ECJ FII ruling appears to favour the taxpayer
European Court of Justice says cross-border dividends must be taxed in the same way as national dividends in 'comparable' situations
The European Court Justice
appeared to rule in favour of the taxpayer this morning in the
multibillion-pound franked investment income tax case.
The court emphasised that a Member State must treat the payment of dividends
at national and cross-border level in the same way, appearing to favour the
taxpayer, but added that this was only required ‘if the situations are
comparable’.
Experts were still working through the finer details of the ruling, and
although first indications suggested that the case had gone in favour of the FII
taxpayers, which included British American
Tobacco , there was still concern that the details may have reduced
the sum of tax initially expected to be reclaimed.
The UK Treasury
has been very concerned about the costs of the FII case, which they have
claimed could cost the government anywhere between £7bn and £9bn.
Accountancy Age will continue to follow the opinions of tax experts
through the morning. Keep visiting accountancyage.com for the latest views and
interpretations of the ECJ judgment.
Further reading:
Read the full judgment
here
Treasury steels itself for massive tax hit from ECJ
Treasury faces tax rewrite as European challenges mount
