ECJ – Recent Developments in Direct Taxation 2014

I. S. 32Introduction

In this paper I will discuss two pending cases regarding French tax law. The first case involves the compatibility with Regulation (EEC) 1408/71, of French “social levies” which are applied both on employment income as well as on capital income earned by French residents. The second case relates to group taxation and raises the question whether a full dividend exemption which is only available to French consolidated groups infringes the freedom of establishment.

II. The Gérard de Ruyter case (C-623/13)

A. Facts and Legal Background

Mr. de Ruyter is a French tax resident. He works for a Dutch company which has no permanent establishment in France and is subject to social contributions in the Netherlands. Mr. de Ruyter is paid a salary, but he also receives income from life annuities which seem to have borne social contributions in the Netherlands. The income from these life annuities has also been subject to French “social levies” called “CSG” (“contribution sociale généralisée”), CRDS (“contribution au remboursement de la dette sociale”) and “prélèvement social”. Mr. de Ruyter claims that by subjecting capital income to “social levies” where an individual is already sub...