Lower Court of Haarlem: Withholding tax on dividends paid by Dutch subsidiary to Canadian parent company compatible with EC law

On 27 March 2009, the Lower Court of Haarlem gave its decision in the case No. AWB 07/5534 concerning the compatibility of the withholding tax on dividends paid to a Canadian parent company with the free movement of capital (Art. 56 of the EC Treaty).

(a) Facts. The taxpayer was a company formed under Dutch law with its effective management in the Netherlands. In 2005, the taxpayer held participations in 12 foreign companies, i.e. a 100% participation in 9 com…