Case C-284/09: Judgment of the Court (First Chamber) of 20 October 2011 — European Commission v Federal Republic of Germany (Failure of a Member State to fulfil obligations — Free movement of capital — Article 56 EC and Article 40 of the Agreement on the European Economic Area — Taxation of dividends — Dividends distributed to companies established in national territory and to companies established in another Member State or a State of the European Economic Area — Different treatment)
Date: 2011-10-20
Institutions: Court of Justice
Subjects: action for failure to fulfil an obligation, corporation tax, free movement of capital, parent company, subsidiary, tax on profits of self-employment








C_2011362EN.01000301.xml










10.12.2011   


EN


Official Journal of the European Union


C 362/3





Judgment of the Court (First Chamber) of 20 October 2011 — European Commission v Federal Republic of Germany
(Case C-284/09) (1)

(Failure of a Member State to fulfil obligations - Free movement of capital - Article 56 EC and Article 40 of the Agreement on the European Economic Area - Taxation of dividends - Dividends distributed to companies established in national territory and to companies established in another Member State or a State of the European Economic Area - Different treatment)
2011/C 362/03
Language of the case: German

Parties


Applicant: European Commission (represented by: R. Lyal and B.-R. Killmann, acting as Agents)

Defendant: Federal Republic of Germany (represented by: M. Lumma and C. Blaschke, acting as Agents, and Professor A. Kube)

Re:

Failure of a Member State to fulfil its obligations — Infringement of Article 56 EC and Article 40 of the EEA Agreement — National legislation fully exempting from withholding tax the dividends paid by subsidiaries to parent companies established in national territory, whereas, with regard to parent companies established in another Member State or State of the European Economic Area, that legislation makes that total exemption subject to the condition that the minimum threshold for the parent company’s shareholdings in the share capital of the subsidiary set out in 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 (OJ 1990 L 225, p. 6) is reached

Operative part of the judgment

The Court:






1.


Declares that, by taxing dividends distributed to companies established in other Member States, where the threshold for a parent company’s holding in the capital of its subsidiary laid down in Article 3(1)(a) 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, as amended by Council Directive 2003/123/EC of 22 December 2003, is not reached, more heavily in economic terms than dividends distributed to companies established in its territory, the Federal Republic of Germany has failed to fulfil its obligations under Article 56(1) EC;










2.


Declares that, by taxing dividends distributed to companies established in Iceland and Norway more heavily in economic terms than dividends distributed to companies established in its territory, the Federal Republic of Germany has failed to fulfil its obligations under Article 40 of the Agreement on the European Economic Area of 2 May 1992;










3.


Orders the Federal Republic of Germany to pay the costs.






(1)  OJ C 256, 24.10.2009.