29.8.2009   

EN

Official Journal of the European Union

C 205/13

(1)

Article 4(1), first indent, of 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 must be interpreted as meaning that it precludes legislation of a Member State which, for the purposes of the exemption of the dividends received by a parent company established in that State from a subsidiary with its seat in another Member State, provides that those dividends are included in the basis of assessment of the parent company and 95 % of those dividends are subsequently deducted, in so far as, during the taxable period concerned, a profit remains after deduction of the other exonerated dividends, with the consequence that:

(2)

Article 4(1), first indent, of Directive 90/435, read in combination with Article 4(2) thereof, must be interpreted as meaning that it does not oblige Member States necessarily to allow profits distributed to a parent company established in that State by its subsidiary with its seat in another Member State to be wholly deductible from the profits of the taxable period of the parent company and that it be possible for the resulting loss to be carried forward to a subsequent taxable period. It is for the Member States to estalbish, taking account both of the needs of their domestic legal system and the option provided for in Article 4(2), the method by which the result prescribed in Article 4(1), first indent, is achieved.

However, where a Member State has chosen the exemption system provided for in Article 4(1), first indent, of Directive 90/435 and, in principle, the legislation of that Member State allows losses to be carried forward to subsequent taxable periods, that provision precludes legislation of a Member State which has the effect of limiting, to the amount of the dividends received, the losses of the parent company which may be carried forward.

(3)

Where, in regulating purely internal situations, domestic legislation adopts the same solutions as those adopted in Community law, it is for the national court alone, pursuant to the allocation of judicial functions between national courts and the Court of Justice under Article 234 EC, to assess the precise scope of that reference to Community law, consideration of the limits which the national legislature may have placed on the application of Community law to purely internal situations being a matter for the law of the Member State concerned and consequently falling within the exclusive jurisdiction of the courts of that Member State.

(4)

Where, under the national legislation of a Member State, dividends originating from a company established in a non-Member State are entitled to less favourable treatment than those from a company with its seat in that Member State, it is for the national court, taking account both of the purpose of the national legislation and of the facts of the case before it, to ascertain whether Article 56 EC is applicable and, if so, whether it precludes the different treatment.

(5)

Article 43 EC does not preclude the legislation of a Member State which provides that a parent company established in a Member State and receiving profits distributed by its subsidiary with its seat in another Member State may deduct those profits from its taxable income only up to the amount of the profits of the taxable period during which the profits were distributed, whereas a full exemption of the distributed profits would be possible if that company had set up a permanent establishment in that other Member State, on condition that profits from entities set up in another Member State are not treated in a manner that is discriminatory in comparison with the treatment granted to profits from comparable national entities.