“ 1. Without prejudice to the following provisions, Member States shall abolish restrictions on movement of capital taking place between persons resident in Member States. To facilitate application of this Directive, capital movements shall be classified in accordance with the Nomenclature in Annex I … ”
“ 1. Member States shall take the measures necessary to comply with this Directive no later than 1 st July 1990. They shall forthwith inform the Commission thereof. They shall also make known, by the date of their entry into force at the latest, any new measure or any amendment made to the provisions governing the capital movements listed in Annex I. ”
“ A – Transactions in securities on the capital market 1. Acquisition by non-residents of domestic securities dealt in on a stock exchange. 2. Acquisition by residents of foreign securities dealt in on a stock exchange. 3. Acquisition by non-residents of domestic securities not dealt in on a stock exchange. 4. Acquisition by residents of foreign securities not dealt in on a stock exchange. ”
“ 1. Within the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited … ”
“ 1. The provisions of Article 56 shall be without prejudice to the right of Member States: (a) to apply the relevant provisions of their tax law which distinguish between taxpayers who are not in the same situation with regard to their place of residence or with regard to the place where the capital is invested; (b) to take all requisite measures to prevent infringements of national law and regulations, in particular in the field of taxation and the prudential supervision of financial institutions, or to lay down procedures for the declaration of capital movements for the purposes of administrative or statistical information, or to take measures which are justified on grounds of public policy or public security. 2. The provisions of this Chapter shall be without prejudice to the applicability of restrictions on the right of establishment which are compatible with this Treaty. 3. The measures and procedures referred to in paragraphs 1 and 2 shall not constitute a means of arbitrary discrimination or a disguised restriction on the free movement of capital and payments as defined in Article 56. ”
“ Within the framework of the provisions of this Agreement, there shall be no restrictions between the Contracting Parties on the movement of capital belonging to persons resident in EC Member States or EFTA States and no discrimination based on the nationality or on the place of residence of the parties or on the place where such capital is invested. Annex XII contains the provisions necessary to implement this Article. ”
“ [Question 4]. Where the Member State has measures which in certain circumstances provide for resident companies, if they so elect, to recover the ACT paid on distributions to the shareholders to the extent that distributions are received by the resident companies from non-resident companies (including for this purpose companies resident in third countries) is it contrary to Article 43 [EC], [Article] 56 EC … for those measures: (a) to oblige the resident companies to pay ACT and to reclaim it subsequently; and (b) not to provide for the shareholders of the resident companies to receive a tax credit which they would have received on a dividend from a resident company which had not itself received dividends from non-resident companies? ”
“ [140]. By Question 4, the national court essentially asks whether Articles 43 EC and 56 EC … preclude national legislation, such as the legislation at issue in the main proceedings, which, while allowing resident companies receiving foreign-sourced dividends to elect to recover ACT accounted for on a subsequent distribution to their own shareholders, first, obliges those companies to pay the ACT and to reclaim it subsequently and, secondly, does not provide any tax credit to their shareholders, whereas those shareholders would have received such a tax credit if the resident companies had made a distribution based on nationally-sourced dividends … [148]. … A shareholder receiving a payment of dividends from a resident company which has its origin in foreign-sourced dividends treated as FIDs, is not entitled to a tax credit, but is treated as having received income which has been taxed at the lower rate for the tax year in question. In the absence of a tax credit, such a shareholder has no right to any repayment of tax if he is not liable to income tax or where the income tax due is less than the tax on the dividend at the lower rate. [149]. As the claimants in the main proceedings contend, that means a company which has elected to be taxed under the FID regime must increase the amount of distributions if it wishes to guarantee its shareholders a return equivalent to that which would be achieved from a payment of nationally-sourced dividends … [151]. As regards the obligation on a company which has elected to be taxed under the FID regime to account for ACT pending subsequent repayment, the United Kingdom Government repeats its argument that the situation of a company receiving foreign-sourced dividends is not comparable to that of a company receiving nationally-sourced dividends, in that the obligation on the former company to account for ACT on a subsequent payment of dividends is explained by the fact that, unlike the latter, it receives dividends on which no ACT has been accounted for. If, in that different context, a company receiving foreign-sourced dividend which elects to be taxed under the FID regime is entitled to reimbursement of the ACT accounted for, such treatment cannot constitute discrimination in any way … [158]. As regards the fact that shareholders are not entitled to a tax credit under the FID regime, the United Kingdom Government argues that such a tax credit is granted to a shareholder receiving a distribution only where there is a economic double taxation of the profits distributed which must be prevented or mitigated. That does not apply to the FID regime in as much as, first, no ACT has been accounted for on foreign-sourced dividends and, secondly, the ACT which the resident company receiving those dividends must account for in making a distribution to its shareholders is subsequently repaid. [159]. However, that argument is based on the same false premiss that a risk of economic double taxation arises only in the case of dividends paid by a resident company subject to an obligation to account for ACT on dividends distributed by it, whereas the true position is that such a risk also exists in the case of dividends paid by a non-resident company, the profits of which are also subject to corporation tax in the State in which it is resident, at the rates and according to the rules applying there. [160]. For the same reason, the United Kingdom Government cannot suggest that dividends received from a non-resident company are not less favourably treated by arguing that, because such a company is not obliged to account for ACT, it may pay higher dividends to its shareholders. [161]. It is also necessary to reject the argument that the differences in treatment to which foreign-sourced dividends paid under the FID regime are subject do not constitute a restriction on the free movement of establishment because that scheme is merely optional. [162]. As the claimants in the main proceedings point out, the fact that a national scheme which restricts freedoms of movement is optional does not mean that it is not incompatible with Community law. … [173]. The answer to Question 4 must therefore be that Articles 43 and 56 EC preclude legislation of a Member State which, while exempting from advanced corporation tax resident companies paying dividends to their shareholders which have their origin in nationally-sourced dividends received by them, allows resident companies distributing dividends to the shareholders which have their origin in foreign-sourced dividends received by them to elect to be taxed under a regime which permits them to recover the advanced corporation tax, first, obliges those companies to pay that advanced corporation tax and subsequently to claim repayment and, secondly, does not provide a tax credit for their shareholders, whereas those shareholders which would have received such a tax credit in the case of a distribution made by a resident company which had its origin in nationally-sourced dividends. ”
