Keywords
Summary

Keywords

Free movement of capital – Restrictions

(EC Treaty, Art. 73b(1) (now Art. 56(1) EC))

Summary

Article 73b(1) of the EC Treaty (now Article 56(1) EC) does not preclude legislation of a Member State, such as Belgian tax legislation, which, in the context of tax on income, makes dividends from shares in companies established in the territory of that State and dividends from shares in companies established in another Member State subject to the same uniform rate of taxation, without providing for the possibility of setting off tax levied by deduction at source in that other Member State.

In circumstances such as those of the present case, the adverse consequences which might arise from the application of an income tax system such as the Belgian system at issue in the main proceedings result from the exercise in parallel by two Member States of their fiscal sovereignty. Community law, in its current state and in a situation such as that in the main proceedings, does not lay down any general criteria for the attribution of areas of competence between the Member States in relation to the elimination of double taxation within the Community. Consequently, it is for the Member States to take the measures necessary to prevent double taxation situations by applying, in particular, the apportionment criteria followed in international tax practice in the context of double taxation conventions.

(see paras 20-24, operative part)