Case C‑386/14

Groupe Steria SCA

v

Ministère des Finances et des Comptes publics

(Request for a preliminary ruling from the cour administrative d’appel de Versailles)

‛Reference for a preliminary ruling — Tax legislation — Freedom of establishment — Directive 90/435/EEC — Article 4(2) — Cross-border distributions of dividends — Corporation tax — Group taxation (French intégration fiscale) — Tax exemption for dividends paid by subsidiaries belonging to the tax-integrated group — Residence qualification — Dividends paid by non-resident subsidiaries — Non-deductible costs and expenses relating to the holding’

Summary — Judgment of the Court (Second Chamber), 2 September 2015

1. Freedom of establishment — Tax legislation — Corporation tax — National legislation allowing resident parent companies to form a single tax entity with their resident subsidiary — Exclusion of non-resident subsidiaries if their profits are not subject to the fiscal legislation of the Member State of the parent company — Justification — Balanced allocation of the power to impose taxes between the Member States

   (Arts 49 TFEU and 54 TFEU)

2. Freedom of establishment — Tax legislation — Corporation tax — National legislation providing for full exemption of dividends paid by subsidiaries under a tax integration regime reserved to resident companies alone — Partial exemption of dividends paid by non-resident subsidiaries unable to belong to such a group — Not permissible — Justification — None

   (Art. 49 TFEU, Council Directive 90/435)

3. Approximation of laws — Common system of taxation applicable in the case of parent companies and subsidiaries of different Member States — Directive 90/435 — Article 4(2) — Member States’ option to provide for the non-deductibility from the parent company’s taxable profits of any charges relating to the holding and any losses resulting from the distribution of the profits of the subsidiary — Limit — Obligation to comply with the fundamental provisions of the Treaty, including Article 49 TFEU

   (Art. 49 TFEU; Council Directive 90/435, Art. 4(2))

1.  See the text of the decision.

   (see paras 25-27)

2.  Article 49 TFEU must be interpreted as precluding rules of a Member State that govern a tax integration regime under which a tax-integrated parent company is entitled to neutralisation as regards the add-back of a proportion of costs and expenses, fixed at 5% of the net amount of the dividends received by it from tax-integrated resident companies, when such neutralisation is refused to it under those rules as regards the dividends distributed to it from subsidiaries located in another Member State, which, had they been resident, would have been eligible in practice, if they so elected.

   Unlike cases in which the residence condition as a condition of access to a tax integration scheme is justified taking into account the fact that such a scheme allows losses to be transferred within the tax-integrated group, in the case of tax advantages other than the transfer of losses within the tax-integrated group, such a difference in treatment cannot be justified by the need to safeguard the balanced allocation of the power to impose taxes between the Member States. That difference in treatment concerns only incoming dividends, received by resident parent companies, so that what is concerned is the fiscal sovereignty of one and the same Member State.

   Furthermore, in so far as it is not possible to identify any direct link between that advantage and a tax disadvantage resulting from the neutralisation of intra-group transactions, such an advantage also cannot be justified by the need to safeguard the cohesion of the tax system of the Member State concerned. Even if the neutralisation of the add-back of the proportion of costs and expenses results from the fact that the group comprising the parent company and its subsidiaries is treated in the same way as a single undertaking with a number of establishments, that neutralisation does not entail any tax disadvantage for the parent company at the head of the tax-integrated group; on the contrary, it confers on it that tax advantage.

   (see paras 27-29, 34-36, 40, operative part)

3.  See the text of the decision.

   (see para. 39)