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Kronos International Inc v Finanzamt Leverkusen Case C-47/12, Court of Justice of the European Union
The taxpayer was a US company managed in Germany, and the holding company of a group based in Canada and other European countries. It requested that corporation tax paid by subsidiaries be offset against its liability in Germany.
The local tax authorities refused on the basis foreign dividends were exempt from tax under German law and could not be taken into account as taxable income.
The taxpayer appealed.
The matter was referred to the Court of Justice of the European Union, which found that a company receiving foreign dividends was not a comparable situation to that of receiving nationally-sourced dividends.
The reason was that Germany had waived its right to tax foreign dividends and could not be required to reimburse a sum originating in the tax system of another country.
