COM(2003)810 - Dividend taxation of individuals in the Internal Market

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Contents

  1. Key information
  2. Key dates
  3. Related information
  4. Full version
  5. EU Monitor

1.

Key information

official title

Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee - Dividend taxation of individuals in the Internal Market
 
Legal instrument Communication
reference by COM-number105 COM(2003)810 EN
Additional COM-numbers COM(2003)810
CELEX number108 52003DC0810

2.

Key dates

Document 19-12-2003
Online publication 19-12-2003

3.

Related information

 

4.

Full version

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  • 1. 
    The Commission Company Tax Communication, COM(2001) 582 final, 'Towards an internal market without tax obstacles'.

     
  • 2. 
    SEC(2001) 1681, 'Company taxation in the internal market', a Commission staff working paper released on 23 October 2001, available on the Commission's website under the address: europa.eu.int/comm/ taxation_customs/publications/official_doc/sec/sec.htm

     
  • 3. 
    Case C-35/98 Verkooijen
     
  • 4. 
    Report of the Committee of Independent Experts on Company taxation (the Ruding Report), March 1992, pages 207-208.

     
  • 5. 
    COM(1999) 232 final of 11 May 1999.

     
  • 6. 
    Portfolio investors are investors who do not aim to influence the management of the target company. The taxation of dividends received by companies is to a large extent covered by the Parent-Subsidiary Directive (Council Directive 90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States, OJ L 225 of 20 August 1990), which provides for exemption of withholding taxes on the payment of qualifying dividends and credit or exemption in the hands of the company receiving them.

     
  • 7. 
    Paragraph 49 of the Commentary on Articles 23 A and 23 B of the OECD Model Tax Convention.

     
  • 8. 
    Paragraph 1 of the Commentary on Articles 23 A and 23 B.

     
  • 9. 
    In turn, single schedular rate or half income systems do not fully relieve double taxation of dividend income for lower income taxpayers, whereas the imputation system always achieves that.

     
  • 10. 
    With a rate of 15% (5% for taxpayers in the low income tax bracket), see the Jobs and Growth Tax Relief Reconciliation Act of 2003, of 22 May 2003.

     
  • 11. 
    Legislative Decree of 12 September 2003. The changes should take effect as of 1 January 2004.

     
  • 12. 
    Case C-319/02, Manninen.

     
  • 13. 
    Case C-315/02, Lenz.

     
  • 14. 
    See the English summary of an extensive report by a working group established by the Finnish Ministry of Finance on www.vm.fi/resource/fi/ 27616.pdf, page 197.

     
  • 15. 
    Budgetbegleitgesetz 2003.

     
  • 16. 
    Verkooijen, paragraph 32, which refers to Case C-80/94 Wielockx
     
  • 17. 
    The ECJ ruled in the case of shareholders with foreign shares giving them definite influence over the company's decisions and the possibility to determine its activities that they were exercising their right of establishment in the sense of Article 43 of the EC Treaty, see Case C-251/98 Baars
     
  • 18. 
    OJ 1988 L 178/5. The nomenclature is expressly stated not to be an exhaustive list. The substance of Article 67 of the EEC Treaty is now to be found in Article 56 of the EC Treaty

     
  • 19. 
    SEC(2001) 1681, 'Company taxation in the internal market', a Commission staff working paper released on 23 October 2001, available on the Commission's website under the address: europa.eu.int/comm/ taxation_customs/publications/official_doc/sec/sec.htm

     
  • 20. 
    Item III.A.2. of Annex I.

     
  • 21. 
    See Verkooijen paragraphs 28 to 30.

     
  • 22. 
    To that effect Case C-484/93 Svensson and Gustavsson v Ministre du Logement et de l'Urbanisme
     
  • 23. 
    Verkooijen, paragraph 35.

     
  • 24. 
    Verkooijen, paragraph 36.

     
  • 25. 
    Case C-54/99 Eglise de Scientologie
     
  • 26. 
    Verkooijen, paragraph 43.

     
  • 27. 
    The Commission Company Tax Communication, COM(2001) 582 final, 'Towards an internal market without tax obstacles'.

     
  • 28. 
    SEC(2001) 1681, 'Company taxation in the internal market', a Commission staff working paper released on 23 October 2001, available on the Commission's website under the address: europa.eu.int/comm/ taxation_customs/publications/official_doc/sec/sec.htm

     
  • 29. 
    See, for example, Case C-478/98 Commission v. Belgium (DEM Eurobonds)
     
  • 30. 
    See paragraph 43 of Verkooijen .

     
  • 31. 
    Case C-324/00 Lankhorst, not yet published, paragraph 37, ICI, paragraph 26, see also Case C-397/98 Hoechst
     
  • 32. 
    Lankhorst, paragraph 36, Verkooijen paragraph 59, ICI paragraph 28.

