Opinion of the Advocate General — ECLI:EU:C:2000:90
Date: 2000-02-17
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Portugal

Summary of the Judgment 
Approximation of laws — Common system of taxation applicable in the case of parent 
companies and subsidiaries of different Member States — Directive 90/435 — Exemption, 
in the Member State of the subsidiary, from withholding tax on the profits distributed to 
the parent company — Derogation in favour of Portugal — Scope 
(Council Directive 90/435, Art. 5(1) and (4)) 
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SUMMARY — CASE C-375/98 
Article 5(4) of Directive 90/435 on the 
common system of taxation applicable in 
the case of parent companies and subsidi­
aries of different Member States, in so far 
as it limits to 15% and 10% the amount of 
the withholding tax on profits distributed 
by subsidiaries established in Portugal to 
their parent companies in other Member 
States, must be interpreted as meaning that 
that derogation relates not only to corpora­
tion tax but also to any taxation, of 
whatever nature or however described, 
which takes the form of a withholding tax 
on dividends distributed by such subsidi­
aries. 
The objective of the Directive, which is to 
encourage cooperation between companies 
in several Member States, would be under­
mined if the Member States were permitted 
deliberately to deprive companies in other 
Member States of the benefit of the Direc­
tive by subjecting them to taxes having the 
same effect as a tax on income, even if the 
name given to the latter places them in 
another category, such as that of a tax on 
assets. 
(see paras 24, 27 and operative part) 
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