J.B.G.T. Miljoen and Others v Staatssecretaris van Financiën.

• Jurisdiction: European Union
• Celex Number: 62014CJ0010
• ECLI: ECLI:EU:C:2015:608
• Docket Number: C-14/14,C-17/14,C-10/14,
• Date: 17 September 2015
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling

JUDGMENT OF THE COURT (Third Chamber)

17 September 2015 ( *1 )

‛Reference for a preliminary ruling — Direct taxation — Articles 63 TFEU and 65 TFEU — Free movement of capital — Taxation of dividends from portfolios of shares — Withholding tax — Restriction — Final tax burden — Factors for comparing the tax burdens of resident and non-resident taxpayers — Comparability — Taking into account income tax or corporation tax — Conventions for the avoidance of double taxation — Neutralisation of the restriction by means of a convention’

In Joined Cases C‑10/14, C‑14/14 and C‑17/14,

REQUESTS for a preliminary ruling under Article 267 TFEU from the Supreme Court (Hoge Raad der Nederlanden, Netherlands), made by decisions of 20 December 2013, received at the Court on 13 January 2014, 15 January 2014 and 16 January 2014, in the proceedings

J. B. G. T. Miljoen (C‑10/14),

X (C‑14/14),

Société Générale SA (C‑17/14)

v

Staatssecretaris van Financiën,

THE COURT (Third Chamber),

composed of A. Ó Caoimh (Rapporteur), acting as President of the Third Chamber, K. Lenaerts, Vice-President of the Court, acting as a Judge of the Third Chamber, C. Toader, E. Jarašiūnas and C.G. Fernlund, Judges,

Advocate General: N. Jääskinen,

Registrar: M. Ferreira, Principal Administrator,

having regard to the written procedure and further to the hearing on 18 March 2015,

after considering the observations submitted on behalf of:

— Mr Miljoen, by E. Nijkeuter,

— X, by N. de Haan, G. Meussen and S. Baum-Sillé, advocaten,

— Société Générale SA, by M. Sanders and A. Breuer, advocaten,

— the Netherlands Government, by M. Bulterman, M. Gijzen and M. de Ree, acting as Agents, and by I. Siemonsma and H. Guiljam,

— the German Government, by T. Henze and K. Petersen, acting as Agents,

— the Swedish Government, by A. Falk C. Meyer-Seitz, U. Persson, N. Otte Widgren, K. Sparrman, L. Swedenborg, E. Karlsson and F. Sjövall, acting as Agents,

— the United Kingdom Government, by J. Beeko, acting as Agent, and by S. Ford, Barrister-at-Law,

— the European Commission, by W. Roels and A. Cordewener, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 25 June 2015,

gives the following

Judgment

1 These requests for a preliminary ruling concern the interpretation of Article 63 TFEU.

2 The references have been made in proceedings between Mr Miljoen, X and Société Générale SA (‘Société Générale’) and the Staatssecretaris van Financiën (State Secretary for Finance), concerning withholding tax levied by that authority on Netherland-sourced dividends distributed to the appellants in the main proceedings.

Legal context

Netherlands law

The Law on the taxation of dividends

3 Article 1 of the Law on the taxation of dividends (Wet op de dividendbelasting), in the version applicable to the facts in the main proceedings, is worded as follows: ‘1. Under the name of “tax on dividends”, a direct tax shall be charged on persons who — directly or by means of certificates — receive income from shares in, dividend-right certificates of and loans, as referred to in Article 10(1)(d) of the Corporation Tax Law of 1969 [Wet op de Vennootschapsbelasting 1969 (‘the Corporation Tax Law’], from public limited liability companies, private limited liability companies, limited partnerships and other companies established in the Netherlands whose capital is wholly or partially divided into shares.’ 2. For the purposes of applying the present law, the certificates of ownership of unit trusts referred to in Article 2(3) of the [the Corporation Tax Law] shall be treated as shares in companies whose capital is wholly or partially divided into shares, and the trusts shall be treated as companies. ...’

4 Under Article 5 of the Law on the taxation of dividends, that tax is charged at 15% of the yield.

5 Article 10(1) of that law provides: ‘A legal person established in the Netherlands and not subject to corporation tax may ask the tax inspector to take a decision, against which a complaint may be lodged, to reimburse the dividend tax withheld during a calendar year ...’

