In Margaretha Bouanich v Directeur des Services Fiscaux de la Drôme (C-375/12 – 13 March) Ms Bouanich was tax resident in France and held shares in a company listed in Sweden. The so-called ‘tax shield’ applicable under French law which capped tax at 60% or 50% of income received during a tax year did not take into account tax paid in Sweden. The CJEU held that this was contrary to the principles of freedom of movement of capital and of establishment (TFEU arts 49 and 63).
Under the Franco-Swedish double tax agreement the dividends Ms Bouanich received from Sweden were subject to withholding tax in Sweden and the French tax authorities included the Swedish dividends in her taxable base. Then after calculating the gross amount of income tax by applying the progressive scale to the taxable base the French tax authorities set against that...
