German law taxed interest paid on loan repayments made by a company against a loan from a shareholder, but only where the shareholder was not resident in the same country as the company. The tax authority took the view that the payments were a equivalent to a covert distribution of profits.
Held: This was discriminatory, and offended the principal of freedom of establishment. It was wrong to compare the position of a company trading for profit with corporations exempt from corporation tax. Reduction in tax revenue is not an overriding reason in the public interest capable of justifying a measure contravening a fundamental principle.
Judges:
Wathelet, President, Timmermans, Edward, Jann and Rosas JJ
Citations:
Times 27-Dec-2002, C-324/00, [2002] EUECJ C-324/00, [2002] ECR I-11779, [2003] STC 607
Links:
Jurisdiction:
European
Cited by:
Cited – Foulser and Another v HM Inspector of Taxes ChD 20-Dec-2005
The taxpayer company entered into an arrangement in which shares were purchased by a company based in Ireland and resold. A claim was made for holdover relief.
Held: The scheme failed. The restriction imposed did not infringe the right of . .
Lists of cited by and citing cases may be incomplete.
European, Corporation Tax, Company
Updated: 06 June 2022; Ref: scu.178612