Free movement of capital, taxation and third countries: The European Court of Justice and cross-border dividends

Date

2008-07-10T22:58:29Z

Authors

O'Brien, Martha

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Abstract

A unique aspect of free movement of capital, one of the fundamental freedoms guaranteed by the Treaty establishing the European Community, is that it applies not only within the European Union, but also to movements of capital between EU member states and non-EU (or third) countries. The legal and practical significance of this global extension of the EU legal regime is still unclear but recent and pending cases before the Court of Justice of the European Communities (“ECJ”) are now beginning to define its principles and limits. The potential impact is most clearly discernible in the field of direct taxation, where numerous infringement actions by the Commission and requests for preliminary rulings in taxpayer initiated cases are now being litigated. This article examines the cases on dividend taxation in the Court’s intra-EU case law, and seeks to assess how these issues will be resolved in the third country cases now reaching the ECJ.

Description

This is a draft working paper presented at EUSA 10th Bienniale conference in Montreal, May 17, 2007.

Keywords

taxation, European Union, free movement of capital, dividends

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