Press Release: Taxation: Commission decided to refer Spain to the Court of Justice of the European Union for discriminatory tax treatment applied to investments in non-resident companies

The European Commission decided on the 26 November 2014 to refer Spain to the Court of Justice of the European Union to ensure that the Spanish legislation on taxation of investments in non-resident companies complied with EU law.

Under the Spanish provisions, the tax treatment for foreign-sourced dividends (i.e. dividends distributed by a non-resident company to a Spanish company) was more burdensome than the one applied to domestic-sourced dividends (i.e. dividends distributed by companies resident in Spain). As a result, a Spanish company which invested in a non-resident company must fulfil more conditions (e.g. volume of income, level of shareholder participation) than for a domestic investment if it wanted to benefit from the tax advantage. In other cases, the tax advantage foreseen for domestic-sourced dividends was not available for foreign-sourced dividends.

• Primary Source

ESO: Background information: June infringements package: main decisions http://www.europeansources.info/record/memo-june-infringements-package-main-decisions/

European Commission: DG Taxation and Customs Union: General Infringements: Infringement cases http://ec.europa.eu/taxation_customs/common/infringements/infringement_cases/index_en.htm

European Commission: Secretariat-General: Application of EU law: Infringements of EU law http://ec.europa.eu/eu_law/infringements/infringements_en.htm

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