Withholding taxes, losses and territoriality: Opinionstatement ECJ-TF 3/2025 on the decision of the CJEU of 19 December 2024 in Credit Suisse Securities (Europe) Ltd v. Diputación Foral de Bizkaia Case (C-601/23)

This is an Opinion Statement prepared by the CFE ECJ Task Force on the Credit Suisse-case, in which the Sixth Chamber of the Court of Justice of the EU (ECJ) delivered its decision on 19 December 2024. The Court held that the imposition of Spanish dividend withholding tax violated the freedom of capital movement considering the non-resident’s overall loss situation. The Sofina ruling caused great astonishment among experts: Based on the free movement of capital, the CJEU ruled that corporations receiving dividends from another EU country must be refunded the withholding tax in that other EU country if they suffer losses in their country of residence, even if these losses are unrelated to the dividends: The CJEU had demanded equal treatment with dividends received by companies resident in the same EU country. In the event of a loss, the tax levied on the dividends is refunded. In the Credit Suisse case, more or less the same legal questions were brought before the CJEU again. The CJEU was able to show whether Sofina was an "outlier" and whether it was withdrawing the position it had taken there. It also had the opportunity to address the criticism against Sofina.