Fiscal Cohesion in the Taxation of Cross-Border Dividends (Part Two)

The taxation of dividends is characterized by the fact that the taxable object stems from profits that will usually have already been taxed at the level of the distributing company. If the second layer of taxation at the shareholder level constitutes economic double taxation, to what extent, if at all, such double taxation should be avoided, and how this could be done, are key questions that are inseparably tied to any form of corporate tax. Following Part One published in European Taxation 2004, 323; this paper focuses on the possibility to justify the restriction on free movement caused by the detrimental tax treatment of cross-border dividends by the fiscal cohesion of the corporate tax system in question under EC law