Tax millions hang in balance after ECJ decision
ECJ rules withholding tax rules 'discriminatory' so European governments may have to reform the way dividends sent abroad are taxed
Hundreds of millions of euros could be cut fro the tax bills of multinational
companies and fund managers if a preliminary ruling at the European Court of
Justice on ‘withholding’ taxes comes into force.
If the decision is upheld, it would force government’s to reform how they tax
income that is being sent abroad, to the benefit of the companies involved.
The case was initially brought against the French government for imposing a
higher tax burden on dividends destined for a Dutch parent company than for
those given to French parent companies. ECJ advocate-general, Leendert Geelhoed,
said the practice was ‘quite patently discriminatory’, according to the
Financial Times.