Case C-201/05: Order of the Court (Fourth Chamber) of 23 April 2008 (reference for a preliminary ruling from the Chancery Division of the High Court of Justice of England and Wales (United Kingdom)) — The Test Claimants in the CFC and Dividend Group Litigation v Commissioners of Inland Revenue (First subparagraph of Article 104(3) of the Rules of Procedure — Freedom of establishment — Free movement of capital — Direct taxation — Corporation tax — Share dividends paid to a resident company by a non-resident company — Rules on controlled foreign companies ( CFCs ) — Situation as regards a non-member country — Classification of claims brought against the tax authority — Liability of a Member State for breach of Community law)
Date: 2008-04-23
Institutions: Court of Justice
Subjects: corporation tax, insurance company, interpretation of the law, redemption, tax on profits of self-employment

15.8.2008

EN

Official Journal of the European Union

C 209/13

Re:

Parties

Failure of a Member State to fulfil obligations — Failure to take,
within the prescribed time-limit,
the measures necessary to
comply with Directive 2004/18/EC of the European Parliament
and of the Council of 31 March 2004 on the coordination of
procedures for the award of public works contracts, public
supply contracts and public service contracts (OJ 2004 L 134,
p. 114)

Applicant: The Test Claimants in the CFC and Dividend Group
Litigation

Defendant: Commissioners of Inland Revenue

Operative part of the judgment

The Court:

1. Declares that, in failing to adopt, within the prescribed time-limit,
all the laws, regulations and administrative provisions necessary to
comply with Directive 2004/18/EC of the European Parliament
and of the Council of 31 March 2004 on the coordination of
procedures for the award of public works contracts, public supply
contracts and public
the Grand Duchy of
Luxembourg has failed to fulfil its obligations under that directive;

contracts,

service

2. Orders the Grand Duchy of Luxembourg to pay the costs.

(1) OJ C 211, 8.9.2007.

Order of the Court (Fourth Chamber) of 23 April 2008
(reference for a preliminary ruling from the Chancery Divi-
sion of the High Court of Justice of England and Wales
(United Kingdom)) — The Test Claimants in the CFC and
Inland
Dividend Group Litigation v Commissioners of

Revenue

(Case C-201/05) (1)

(First subparagraph of Article 104(3) of the Rules of Proce-
dure — Freedom of establishment — Free movement of capital
— Direct taxation — Corporation tax — Share dividends
paid to a resident company by a non-resident company —
Rules on controlled foreign companies (‘CFCs’) — Situation
as regards a non-member country — Classification of claims
brought against the tax authority — Liability of a Member
State for breach of Community law)

(2008/C 209/18)

Language of the case: English

Referring court

Chancery Division of the High Court of Justice of England and
Wales

Re:

Reference for a preliminary ruling — High Court of Justice
(Chancery Division) — Interpretation of Articles 43, 49
and 56 EC — National tax legislation — Corporation tax —
Exemption — Dividends paid by other companies to a company
established in national territory — Situation differing according
to the State where the other companies are established

Operative part of the order

legislation of a Member State which exempts

1. Article 43 EC is to be interpreted as meaning that it does not
from
preclude
corporation tax dividends which a resident company receives from
another resident company, when that State imposes corporation tax
on dividends which a resident company receives from a non-resident
company has a shareholding
company in which the resident
enabling it to exercise a definite influence over the decisions of that
non-resident company and to determine its activities, while at the
same time granting a tax credit for the tax actually paid by the
company making the distribution in the Member State in which it
is resident, provided that the rate of tax applied to foreign-sourced
dividends is no higher than the rate of tax applied to nationally-
sourced dividends and that the tax credit is at least equal to the
amount paid in the Member State of the company making the
distribution, up to the limit of the amount of the tax charged in
the Member State of the company receiving the distribution.

legislation of a Member State which exempts

Article 56 EC is to be interpreted as meaning that it does not
preclude
from
corporation tax dividends which a resident company receives from
another resident company, when that State imposes corporation tax
on dividends which a resident company receives from a non-resident
company in which the resident company holds at least 10 % of the
voting rights, while granting a tax credit for the tax actually paid
by the company making the distribution in the Member State in
which it is resident, provided that the rate of tax applied to foreign-
sourced dividends is no higher than the rate of tax applied to
nationally-sourced dividends and that the tax credit is at least equal
to the amount paid in the Member State of the company making
the distribution, up to the limit of the amount of the tax charged
in the Member State of the company receiving the distribution.

legislation of a Member State which exempts

Article 56 EC is, furthermore, to be interpreted as meaning that it
precludes
from
corporation tax dividends which a resident company receives from
another resident company, where that State levies corporation tax
on dividends which a resident company receives from a non-resident
company in which it holds less than 10 % of the voting rights,
without granting the company receiving the dividends a tax credit
for the tax actually paid by the company making the distribution
in the State in which the latter is resident.

