WRITTEN QUESTION E-1586/00 by Karl von Wogau (PPE-DE) to the Commission. Taxation of dividends paid by public limited companies.
Date: 2000-05-19
Institutions: European Parliament, Provisional data
Subjects: European tax cooperation, administrative formalities, competence of the Member States, public limited company, share, tax on profits of self-employment

20.2.2001

EN

Official Journal of the European Communities

C 53 E/167

rules, in case of liability insurance, the insurer covering the civil liability risk may also be sued in the court
where the injured party has brought proceedings against the insured party, when the law of that country
permits it (article 10, 1).

In the case mentioned by the Honourable Member, the Convention would permit proceedings to be
brought either in the United Kingdom or in France.

(2001/C 53 E/217)

WRITTEN QUESTION E-1586/00

by Karl von Wogau (PPE-DE) to the Commission

(19 May 2000)

Subject: Taxation of dividends paid by public limited companies

Is the Commission aware of the bureaucratic hoops which holders of shares in companies established in
other Member States have to jump through so that their tax liability may be correctly calculated?

What relief measures can the Commission propose to alleviate this situation?

I refer in particular to the case of the small shareholders and employee shareholders of the Aventis
company who went along with the advice of the Board of Directors of H(cid:246)chst AG and swapped their
H(cid:246)chst AG shares for shares in Aventis, a company which has its registered office in Strasbourg, France.
The assessment of tax liability involves the shareholder, the depositary bank, the tax office in the
shareholder(cid:146)s place of residence, the dividend-paying office (Strasbourg) and the French tax authorities
(Paris). The shareholder collects the quintuplicate application form (RF 1A) from the Federal Finance Office
or the depositary bank. He fills it in and sends all five copies to the appropriate tax office in his place of
residence. That office confirms that the shareholder is resident in Germany and keeps the top copy. The
other four copies are returned to the shareholder. Copies 2-5 are then sent to the dividend-paying office.
That office confirms the shareholder(cid:146)s personal details and pays the dividend without deducting with-
holding tax and sends copy 2 to the French tax authorities on account of the tax credit. Copies 3-5 are
returned to the shareholder, who retains copy 3 and sends copies 4 and 5 to the German tax authorities.
They keep copy 4. Copy 5 is sent via the Federal Finance Office to the French tax authorities so as to
ensure that the tax credit is reimbursed to the German tax authorities (see Annex).

Answer given by Mr Bolkestein on behalf of the Commission

(6 July 2000)

Article 293 (formerly Article 220) of the EC Treaty requires the Member States, so far as is necessary, to
enter into negotiations with each other with a view to securing for the benefit of their nationals the
abolition of double taxation within the Community. Since no multilateral convention on the dividends of
public limited companies has been concluded under this Article, that objective is pursued by the Member
States through bilateral agreements. France and Germany concluded such an agreement on 21 July 1959,
subsequently amending it by agreements signed on 9 June 1969 and 28 September 1989.

Articles 9 and 20 of the latest version of the agreement not only grant German residents exemption from
French withholding tax on dividends paid by companies established in France, but entitle them to the same
tax credit as French residents when dividends are distributed.

The Commission cannot but be pleased that France and Germany should have been able, by means,
including the introduction of compensation payments between the two Member States, to achieve such a
result, so eliminating all forms of double taxation for German residents receiving dividends from France.

C 53 E/168

Official Journal of the European Communities

EN

20.2.2001

The Commission would, however, draw the Honourable Member(cid:146)s attention to the fact that the procedures
for the administration of the bilateral agreement are a matter for the two Member States concerned. The
Commission understands that small shareholders and employee shareholders of what was Hoechst AG
might be bothered by the changes in procedures for the payment of dividends since the company(cid:146)s merger
with the new Strasbourg-based Aventis. However, there is nothing in the information provided by the
Honourable Member to lead the Commission to conclude that Community law has been violated. That
being so, the Commission considers the Member States concerned are the best judges of whether the
current system needs to be simplified.

(2001/C 53 E/218)

WRITTEN QUESTION E-1589/00

by Martin Callanan (PPE-DE) to the Commission

(19 May 2000)

Subject: Competition

Would the Commission agree that Subsection #4, Article 38, The Principle of Unity of Exploitation of the
Tourism Planning Law for the Canaries, is clearly anti-competitive in view of the following:

1.

2.

In the establishments providing accommodation, the undertaking of tourist activity must be carried
out in accordance with the Principle of Unity of Exploitation.

For the purposes of this Law, the term Unity of Exploitation will be understood as the need to accept
one single nominative company per complex as far as tourist exploitation is concerned.

(The law, in effect prohibits individual owners from determining the cost of renting their accommodation
and, furthermore, penalises those owners who wish to use the property for personal use).

Answer given by Mr Monti on behalf of the Commission

(20 June 2000)

The Honourable Member refers to a piece of the Canary Islands legislation; the Commission understands
that the law in question is that of 6 April 1995, No 7/1995, concerning some rules for tourism services in
the Canaries. The Honourable Member asks whether the Commission agrees that a particular provision is
clearly anti-competitive. This provision requires, in substance, that there is one management and some
common standards for renting out to tourists the apartments in one complex. The purpose appears to be
to ensure the good quality of the service to the tourists. The pricing, however, as well as other such
commercial aspects seem to remain outside the scope of co-ordination.

The Community competition rules (Articles 81 and 82 (ex Articles 85 and 86) of the EC Treaty) concern
the elimination of agreements between undertakings which restrict competition (e.g. price-fixing agree-
ments between competitors) and of abuses of a dominant position. The application of Article 10
(ex Article 5) or, in case of public undertakings and undertakings with exclusive rights, of Article 86
(ex Article 90) of the EC Treaty, in combination with one of the former articles, allows the Commission to
intervene even in cases where a Member State imposes or encourages such behaviour. It however needs
to be remembered that the Community competition rules can be applicable only if the alleged restriction
is capable of producing an appreciable effect on trade between Member States.

While the Commission is willing to examine any complaint brought to its attention, it is unable, in the
absence of any further detail, to share the view of the Honourable Member that the provision referred to is
clearly contrary to the Community competition rules. It rather seems, on the basis of the information
available, that the law is not liable to induce any anti-competitive behaviour that would constitute a
violation of the Community competition rules.