Keywords

Summary



Keywords

1. Freedom of movement for persons – Freedom of establishment – Free movement of capital – Tax legislation – Corporation tax

(Art. 49 TFEU and 63 TFEU)

2. Union law – Direct effect – National taxes incompatible with Union law – Repayment – Refusal – Condition – Charge directly passed on to the purchaser

3. Free movement of capital – Restrictions – Tax legislation – Taxation of dividends

(Art. 63 TFEU)

Summary

1. It is contrary to Articles 49 TFEU and 63 TFEU for legislation of a Member State intended to eliminate economic double taxation of dividends to allow a parent company to set off against the advance payment, for which it is liable when it redistributes to its shareholders dividends paid by its subsidiaries, the tax credit applied to the distribution of those dividends if they originate from a subsidiary established in that Member State, but not to offer that option if those dividends originate from a subsidiary established in another Member State, since, in that case, that legislation does not give entitlement to a tax credit applied to the distribution of those dividends by that subsidiary.

(see para. 69, operative part 1)

2. When a national tax regime intended to eliminate double economic taxation of dividends does not of itself lead to the passing on to a third party of the tax unduly paid by the person liable for that tax, Union law precludes a Member State’s refusing to reimburse sums paid by a parent company on the grounds either that such reimbursement would lead to the unjust enrichment of the parent company, or that the sum paid by the parent company does not constitute an accounting or tax charge for it but is set off against the total of the sums which may be redistributed to its shareholders.

The only exception to the right to repayment of taxes levied in breach of EU law is in a case in which a charge that was not due has been directly passed on by the taxable person to the purchaser.

(see paras 74, 76, operative part 2)

3. The principles of equivalence and effectiveness do not preclude the reimbursement to a parent company of sums which ensure the application of the same tax regime to dividends distributed by its subsidiaries established in one Member State and those distributed by the subsidiaries of that company established in other Member States, and subsequently redistributed by that parent company, being subject to the condition that the person liable for the tax furnish evidence which is in its sole possession and relating, with respect to each dividend concerned, in particular to the rate of taxation actually applied and the amount of tax actually paid on profits made by subsidiaries established in other Member States, whereas, with respect to subsidiaries established in that Member State, that evidence, known to the administration, is not required. Production of that evidence may however be required only if it does not prove impossible in practice or excessively difficult to furnish evidence of payment of the tax by the subsidiaries established in the other Member States, in the light in particular of the provisions of the legislation of those Member States concerning the avoidance of double taxation, the recording of the corporation tax which must be paid and the retention of administrative documents. It is for the national court to determine whether those conditions are met.

(see para. 102, operative part 3)