Press Release: Taxation of dividends: Commission takes steps against Bulgaria, Spain, Portugal and Romania, and closes case against Luxembourg

The European Commission sent reasoned opinions (the second step of the infringement procedure of Article 226 of the EC Treaty) to Spain and Portugal about their rules under which dividends paid to foreign pension funds are taxed more heavily than dividends paid to domestic pension funds. It also sent requests for information in the form of letters of formal notice (the first step of the infringement procedure) to Bulgaria about its rules under which inbound dividends paid to companies may be taxed more heavily than domestic dividends and to Romania and Bulgaria about their rules under which outbound dividends paid to companies may be taxed more heavily than domestic dividends. The four Member States were asked to reply within two months. At the same time the Commission closed the case against Luxembourg on the higher taxation of outbound dividends paid to companies, as Luxembourg has eliminated the discriminatory taxation.