“ [50]. The Finnish and United Kingdom Governments referred to various practical obstacles which, in their submission, preclude a shareholder fully taxable in Finland from being granted a tax credit corresponding to the corporation tax due from the company established in another Member State. They argued that the Treaty rules on the free movement of capital apply not only to movements of capital between Member States but also to movements of capital between Member States and non-Member countries. According to those Governments, bearing in mind the diversity of the tax systems in force, it is impossible in practice to determine exactly the amount of tax, by way of corporation tax, which has effected dividends paid by a company established in another Member State or in a non-Member country. They argue that such impossibility is due in particular to the fact that the basis of assessment for corporation tax varies from one country to another and that the rates may vary from one year to the next. They argue that dividends paid by a company do not necessarily arise from the profits of a given accounting year. [51]. In that respect, it should first be noted that the case in the main proceedings does not in any way concern the free movement of capital between Member States and non-Member countries. This case concerns the refusal by the tax authorities of a Member State to grant a tax advantage to a person fully taxable in that State where that person has received dividends from a company established in another Member State . [52]. Moreover, the order for reference shows that, in Finland, the tax credit allowed to the shareholder is equal to 29 / 71 ths of the dividends paid by the company established in that Member State. For the purposes of calculating the tax credit, the numerator of the fraction to be applied is thus equal to the rate of taxation of company profits subject to corporation tax, and the denominator is equal to the result obtained by deducting that same rate of taxation from the base of 100. [53]. Finally it should also be noted that in Finnish tax law, the tax credit always corresponds to the amount of tax actually paid by way of corporation tax by the company which distributes the dividends. Should the tax paid by way of corporation tax turn out to be less than the amount of the tax credit, the difference is charged to the company making the distribution by means of an additional tax. [54]. In those circumstances, the calculation of a tax credit granted to a shareholder fully taxable in Finland, who has received dividends from a company established in Sweden, must take account of the tax actually paid by the company established in that other Member State, as such tax arises from the general rules on calculating the basis of assessment and from the rate of corporation tax in that latter Member State. Possible difficulties in determining the tax actually paid cannot, in any event, justify an obstacle to the free movement of capital such as that which arises from the legislation in issue in the main proceedings … [55]. In the light of the above considerations the answer to the questions referred must be that Articles 56 and 58 EC preclude legislation whereby the entitlement of a person fully taxable in one Member State to a tax credit in relation to dividends paid to him by limited companies is excluded where those companies are not established in that State. ”
“ [18]. … The national court is asking in essence whether Articles 56 EC and 58 EC preclude legislation, such as that at issue in the main proceedings, whereby the right of a fully-taxable person in a Member State to the benefit of a tax credit on dividends paid to him by limited companies is excluded where those companies are not established in that State … [20]. As for whether tax legislation such as that at issue in the main proceedings involves a restriction on the free movement of capital within the meaning of Article 56 EC, it should be noted that the tax credit under Finnish tax legislation is designed to prevent the double taxation of company profits distributed to shareholders by setting off the corporation tax due from companies distributing dividends against the tax due from the shareholder by way of income tax on revenue from capital. The end result of such a system is that dividends are no longer taxed in the hands of the shareholder. Since the tax credit applies solely in favour of the dividends paid by companies established in Finland, that legislation disadvantages fully taxable persons in Finland who receive dividends from companies established in other Member States, who, for their part, are taxed at the rate of 29% by way of income tax on revenue from capital. [21]. [The European Court of Justice observed at paragraph 21 that the economic double taxation is not cured by any relevant Double Tax Treaties] . [22]. It follows that the Finnish tax legislation has the effect of deterring fully taxable persons from investing their capital in companies established in another Member State . [23]. Such a provision also has a restrictive effect as regards companies established in other Member States, in that it constitutes an obstacle to their raising capital in Finland. Since revenue from capital of non-Finnish origin receives less favourable tax treatment than dividends distributed by companies established in Finland, the shares of companies established in other Member States are less attractive to investors residing in Finland than shares in companies which have their seat in that Member State … [24]. It follows from the above that legislation such as that at issue in the main proceedings constitutes a restriction on the free movement of capital which is, in principle, prohibited by Article 56 EC. ”
“Since1 January 1973 , and certainly since the decision of the Court of Justice in Defrenne v Sabena, there was no legal impediment preventing someone who claimed that he had been unfairly dismissed from presenting a claim and arguing that the restriction on claims by part-time workers was indirectly discriminatory.”
“The consistent flaw in each of the new submissions advanced by the Appellant is that it has always been open to the Appellant itself to bring the challenge that was brought by the taxpayer inCase C-319/02 Manninen[2004] ECR I-7477 .”