C‑685/16 EV – German Participation Exemption for Dividends Breaches EU Law
February 26, 2018
Advocate General (“AG”) Wathelet of the CJEU has issued his Opinion in C-685/16 EV v Finanzamt Lippstadt. The AG found that the German participation exemption regime applicable to company dividends originating in non-EU countries was incompatible with the free movement of capital. Non-EU dividends had to comply with stricter requirements than German dividends in order to qualify for the exemption, even though the two types of dividends were objectively comparable. This difference in treatment amounted to a restriction on the free movement of capital which could not be justified on grounds of overriding public interest, such as combating tax avoidance or ensuring the effectiveness of fiscal controls.
This article appears in the JHA February 2018 Tax Newsletter, which also features:
You can download the whole newsletter as a PDF: February 2018 – Newsletter