ECJ - Recent Developments in Direct Taxation 2012

S. 41France: The Bouanich and Adiamix Cases

S. 431. Introduction

In this paper I will discuss several pending cases regarding French tax law. The first case involves the French “tax shield” which used to apply in French law and consisted in a refund of taxes which exceeded a certain ceiling, provided taxes had been paid to the French State. The second case is a State aid problem relating to an exemption from corporate income taxes that applied to companies which took over the activities of ailing businesses.

2. The Bouanich case (C-375/12)

2.1. Facts and legal background

Margaretha Bouanich is a well-known European taxpayer; the reader may recall that one ECJ decision is already named after her. In the present case, she is again arguing that a Swedish-source dividend that she received was subject to a tax regime which was inconsistent with EU law. For a change, though, her current problem arises with respect to the French tax system, not the Swedish one.

Here is the legal issue. From 2005 to 2007, Ms Bouanich was a French resident for tax purposes. She repeatedly enjoyed a distribution of dividends from a Swedish company which suffered a 15% withholding tax pursuant to the applicable tax treaty be...