     
  • 33. 
    Paragraph 97 of Case C-385/00 De Groot, not yet published, where the ECJ refers to: with respect to the freedom of establishment, Case 270/83 Commission v France
     
  • 34. 
    Paragraph 44 of Case C-294/97 Eurowings
     
  • 35. 
    Paragraph 34 of Case C-18/95 Terhoeve,
     
  • 36. 
    See, for instance, Case C-80/94 Wielockx
     
  • 37. 
    Paragraph 26 of Case C-270/83 Avoir Fiscal
     
  • 38. 
    Verkooijen, paragraph 48, where the ECJ refers to Case C-120/95 Decker v Caisse de Maladie des Employés Privés
     
  • 39. 
    Case C-270/83 Commission v. France
     
  • 40. 
    France exempts the first EUR 2.440 of dividends received by married couples, but inbound dividends are excluded from the exemption. The Commission therefore opened an infringement procedure against France on this issue, see IP/03/990 of 10.7.2003.

     
  • 41. 
    Verkooijen, paragraph 35.

     
  • 42. 
    Ibidem, paragraph 46.

     
  • 43. 
    Ibidem, paragraph 28.

     
  • 44. 
    Case C-204/90 Bachmann,
     
  • 45. 
    As in Paragraph 58 of Verkooijen.

     
  • 46. 
    Paragraph 40.

     
  • 47. 
    Case C-168/01 Bosal, not yet published, paragraph 29.

     
  • 48. 
    Case C-436/00 X, Y against Riksskatteverket, not yet published, paragraph 49.

     
  • 49. 
    Under the deduction method the foreign tax is deducted from the gross dividend. The result is the base for the calculation of the domestic tax on the dividend.

     
  • 50. 
    Case C-279/93 Schumacker
     
  • 51. 
    Ruding Report, page 34.

     
  • 52. 
    Paragraph 3.7 of 'Double Taxation Relief For Companies: A Discussion Paper', by Mike Waters of the UK Inland Revenue, 10 March 1999, to be found on www.inlandrevenue.gov.uk/consult/ dtrc.pdf

     
  • 53. 
    The Commission Company Tax Communication, COM(2001) 582 final, 'Towards an internal market without tax obstacles'.

     
  • 54. 
    SEC(2001) 1681, 'Company taxation in the internal market', a Commission staff working paper released on 23 October 2001, available on the Commission's website under the address: europa.eu.int/comm/ taxation_customs/publications/official_doc/sec/sec.htm

     
  • 55. 
    Case C-35/98 Verkooijen
     
  • 56. 
    Report of the Committee of Independent Experts on Company taxation (the Ruding Report), March 1992, pages 207-208.

     
  • 57. 
    COM(1999) 232 final of 11 May 1999.

     
  • 58. 
    Portfolio investors are investors who do not aim to influence the management of the target company. The taxation of dividends received by companies is to a large extent covered by the Parent-Subsidiary Directive (Council Directive 90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States, OJ L 225 of 20 August 1990), which provides for exemption of withholding taxes on the payment of qualifying dividends and credit or exemption in the hands of the company receiving them.

     
  • 59. 
    Paragraph 49 of the Commentary on Articles 23 A and 23 B of the OECD Model Tax Convention.

     
  • 60. 
    Paragraph 1 of the Commentary on Articles 23 A and 23 B.

     
  • 61. 
    In turn, single schedular rate or half income systems do not fully relieve double taxation of dividend income for lower income taxpayers, whereas the imputation system always achieves that.

     
  • 62. 
    With a rate of 15% (5% for taxpayers in the low income tax bracket), see the Jobs and Growth Tax Relief Reconciliation Act of 2003, of 22 May 2003.

     
  • 63. 
    Legislative Decree of 12 September 2003. The changes should take effect as of 1 January 2004.

     
  • 64. 
    Case C-319/02, Manninen.

     
  • 65. 
    Case C-315/02, Lenz.

     
  • 66. 
    See the English summary of an extensive report by a working group established by the Finnish Ministry of Finance on www.vm.fi/resource/fi/ 27616.pdf, page 197.

     
  • 67. 
    Budgetbegleitgesetz 2003.

     
  • 68. 
    Verkooijen, paragraph 32, which refers to Case C-80/94 Wielockx
     
  • 69. 
    The ECJ ruled in the case of shareholders with foreign shares giving them definite influence over the company's decisions and the possibility to determine its activities that they were exercising their right of establishment in the sense of Article 43 of the EC Treaty, see Case C-251/98 Baars
     
  • 70. 
    OJ 1988 L 178/5. The nomenclature is expressly stated not to be an exhaustive list. The substance of Article 67 of the EEC Treaty is now to be found in Article 56 of the EC Treaty

     
  • 71. 
    SEC(2001) 1681, 'Company taxation in the internal market', a Commission staff working paper released on 23 October 2001, available on the Commission's website under the address: europa.eu.int/comm/ taxation_customs/publications/official_doc/sec/sec.htm

     
  • 72. 
    Item III.A.2. of Annex I.

     
  • 73. 
    See Verkooijen paragraphs 28 to 30.

     
  • 74. 
    To that effect Case C-484/93 Svensson and Gustavsson v Ministre du Logement et de l'Urbanisme
     
  • 75. 
    Verkooijen, paragraph 35.

