Court of Justice of the European Union

Judgment of 2 September 2015

Case no. C-386/14

In the Judgment in question, rendered in the context of a reference for a preliminary ruling, the Court of Justice of the European Union gave its opinion on the unequal treatment of dividends received by a parent company of a tax-integrated group, depending on whether the dividends where being paid by companies which are themselves members of that integrated group – which implies that they are established in France – or by subsidiaries established in other Member States.

French source dividends are deducted in full from the net profits of that parent company and are therefore fully exempt from Corporate Income Tax in that Member State, whereas dividends received from subsidiaries established in other Member States are only partly exempt, due to the add-back of the proportion of costs and expenses to the parent company’s profits.

In this context, the Court of Justice of the European Union declared that Article 49 TFEU must be interpreted as precluding rules of a Member State that govern a tax integration regime under which a tax-integrated parent company is entitled to neutralisation as regards the add-back of a proportion of costs and expenses in what concerns dividends received from tax-integrated resident companies, when such neutralisation is refused under the same rules regarding dividends distributed by subsidiaries established in another Member State, which, had they been resident, could, at their option, benefitted from the tax integration.

Court of Justice of the European Union

Judgment of 17 September 2015

Case no. C-10/14, C-14/14 and C-17/14

In the Judgment in question, rendered in the context of a reference for a preliminary ruling, the Court of Justice of the European Union declared that Articles 63 and 65 of the TFEU must be interpreted as precluding legislation of a Member State which imposes a withholding tax on dividends paid by a resident company and provides a mechanism for deducting or reimbursing the tax withheld only for resident taxpayers, in so far the final tax burden for non-resident taxpayers is greater than that borne by resident taxpayers (as tax withheld is a final tax) and that such difference in treatment in the case under analysis does not cease to exist by the application of the existing Double Tax Treaty.