Judgment of the Court of Justice in Case C-170/05

National legislation which makes dividends received by a non-resident parent company liable to a witholding tax, while almost fully exempting dividends received by a resident parent company, restricts freedom of establishment. Freedom of establishment precludes such a withholding tax, even if a tax convention authorises the non-resident parent company to offset it against the tax due in the State in which it is resident, where that parent company is unable to offset that tax.

Denkavit Internationaal BV, Denkavit France SARL v Ministre de l'Économie, des Finances et de l'Industrie, 14 December 2006.