C‑685/16 EV – German Participation Exemption for Dividends Breaches EU Law
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:
- C‑398/16 and C‑399/16 X BV and X NV on the Dutch Fiscal Unity Regime
- AG Opinion in Bevola case C-650/16 – Marks & Spencer applied to cross border definitive losses
As announced in July of last year, the 2020 Budget introduces a new deferred payment plan option for Corporation Tax charged on profits or gains arising from certain transactions between UK companies and EEA companies of the same group of companies.
Reversal of Inverclyde
The 2020 Budget announced provisions to reverse last year’s FTT decision in Inverclyde. In that case, HMRC denied the appellant LLPs’ claims for Business Property Renovation Allowance on the basis that the LLPs did not carry on a business with a view to a profit.
HMRC nudge letters
HMRC continues to fight the good fight in its quest to cut down on tax avoidance and have recently been issuing further “nudge” letters to taxpayers who may have an income source or assets producing gains overseas and consequently an undisclosed outstanding UK tax liability.
ExxonMobil: FTT Decision Released
The FTT decision in Esso Exploration and Production UK Limited and others v HMRC, which relates to pre-2006 claims for Cross Border Group Relief, has now been released.