The Advocate General of the Court of Justice of the European Union (CJEU) issued an opinion in two joined cases that involve profit distributions made by Dutch companies to their parent companies that are residents of Curaçao. The opinion of the Advocate General can be taken into account when the Court reaches a decision in a case but the Court is not obliged to follow the Advocate General’s opinion in its final decision.
In both cases considered by the Advocate General, the parent companies asserted that the dividend withholding tax liability was contrary to the principle of free movement of capital under the EU Treaty. This principle can in certain situations apply to transactions with non-EU parties.
It was claimed that the withholding exemption that applies if the dividend is paid to a Dutch or EU parent company could possibly also apply to a parent company resident in the former Netherlands Antilles. In both cases, this argument was rejected by the Haarlem District Court and the Amsterdam Court of Appeals.
The Advocate General of the CJEU issued an opinion advising the CJEU that the withholding tax is not permissible in every situation.
