Triumph of form over substance?

THE EC TREATY in Articles 43 and 56 gives the right to the freedom of establishment and free movement of capital throughout Member States. Establishing exactly how those rights impinge on for example the payment of dividends across Member State borders and between companies and their subsidiaries and shareholders can be somewhat problematic. In an ideal world the application of these Articles on paying companies and their states concerned would be clear. This article aims to establish what principles can be gleaned from recent decisions of the European Court of Justice in such circumstances. Does one consider the substance of the transaction or is the form that it takes more important?

Within the space of a few months opinions have now been delivered in some four dividend taxation cases before the European Court (ECJ). Interestingly although honours are evenly shared with two...