The European Commission has referred Spain to the ECJ over its real estate tax rules, while Denmark has been formally requested to amend its law on the taxation of dividends distributed to foreign “investment institutes”.

Under Spanish tax law capital gains from the sale of a permanent residence are tax exempt if the proceeds are used to buy another permanent residence. However, this provision only applies to Spanish residents. The Commission considers this treatment to be an obstacle to free movement of persons, workers and self-employed persons and therefore breaches the EU Treaties and has referred Spain to the ECJ.

In Denmark, dividends distributed to certain types of funds registered as “investment institutes with minimum taxation” are exempt from tax, but only if the institute is Danish. The Commission considers that the Danish tax rules discriminate against “investment institutes with minimum taxation” from other Member States. This breaches the freedom to provide services and the free movement of capital as set out in the EU Treaties in the Commission's view.

For full details of the Commission's April infringements package are available on the website.