     
  • 76. 
    Verkooijen, paragraph 36.

     
  • 77. 
    Case C-54/99 Eglise de Scientologie
     
  • 78. 
    Verkooijen, paragraph 43.

     
  • 79. 
    The Commission Company Tax Communication, COM(2001) 582 final, 'Towards an internal market without tax obstacles'.

     
  • 80. 
    SEC(2001) 1681, 'Company taxation in the internal market', a Commission staff working paper released on 23 October 2001, available on the Commission's website under the address: europa.eu.int/comm/ taxation_customs/publications/official_doc/sec/sec.htm

     
  • 81. 
    See, for example, Case C-478/98 Commission v. Belgium (DEM Eurobonds)
     
  • 82. 
    See paragraph 43 of Verkooijen .

     
  • 83. 
    Case C-324/00 Lankhorst, not yet published, paragraph 37, ICI, paragraph 26, see also Case C-397/98 Hoechst
     
  • 84. 
    Lankhorst, paragraph 36, Verkooijen paragraph 59, ICI paragraph 28.

     
  • 85. 
    Paragraph 97 of Case C-385/00 De Groot, not yet published, where the ECJ refers to: with respect to the freedom of establishment, Case 270/83 Commission v France
     
  • 86. 
    Paragraph 44 of Case C-294/97 Eurowings
     
  • 87. 
    Paragraph 34 of Case C-18/95 Terhoeve,
     
  • 88. 
    See, for instance, Case C-80/94 Wielockx
     
  • 89. 
    Paragraph 26 of Case C-270/83 Avoir Fiscal
     
  • 90. 
    Verkooijen, paragraph 48, where the ECJ refers to Case C-120/95 Decker v Caisse de Maladie des Employés Privés
     
  • 91. 
    Case C-270/83 Commission v. France
     
  • 92. 
    France exempts the first EUR 2.440 of dividends received by married couples, but inbound dividends are excluded from the exemption. The Commission therefore opened an infringement procedure against France on this issue, see IP/03/990 of 10.7.2003.

     
  • 93. 
    Verkooijen, paragraph 35.

     
  • 94. 
    Ibidem, paragraph 46.

     
  • 95. 
    Ibidem, paragraph 28.

     
  • 96. 
    Case C-204/90 Bachmann,
     
  • 97. 
    As in Paragraph 58 of Verkooijen.

     
  • 98. 
    Paragraph 40.

     
  • 99. 
    Case C-168/01 Bosal, not yet published, paragraph 29.

     
  • 100. 
    Case C-436/00 X, Y against Riksskatteverket, not yet published, paragraph 49.

     
  • 101. 
    Under the deduction method the foreign tax is deducted from the gross dividend. The result is the base for the calculation of the domestic tax on the dividend.

     
  • 102. 
    Case C-279/93 Schumacker
     
  • 103. 
    Ruding Report, page 34.

     
  • 104. 
    Paragraph 3.7 of 'Double Taxation Relief For Companies: A Discussion Paper', by Mike Waters of the UK Inland Revenue, 10 March 1999, to be found on www.inlandrevenue.gov.uk/consult/ dtrc.pdf

     
  • 105. 
    De Europese Commissie kent nummers toe aan officiële documenten van de Europese Unie. De Commissie maakt onderscheid in een aantal typen documenten door middel van het toekennen van verschillende nummerseries. Het onderscheid is gebaseerd op het soort document en/of de instelling van de Unie van wie het document afkomstig is.
     
  • 106. 
    De Raad van de Europese Unie kent aan wetgevingsdossiers een uniek toe. Dit nummer bestaat uit een vijfcijferig volgnummer gevolgd door een schuine streep met de laatste twee cijfers van het jaartal, bijvoorbeeld 12345/00 - een document met nummer 12345 uit het jaar 2000.
     
  • 107. 
    Het interinstitutionele nummer is een nummerreeks die binnen de Europese Unie toegekend wordt aan voorstellen voor regelgeving van de Europese Commissie.
    Binnen de Europese Unie worden nog een aantal andere nummerseries gebruikt. Iedere instelling heeft één of meerdere sets documenten met ieder een eigen nummering. Die reeksen komen niet overeen met elkaar of het interinstitutioneel nummer.
     
  • 108. 
    Deze databank van de Europese Unie biedt de mogelijkheid de actuele werkzaamheden (workflow) van de Europese instellingen (Europees Parlement, Raad, ESC, Comité van de Regio's, Europese Centrale Bank, Hof van Justitie enz.) te volgen. EURlex volgt alle voorstellen (zoals wetgevende en begrotingsdossiers) en mededelingen van de Commissie, vanaf het moment dat ze aan de Raad of het Europees Parlement worden voorgelegd.
     
  • 109. 
    Als dag van bekendmaking van een Europees besluit geldt de dag waarop het besluit in het Publicatieblad wordt bekendgemaakt, en daardoor in alle officiële talen van de Europese Unie bij het Publicatiebureau beschikbaar is.