The CJEU found that the trade tax provisions at issue are likely to dissuade resident parent companies from investing their capital in subsidiaries established in non-member states because the deductibility of dividends paid by the subsidiaries in non-member states is subject to stricter conditions than those for dividends paid by resident companies.
As such, it constitutes a restriction on the movement of capital between member states and non-member states, which is prohibited by article 63 of the Treaty on the Functioning of the European Union, the Court concluded.
The article is part of dReport – November 2018, Tax news; Grants and investment Incentives.
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