The ECJ gave its decision in the Amurta case that the Netherlands withholding tax on outbound dividends is incompatible with freedom of movement of capital.

It was held that EU Law precludes legislation of the Netherlands which, where the minimum threshold set out in Parent-Subsidiary Directive is not reached, provides for a withholding tax on dividends distributed by a company in the Netherlands to a company in another Member State, while exempting from that withholding tax dividends paid to a company liable to corporation tax in the Netherlands.

In addition, the existence of a full tax credit granted under a Tax Treaty could not be relied on to escape obligations under the European Treaty.