Opinion of the Advocate General — ECLI:EU:C:2019:680
Date: 2019-09-05
Language of the case: French
Subject matter: Taxation;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Belgium

Request for a preliminary ruling from the Tribunal de première instance francophone de Bruxelles (Belgium) lodged on 13 June 2018 — Brussels Securities SA v Belgian State (Case C-389/18) Language of the case: French Referring court Tribunal de première instance francophone de Bruxelles Parties to the main proceedings Applicant: Brussels Securities SA Defendant: Belgian State Question referred Must Article 4 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 1 (replaced, as from 18 January 2012, by Council Directive 2011/96/EU of November on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States 2 ), combined with other sources of Community law, be interpreted as precluding that regulations of a national authority, such as the 1992 Income Tax Code and the Royal Decree implementing the 1992 Income Tax Code, in the versions applicable in respect of tax year 2011, having opted for a system of exemption (refraining from taxing the distributed profits received by a parent company by virtue of its association with its subsidiary) under which, first, the dividend distributed by the subsidiary is included in the basis of assessment of the parent company and, secondly, 95% of that dividend is deducted from that basis of assessment as definitively taxed income, by reason of the combined application, in order to determine the basis for assessing the corporation tax of the parent company, of that Belgian system of deducting definitively taxed income and of (1) rules relating to another deduction constituting a tax advantage provided for by those regulations (deduction for risk capital), (2) entitlement to deduct the balance of previous recoverable losses, (3) entitlement to carry forward to following tax years, where the relevant amount in respect of a tax year is higher than that of the taxable profits, imputation of the surplus definitively taxed income, of the deduction for risk capital and of the balance of the previous recoverable losses, and (4) the imputation order stipulating that, during those following tax years, imputation must cover, until the taxable profits are used up, first, the definitively taxed income carried forward, then the deduction for risk capital carried forward (which may only be carried forward for the ‘following seven tax periods’), and then the balance of the previous recoverable losses, lead to the reduction, in respect of part or all of the amounts of the dividends received from the subsidiary, of the losses that the parent company would have been able to deduct if the dividends had been simply excluded from the profits for the tax year during which they were received (with the effect of reducing the taxable result for that tax year and increasing, where appropriate, the tax losses that may be carried forward) rather than being retained within those profits and subsequently coming under rules for exemption and for carrying forward the exempt amount where there are insufficient profits, that is to say, reduction of the balance of the parent company’s previous recoverable losses that may occur during tax years following a tax year in respect of which the definitively taxed income, the deduction for risk capital and the balance of the previous recoverable losses exceed the amount of the taxable profits? ____________ 1 OJ 1990 L 225, p. 6. 2 OJ 2011 L 345, p. 8.