ECJ Rules Again Against Dutch Exit Tax In European Commission Vs Netherlands (C301/11)

In the ECJ's decision in Commission v. Netherlands (C-301/11) of the 31 January 2013, the ECJ held that the exit tax on unrealized gains on companies and entities redomiciling from the Netherlands is in breach of the freedom of establishment. This decision was delivered in the case European Commission vs Netherlands and draws of the proportionality test set out in the ECJ's decision in National Grid Indus reported in this website (National Grid Indus v. Inspecteur van de Belastingdienst Rijnmond, C-371/10).

The ECJ deemed the Dutch exit tax a violation of that freedom in , The ECJ held that while an exit tax may be justified to ensure a balanced allocation of taxing rights between Member States, the immediate imposition, under Dutch law, of an exit tax is disproportional. The tax is triggered by reason of the  shift of a businsess' place of management from the Netherlands to another (including another MS or EEA country) and is charged on the unrealized profits