(October 9, 2014)
On October 9, 2014 the European Court of Justice (ECJ) ruled in case C-326/12 Rita van Caster and Patrick van Caster versus Finanzamt Essen-Süd (ECLI:EU:C:2014:2269).
The following question was referred to the ECJ for a preliminary ruling:
Does the flat-rate taxation of income from so-called non-transparent (domestic and) foreign investment funds under Paragraph 6 of [the InvStG] infringe EU law [Article 63 TFEU] because it amounts to a disguised restriction on the free movement of capital [Article 65(3) TFEU]?
The ECJ ruled as follows:
Article 63 TFEU must be interpreted as precluding national legislation such as that at issue in the main proceedings which provides that the failure by a non-resident investment fund to comply with the obligations to communicate and publish certain information required by that legislation, which are applicable without distinction to resident and non-resident investment funds alike, resulting in the flat-rate taxation of the income which the taxpayer earns from that investment fund, since that legislation does not allow the taxpayer to provide evidence or information that could prove the actual size of that income.
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