Taxation of Cross-Border Dividends Paid to Individuals from an EU Perspective Positive and Negative Integration

This book is the first in-depth study to analyze the circumstances in which the freedom of establishment or free movement of capital may apply to the cross-border distribution of dividends. It covers both the positive integration set forth by the European Commission and the Member States and the negative integration developed by the European Court of Justice. The author discusses such elements of these integration measures as the following:

• economic double taxation (two different subjects pay tax on the same profit);

• juridical double taxation (two different states tax one and the same person for the
• same income);

• exemption, credit, and other techniques adopted by States to avoid double taxation;

• division of taxing rights between two States with respect to dividend income;

• prevention of juridical double taxation by bilateral tax conventions;

• Member States’ mitigation of economic double taxation;

• double exemption as an unplanned outcome of double taxation prevention measures;
• and

• order of precedence between freedom of establishment and free movement of
• capital.

The analysis treats relevant provisions the OECD Model Tax Convention in detail, as this model is widely used by national tax authorities in connection with international taxation of dividends. It also examines pertinent initiatives launched by the European Commission up to and including its consultation paper of January 28, 2011. In addition to its scrutiny of the disparities in cross-border dividend taxation within the European Union, this book stands out for its detailed coverage of the progress made in resolving these challenging taxation issues. It is sure to be welcomed by investors, corporate counsel, and national revenue authorities.