Case C‑448/15

Belgische Staat

v

Wereldhave Belgium Comm. VA and Others

(Reference for a preliminary ruling from the hof van beroep te Brussel)

(Reference for a preliminary ruling — Parent companies and subsidiaries established in different Member States — Common system of taxation applicable — Corporation tax — Directive 90/435/EEC — Scope — Article 2(c) — Company subject to tax without the possibility of an option or of being exempt — Taxation at a zero rate)

Summary — Judgment of the Court (Fifth Chamber), 8 March 2017

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 profits distributed to the parent company — Levying of advance tax on investment income in respect of dividends paid by the subsidiary to an investment institution established in another Member State where it is subject to taxation at a zero rate under certain conditions — Lawfulness — Condition — Investment institution which does not have the status of a company of a Member State

(Council Directive 90/435, Arts 2(c) and 5(1))

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 must be construed to the effect that Article 5(1) does not preclude legislation of a Member State whereby an advance tax on investment income is levied on dividends paid by a subsidiary established in that Member State to a fiscal investment institution established in another Member State which is subject to corporation tax at a zero rate, provided that all of its profits are paid to its shareholders, since such an institution does not constitute a ‘company of a Member State’ for the purposes of that directive.

It must be pointed out in that regard that Article 2(c) of Directive 90/435 lays down a positive criterion for qualifying, that is to say, being subject to the tax in question, and a negative criterion, that is to say, not being exempt from that tax and not having the possibility of an option. The establishment of both those criteria, one positive, the other negative, leads to the conclusion that the condition laid down in Article 2(c) of the directive does not merely require that a company should fall within the scope of the tax in question, but also seeks to exclude situations involving the possibility that, despite being subject to that tax, the company is not actually liable to pay that tax. Although, formally, a company which is subject to tax at a zero rate, provided that all of its profits are paid to its shareholders, is not exempt from that tax, it is, in practical terms, in the same situation as the one which Article 2(c) of Directive 90/435 seeks to exclude, that is to say, a situation in which it is not liable to pay that tax. As the Advocate General made clear in points 43 and 44 of his Opinion, the inclusion in national legislation of a provision whereby a specific category of companies may, in certain circumstances, be entitled to be taxed at a zero rate is tantamount to not subjecting those companies to that tax (see also judgment of 20 May 2008, Orange European Smallcap Fund, C‑194/06, EU:C:2008:289, paragraphs 33 and 34).

(see paragraphs 31-34, 43 and operative part)