Matheson US Offices Update

ECJ case may prompt change to taxation of dividends

The European Court of Justice (ECJ) recently delivered its judgment in the long running FII Litigation Group case.  The decision may impact on how future dividends received by an Irish company from an EU resident company are taxed in Ireland. The ECJ ruled that the UK's historic discriminatory treatment of dividends received from non-UK subsidiaries was contrary to EU law, on the basis that domestic dividends were treated as franked investment income (FII) and therefore exempt.   Current Irish rules still recognise a distinction between dividends received from another Irish resident company (which are exempt) and dividends received from companies resident outside of Ireland (taxable).  The attached article provides a summary of the decision and its likely impact on the taxation of dividends in Ireland.