C 209/14

EN

Official Journal of the European Union

15.8.2008

2. Article 56 EC is to be interpreted as meaning that it precludes
legislation of a Member State which allows an exemption from
corporation tax for certain dividends received from resident compa-
nies by resident insurance companies but excludes such an exemp-
tion for similar dividends received from non-resident companies, in
so far as it entails less favourable treatment of the latter dividends.

3. Articles 43 EC and 48 EC must be interpreted as precluding the
inclusion in the tax base of a resident company established in a
Member State of profits made by a controlled foreign company in
another Member State, where those profits are subject in that State
to a lower level of taxation than that applicable in the first State,
unless such inclusion relates only to wholly artificial arrangements
intended to escape the national tax normally payable.

Where it is established that the legislation of a Member State
constitutes a restriction on freedom of establishment prohibited by
Article 43 EC or a restriction on the free movement of capital
prohibited by Article 56 EC, the national court may, in order to
establish the recoverable losses, determine whether
the injured
parties have shown reasonable diligence in order to avoid those
losses or to limit
they
their extent and whether,
availed themselves in time of all legal remedies available to them.
However, in order to prevent the exercise of the rights which Arti-
cles 43 EC and 56 EC confer on individuals from being rendered
impossible or excessively difficult, the national court may determine
whether the application of that legislation, coupled, where appro-
priate, with the relevant provisions of Double Taxation Conven-
tions, would,
in any event, have led to the failure of the claims
brought by the claimants in the main proceedings before the tax
authorities of the Member State concerned.

in particular,

Accordingly, such a tax measure must not be applied where it is
proven, on the basis of objective factors which are ascertainable by
third parties,
that
controlled foreign company is actually established in the host
Member State and carries on genuine economic activities there.

tax motives,

that despite

existence of

the

However, Articles 43 EC and 48 EC are to be interpreted as not
precluding national tax legislation which imposes certain compli-
ance requirements where the resident company seeks exemption
from taxes already paid on the profits of that controlled foreign
company in the State in which it is resident, provided that the aim
the controlled foreign
of
company is actually established and that its economic activities are
genuine without that entailing undue administrative constraints.

those requirements

to verify that

is

4. Articles 56 EC to 58 EC are to be interpreted as not precluding
the legislation of a Member State which grants a corporation tax
concession in respect of certain dividends received from resident
companies by resident companies but excludes such a concession for
dividends received from companies established in a non-member
country particularly where the grant of that concession is subject to
conditions compliance with which can be verified by the competent
authorities of that Member State only by obtaining information
from the non-member country where the distributing company is
established.

5. In the absence of Community legislation, it is for the domestic legal
system of each Member State to designate the courts and tribunals
having jurisdiction and to lay down the detailed procedural rules
governing actions for safeguarding rights which individuals derive
from Community law, including the classification of claims brought
by injured parties before national courts and tribunals. Those courts
and tribunals are, however, obliged to ensure that individuals have
an effective legal remedy enabling them to obtain reimbursement of
the tax unlawfully levied on them and the amounts paid to that
tax. As
Member State or withheld by it directly against
regards other loss or damage which a person may have sustained by
reason of a breach of Community law for which a Member State is
liable, the latter is under a duty to make reparation for the loss or
damage caused to individuals under the conditions set out in para-
graph 51 of the judgment in Joined Cases C-46/93 and C-48/93
Brasserie du Pêcheur and Factortame [1996] ECR I-1029, but
that does not preclude the State from being liable under less restric-
tive conditions, where national law so provides.

that

(1) OJ C 182, 23.7.2005.

the Court

(Second Chamber) of 12 June
Order of
2008 (references
for a preliminary ruling from the
Tribunale amministrativo regionale del Lazio (Italy)) —
Confcooperative Friuli Venezia Giulia (C-23/07), Luigi Soini
(C-23/07 and C-24/07), Azienda Agricola Vivai Pinato
Mario e figlio (C-23/07), Cantina Produttori Cormòns
Soc. cons. arl (C-24/07) v Ministero delle Politiche Agricole,
alimentari e forestali, Regione Friuli Venezia Giulia

(Joined Cases C-23/07 and C-24/07) (1)

(Agriculture — Regulations (EC) Nos 1493/1999, 753/2002
and 1429/2004 — Common organisation of the market in
wine — Labelling of wines — Use of names of vine varieties
or synonyms thereof — Geographical indication ‘Tokaj’ for
wines originating in Hungary — Possible use of vine variety
in addition to the
name ‘Tocai friulano’ or ‘Tocai
geographical indication of certain wines originating in Italy
— Exclusion after a transitional period of thirteen years
expiring on 31 March 2007 — Validity — Legal basis —
Article 34 EC — Principle of non-discrimination — Principles
of international law on treaties — Accession of Hungary to
the European Union — Articles 22 to 24 of the TRIPs
Agreement)

italico’

(2008/C 209/19)

Language of the case: Italian

Referring court

Tribunale amministrativo regionale del Lazio