The European Commission has launched infringement procedures against Germany, France and Italy, saying their tax treatment of dividends from subsidiaries in other EU Member States breaches the Parent-Subsidiary Directive, as part of a wider July 2026 enforcement package covering 11 policy areas.
The European Commission has opened infringement procedures against Germany, France and Italy over national rules governing the taxation of dividends received from subsidiaries in other EU Member States, saying the legislation is incompatible with the Parent-Subsidiary Directive.
The action is part of the Commission’s July 2026 infringements package, published on 7 July 2026, which sets out legal measures across 11 policy areas to strengthen compliance with EU law.
Dividend taxation under scrutiny
The Commission has sent letters of formal notice to Germany (INFR(2026)2089), France (INFR(2026)2087) and Italy (INFR(2026)2088), arguing that their tax legislation allows dividends received by parent companies from subsidiaries established in other Member States to be taxed multiple times beyond what is permitted under the Parent-Subsidiary Directive.
According to the Commission, these national rules fragment the common company taxation framework established by the Directive and create barriers for mid-sized and larger businesses operating across the Single Market. The Commission said the additional taxation has a negative impact on competitiveness and investment.
The cases form part of the Commission’s enforcement efforts to remove barriers in the Single Market, as outlined in the Communication “A simpler, clearer and better enforced EU Rulebook” (COM(2026) 380 final, Annex II).
Germany, France and Italy have two months to respond to the letters of formal notice and address the issues identified by the Commission. If their responses are not considered satisfactory, the Commission may issue reasoned opinions.
Environmental and climate measures
The July 2026 infringements package also includes a range of environmental actions. Latvia, Lithuania, Hungary and Slovakia received letters of formal notice for failing to correctly transpose the Drinking Water Directive, which is intended to protect human health from pollutants, including microplastics.
France was also cited for failing to comply with the Urban Waste Water Treatment Directive, with the Commission identifying 518 agglomerations that do not meet the required standards.
On waste management, 12 Member States, including Germany, Greece and Poland, were urged to achieve municipal and packaging waste recycling targets. Slovakia received a reasoned opinion over the Single-Use Plastics Directive for failing to ensure producers bear the costs of litter clean-up.
In the climate area, Greece received a letter of formal notice for failing to mutually recognise certificates for fluorinated greenhouse gas (F-gas) technicians.
Internal market and financial services
The Commission referred Hungary to the Court of Justice of the European Union (CJEU) over discriminatory price margin restrictions on food and drugstore products. Hungary also received a letter of formal notice for failing to comply with an earlier court judgment concerning an additional mining fee on construction materials.
Romania was referred to the CJEU over persistent late payments by its National Health Insurance House to pharmacies. Belgium received a letter of formal notice for failing to comply with a previous judgment on late payments in the Walloon Region.
In cybersecurity, Ireland, Spain, France and the Netherlands were referred to the CJEU for failing to transpose the NIS2 Directive. Spain, France and Latvia also received notifications for failing to comply with the Digital Operational Resilience Act (DORA).
Justice, employment and social rights
Eight Member States, including Czechia and Finland, were asked to align national legislation with the Transparent and Predictable Working Conditions Directive.
Six countries, including Greece, Spain and Poland, received reasoned opinions over failures to implement measures protecting workers from asbestos exposure.
Belgium, Poland and four other Member States received letters of formal notice for incorrectly transposing the Law Enforcement Directive on data protection rights.
Slovenia received a second additional letter of formal notice after introducing mandatory grounds for refusing a European Arrest Warrant that are not provided for under EU law.
Fisheries and anti-fraud actions
Italy and Portugal came under scrutiny for failing to meet obligations under the Fisheries Control Regulation, particularly regarding data validation and cross-checking systems.
Cyprus received a letter of formal notice for failing to provide the European Anti-Fraud Office (OLAF) with bank account information required during investigations.
Broader enforcement package
The Commission said the July 2026 infringements package represents a broad set of enforcement actions to ensure the correct application of EU law. The measures span 11 policy areas and include different stages of infringement proceedings, ranging from letters of formal notice to referrals to the Court of Justice of the European Union.