The IT Law 2001

6 The Income Tax Law of 2001 (Wet Inkomstenbelasting 2001), in the version applicable to the main proceedings (‘IT Law 2001’), defines the rules governing personal income tax.

7 Article 2.13 of that law sets at 30% the rate of taxation on income from savings and investments, income which falls within the category of taxable income classified in ‘box 3’ or ‘heading 3’.

8 Article 5.1 of that law states that the taxable income from savings and investments is made up of ‘the benefit derived from savings and investments, minus the personal deduction’.

9 Under Article 5.2 of the IT Law 2001, the yield from savings and investments is set at a flat rate of 4% on the average of the yield basis at the start of the calendar year and the yield basis at the end of the calendar year in so far as that average is greater than the tax-free allowance for capital assets.

10 Article 5.3(1) of the IT Law 2001 provides that the yield basis is ‘the value of the assets less the value of the liabilities’. In Article 5.3(2) of the IT Law 2001, assets are defined as: ‘a. immovable property; b. rights relating directly or indirectly to immovable property; c. movable property not used or consumed for personal purposes by the taxpayer or persons forming part of his household, and movable property used or consumed for personal purposes, but which nevertheless serves primarily as an investment; d. rights in movable property; e. rights in intangible property, such as money; f. other property rights which have a market value.’

11 It is stipulated in Article 5.3(3) of the IT Law 2001 that ‘liabilities are obligations which have a market value’.

12 Article 5.5 of the IT Law 2001, entitled ‘Tax-free capital allowance’, provides in paragraph 1 that the tax-free allowance for capital assets is EUR 20014. Paragraphs 2 to 4 of that article adjust that rule in the specific case of a taxpayer who has a partner.

13 Article 5.19(1) of the IT Law 2001, relating to the valuation of assets and liabilities, states that these are to be taken into consideration at their market value.

14 Article 7.1 of the IT Law 2001 provides: ‘For a foreign taxpayer, income tax shall be levied on: ... b. taxable income from a material interest in a company established in the Netherlands, and ... which he received during a calendar year.’

15 Article 9.2 of the IT Law 2001, relating to prepayments which can be charged, provides in paragraph 1 that, for resident taxpayers, the tax on dividends is a prepayment. Paragraph 8 of that article provides that, for foreign taxpayers, ‘the tax on dividends levied on items which make up the overall income shall be treated as a prepayment’.

The Corporation Tax Law

16 Under Article 17(3)(a) of the Corporation Tax Law, in the version applicable to the main proceedings, Netherlands income is the sum total of the taxable profits from a Netherlands undertaking, that is to say all the benefits derived from an undertaking or part of an undertaking operated in a permanent establishment in the Netherlands or through a permanent representative established in the Netherlands (Netherlands undertaking).

17 Article 25 of that law is worded as follows: ‘1. Withholding taxes shall mean the tax levied on dividends, with the exception of the tax levied in accordance with Article 12(1) of the [Law on the taxation of dividends] and the tax levied on the winnings from games of chance, in so far as those taxes are levied on the returns or winnings which are not part of taxable profits or Netherlands income for the year. 2. Notwithstanding the provisions of paragraph 1, the tax on dividends shall not be taken into account as a withholding tax where the taxpayer from whom the tax on dividends is withheld is not also the actual beneficiary of the yield from which the tax on dividends is withheld. A person who, in the context of the yield of which he is the beneficiary, provided consideration as part of a series of transactions shall not be considered to be the actual beneficiary, in which case it may be assumed that: a. the income benefited, totally or partially, directly or indirectly, a natural or legal person who is less entitled to a reduction, reimbursement or offsetting of the tax on dividends than the person who provided the consideration; and that b. that natural or legal person retains or obtains, directly or indirectly, a position in shares, dividend rights certificates or loans referred to in Article 10(1)(d) of the [Corporation Tax Law] comparable to the position which he held in those shares, participation certificates or loans before the beginning of the series of transactions. 3. For the purposes of paragraph 2: a. there can also be a series of transactions where the transactions are carried out on a regulated market for the purposes of Article 1(1) of the Law on financial supervision or on a regulated stock exchange located or active in a non-Member State of the European Union; b. a transaction concerning the mere purchase of one or more dividend coupons or the creation of short-term dividend rights...