Press Release: Direct Taxation: The European Commission refers Portugal and Spain to Court of Justice over discriminatory taxation of foreign pension funds

The European Commission decided to refer Spain and Portugal to the European Court of Justice for their rules under which dividend and/or interest payments to foreign pension funds (outbound payments) may be taxed more heavily than dividend and/or interest payments to domestic pension funds (domestic payments). The Commission considered these rules to be contrary to the EC Treaty and the EEA Agreement, as they restrict the free movement of capital.