CJEU C-386/14: Freedom of Establishment – Groupe Steria

By Robert Robillard - 8 September 2015

This blogpost originally appeared on rbrt.ca.

Cette jurisprudence sur la liberté d’établissement dans l’Union européenne est aussi disponible en français ici.

In the case C-386/14, the Court of Justice of the European Union takes position on a request “made in proceedings between Groupe Steria SCA and the ministère des Finances et des Comptes publics (Ministry of Finance and Public Accounts) concerning the latter’s refusal to repay to Groupe Steria a proportion of the corporation tax and additional related amounts paid in respect of the tax years 2005 to 2008. The tax reclaimed is that levied on the proportion of costs and expenses added back to its profits and incurred in respect of dividends received from its subsidiaries which are established in Member States other than France.”

The court’s decision on the matter is as follow:

 “14. Article 49 TFEU requires the abolition of restrictions on the freedom of establishment. Therefore, even though, according to their wording, the provisions of the FEU Treaty on freedom of establishment are directed to ensuring that foreign nationals and companies are treated in the host Member State in the same way as nationals of that State, they also prohibit the Member State of origin from hindering the establishment in another Member State of one of its nationals or of a company incorporated under its legislation (judgment in X, C‑686/13, EU:C:2015:375, paragraph 27 and the case-law cited).

15. It is apparent from the Court’s case-law that freedom of establishment is hindered if, under a Member State’s legislation, a resident company having a subsidiary or a permanent establishment in another Member State suffers a disadvantageous difference in treatment for tax purposes compared with a resident company having a permanent establishment or a subsidiary in the first Member State (see judgment in Nordea Bank Danmark, C‑48/13, EU:C:2014:2087, paragraph 19 and the case-law cited).

[…]

40. It follows from all the foregoing considerations that the answer to the question raised is that Article 49 TFEU must be interpreted as precluding rules of a Member State that govern a tax integration regime under which a tax-integrated parent company is entitled to neutralisation as regards the add-back of a proportion of costs and expenses, fixed at 5% of the net amount of the dividends received by it from tax-integrated resident companies, when such neutralisation is refused to it under those rules as regards the dividends distributed to it from subsidiaries located in another Member State, which, had they been resident, would have been eligible in practice, if they so elected.”

The complete case is available here.

In French, the Court concluded:

“2. Cette demande a été présentée dans le cadre d’un litige opposant Groupe Steria SCA au ministère des Finances et des Comptes publics au sujet du refus de ce dernier de restituer à cette société une fraction de l’impôt sur les sociétés et des contributions additionnelles à cet impôt acquittée au titre des exercices fiscaux clos des années 2005 à 2008 et correspondant à l’imposition de la quote-part de frais et charges réintégrée dans ses résultats à raison des dividendes perçus de ses filiales établies dans des États membres autres que la France.

[…]

40. Il résulte de l’ensemble des considérations qui précèdent qu’il convient de répondre à la question posée que l’article 49 TFUE doit être interprété en ce sens qu’il s’oppose à une législation d’un État membre relative à un régime d’intégration fiscale en vertu de laquelle une société mère intégrante bénéficie de la neutralisation de la réintégration d’une quote-part de frais et charges forfaitairement fixée à 5 % du montant net des dividendes perçus par elle des sociétés résidentes parties à l’intégration, alors qu’une telle neutralisation lui est refusée, en vertu de cette législation, pour les dividendes qui lui sont distribués par ses filiales situées dans un autre État membre qui, si elles avaient été résidentes, y auraient été objectivement éligibles, sur option.”

CJEU C-386/14 (Freedom of establishment – Groupe Steria)

Robert Robillard, Ph.D., CPA, CGA, Adm.A., MBA, M.Sc. Econ., M.A.P.
Senior Partner, RBRT Inc.
514-742-8086; robertrobillard “at” rbrt.ca
www.rbrt.ca

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