Case C-68/15: Judgment of the Court (First Chamber) of 17 May 2017 (request for a preliminary ruling from the Grondwettelijk Hof — Belgium) — X v Ministerraad (Reference for a preliminary ruling — Freedom of establishment — Parent-Subsidiary Directive — Tax legislation — Tax on company profits — Distribution of dividends — Withholding tax — Double taxation — ‘Fairness tax’)
Date: 2017-05-17
Institutions: Court of Justice
Subjects: basis of tax assessment, corporation tax, double taxation, equal treatment, parent company, profit, right of establishment, subsidiary, tax law, tax relief








C_2017239EN.01000302.xml










24.7.2017   


EN


Official Journal of the European Union


C 239/3





Judgment of the Court (First Chamber) of 17 May 2017 (request for a preliminary ruling from the Grondwettelijk Hof — Belgium) — X v Ministerraad
(Case C-68/15) (1)

((Reference for a preliminary ruling - Freedom of establishment - Parent-Subsidiary Directive - Tax legislation - Tax on company profits - Distribution of dividends - Withholding tax - Double taxation - ‘Fairness tax’))
(2017/C 239/04)
Language of the case: Dutch

Referring court

Grondwettelijk Hof

Parties to the main proceedings


Applicant: X

Defendant: Ministerraad

Operative part of the judgment







1.


Freedom of establishment must be interpreted as not precluding tax legislation of a Member State, such as that at issue in the main proceedings, under which both a non-resident company conducting an economic activity in that Member State through a permanent establishment and a resident company, including the resident subsidiary of a non-resident company, are subject to a tax such as the ‘fairness tax’ when they distribute dividends which, as a result of the use of certain tax advantages provided for by the national tax system, are not included in their final taxable profits, provided that the method of determining the taxable amount of that tax does not in fact lead to that non-resident company being treated in a less advantageous manner than a resident company, which is for the referring court to ascertain.










2.


Article 5 of Council Directive 2011/96/EU of 30 November 2011 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States must be interpreted as not precluding tax legislation of a Member State, such as that at issue in the main proceedings, providing for a tax such as the ‘fairness tax’, to which non-resident companies conducting an economic activity in that Member State through a permanent establishment and resident companies, including the resident subsidiary of a non-resident company, are subject when they distribute dividends which, as a result of the use of certain tax advantages provided for by the national tax system, are not included in their final taxable profits.










3.


Article 4(1)(a) of Directive 2011/96, read in conjunction with Article 4(3) thereof, must be interpreted as precluding national tax legislation, such as that at issue in the main proceedings, in so far as that legislation, in a situation where profits received by a parent company from its subsidiary are distributed by the parent company after the year in which they were received, has the consequence of subjecting those profits to taxation exceeding the 5 % ceiling provided for in that provision.






(1)  OJ C 146, 4.5.2015.