News Share

The Tax Hub

Daily Tax Newsletter

Germany-European Union

10 April 2009

Responsive image

European Commission refers Germany to ECJ over taxation of outbound dividends

On 19 March 2009, the European Commission announced that it had decided to refer Germany to the European Court of Justice over its rules on taxation of outbound dividend payments to companies, as Germany did not comply with the Commission's reasoned opinion.

Austria and Germany tax outbound dividends (dividends paid by resident companies to non-resident shareholders) more heavily than domestic dividends (dividends paid by resident companies to resident shareholders). Domestic dividends are in practice exempt from tax, whereas outbound dividends are subject to withholding taxes ranging from 5% to 25%.

Referring to the decision of the European Court of Justice (ECJ) in the Denkavit case, the Commission observed that the higher taxation of outbound dividends is incompatible with the EC Treaty and the EEA Agreement, as it restricts the free movement of capital and the freedom of establishment. The Commission noted that the discrimination exists with respect to EU Member States and those EEA/EFTA countries, which exchange information to a sufficient extent. Taking into account the infringement procedures initiated so far, the Commission appears to follow the decision of the EFTA Court in the FoKus Bank case, which took the view that it is not relevant from the point of view of the existence of a breach if a tax credit is given in the state of residence of the shareholder. The Denkavit decision, however, may suggest the opposite.

Powerful Tax Tools


FX Rates

Global FX Rates including Tax Year Average FX Rates and Spot Rates for all Reporting Currencies.


Corporate Tax Rates

Corporate tax rates, surtaxes, and effective tax rates for the current year, as well as historical rates and approved future rates.


Country Analysis

Detailed tax guidance for companies doing business in over 100 countries, including summaries and snapshots of key tax facts and issues.


Cross Border Tax Calculator

Calculate total tax costs and benefits of a cross border transaction including withholding tax, participation exemption and foreign tax credit rules.


Cross Border Tax Rates

Provides Domestic, treaty and EU cross border tax rates for over 5,000 country combinations for 9 different payment streams.



Complete overview of the OECD BEPS Project, including daily BEPS news, country adoption of BEPS measures, and an overview of the 15 BEPS Actions.


Tax Calendar

Customizable calendar tool that tracks corporate income tax, value added tax and transfer pricing obligations by country or entity.


Tax Forms

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.


Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.


Worldwide Tax Planner

Calculates the worldwide tax cost of what-if scenarios based on legal entity structure, taxable income, and cross border transactions.


Certified Rates Report

Customizable Certified Rates Report providing updated corporate and withholding tax rates at the end of each month for over 100 countries.


Withholding Tax Minimizer

Enables quick calculation of tax costs and benefits of cross border transactions considering all possible transaction combinations and optimal routes.


VAT Rates

Provides value added tax (VAT) rates, goods and services tax (GST) rates and other indirect tax rates for over 100 countries.


NOL Calculator

Country specific calculator to determine how net operating losses can be utilized in carryback and carryforward years.


Transfer Pricing Calculator

Calculates TP ratios under various TP methods and calculates the difference between target ratios and actual ratios.


Individual Income Tax Rates

Individual tax rates for over 100 countries.

Play of the Day

Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.

We’re here to help

We’re here to answer any questions you have about the Orbitax products and services.

Send us a message

Who’s behind Orbitax?

We’re committed to providing high value, low cost tax research and management solutions.

Learn More