15.8.2008

Official Journal of the European Union

C 209/4

(Case C-284/06)

(Tax legislation - Freedom of establishment - Directive 90/435/CEE - Corporation tax - Common system of taxation applicable in the case of parent companies and subsidiaries of different Member States - Company with a share capital - Distribution of revenue and of increases in share capital - Withholding tax - Tax credit - Treatment of resident shareholders and non-resident shareholders)

(2008/C 209/05)

Language of the case: German

Referring court

Parties to the main proceedings

Applicant: Finanzamt Hamburg-Am Tierpark

Defendant: Burda GmbH, formerly Burda Verlagsbeteiligungen GmbH

Re:

Reference for a preliminary ruling — Bundesfinanzhof (Germany) — Interpretation of Article 5(1) 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 (OJ 1990 L 225, p. 6), now Article 5 in the version as amended by Council Directive 2003/123/EC of 22 December 2003 amending Directive 90/435/EEC on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States (OJ 2004 L 7, p. 41) — Concept of withholding tax — National law providing that, where profits are distributed by a subsidiary to its parent company, income and asset increases of the capital company are to be taxed, even though they would not be taxed if they remained with the subsidiary — Interpretation of Articles 43 EC, 56 EC and 58 EC — National law providing for set-off arrangements for the distribution of profits by a capital company using its own capital, resulting in taxation even where dividends are distributed to non-resident shareholders which are unable to set off the corporation tax against their own tax liability

Operative part of the judgment

1.A provision of national law which, in relation to cases where profits are distributed by a subsidiary to its parent company, provides for the taxation of income and asset increases of the subsidiary which would not have been taxed if they had remained with the subsidiary and had not been distributed to the parent company does not constitute withholding tax within the meaning of Article 5(1) 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.

2.Article 52 of the Treaty (now, after amendment, Article 43 EC) must be interpreted as not precluding the application of a national measure, such as Paragraph 28(4) of the Law on Corporation Tax 1996 (Körperschaftsteuergesetz 1996), in the version applicable to the facts of the main proceedings, under which the taxation of profits distributed by a subsidiary resident in a Member State to its parent company is subject to the same corrective mechanism regardless of whether the parent company is resident in the same Member State or in another Member State even though — unlike a resident parent company — a non-resident parent company is not granted a tax credit by the Member State in which the subsidiary is resident.

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(1) OJ C 237, 30.9.2006.