ECJ ruling deals blow to UK tax sovereignty
The sovereignty of the UK tax system was dealt another blow yesterday when the European Court of Justice delivered judgement in favour of the taxpayer again.
The implications of the Manninen case could be far-reaching and means that individuals should be able to claim a 10% tax credit on dividend payments from overseas companies.
Manninen, a Finnish taxpayer, received dividends from a Swedish company, and argued successfully that the difference in treatment of the Swedish company and the Finnish is contrary to EU law.
‘UK individuals with foreign source dividend income should now review their position, and where appropriate file for a tax credit rather than pay a higher tax rate on the income from foreign shares. Tax payers will be able to make claims retrospectively for the last 6 years, and perhaps further if they act quickly,’ said Adam Craig, head of the EU tax practice at Deloitte in the UK.