insurance risk whereas the appellant does not, since it engages 
exclusively in investment. In the event of a lower return, it would only have fewer 
obligations. However, the economic relationship between the value of investments 
and the value of obligations towards insured persons or customers is essentially 
the same. 
14 According to the referring court, it therefore seems most appropriate to assess the 
comparability of the appellant’s situation with that of resident taxpayers on the 
basis of the CPPB judgment and not on the basis of the Société Générale 
judgment. Whether that is correct, however, cannot be ascertained with sufficient 
certainty from the existing case-law. This is mainly due to the appellant’s 
accounting assessment of investments on the basis of the fair value, which raises 
doubts as to whether there is indeed a link between dividends and obligations. In 
the Court’s view, it is unclear how strict this relationship should be. Moreover, it 
is not known how the shares were valued in the CPPB case. Accordingly, the 
referring court has addressed the above request for a preliminary ruling to the 
Court.