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Portugal Tax on Collective Investors Justified: EU Court Adviser

May 7, 2021, 5:05 PM

Portugal is within EU law to apply different tax rules to collective investment undertakings formed under Portuguese law and those established in another country, an adviser to the bloc’s top court said Thursday.

European Union law prohibits all restrictions on the movement of capital between member countries of the 27-member bloc.

But this doesn’t conflict with national legislation that levies withholding tax on dividends distributed to nonresident collective investment undertakings—provided these undertakings don’t pay corporate income tax in the country of their incorporation, according to Juliane Kokott, an advocate general to the Court of Justice of the European Union. ...