The Commission has referred Belgium, Spain, Italy, the Netherlands and Portugal to the Court over discriminatory taxation of outbound dividends; and Belgium to the Court over discriminatory taxation of inbound dividends.

In addition the Commission has asked Latvia to end discriminatory taxation of outbound dividends.

These referrals have arisen from the Denkavit case (reported in Section 1.35 of the January edition of tax.point). The territories were referred as a result of their rules under which certain dividend payments to foreign companies (outbound dividends) may be taxed more heavily than dividend payments to domestic companies (domestic dividends). Ireland does not apply discriminate tax treatment between outbound dividends and domestic dividends.

The Commission has also been busy in relation to discrimination in other areas of the tax codes of some Member States (excluding Ireland and the UK).

The following is a summary of the proceedings:

Belgium: discrimination in Flemish registration tax; discriminatory taxation regarding houses outside Belgium; discrimination regarding deductions of personal and family allowances for residents with income from foreign sources.

Greece: discrimination against non-Greek partnerships.

Italy: implementation of the Interest and Royalties Directive; application of a withholding tax on dividends paid to parent companies in the Netherlands.

Portugal: discrimination against non-Portuguese service providers.

Sweden: discrimination against foreign pension funds.

Also, infringement proceedings have closed against Spain and Italy.

The Commission has concluded that the French tax scheme for “fiscal economic interest groupings” (EIGs) constitutes state aid.