In van Casters v Finanzamt Essen-Süd C-326/12 – 9 October 2014 the CJEU found that the flat rate taxation of a holding in a foreign investment fund was a breach of the principle of free movement of capital due to the lack of disclosure by the fund to the tax authorities of the country of the investor.
The van Casters owned units in non-resident capital investment funds held on deposit with a Belgian bank. Because these investment funds had failed to observe certain disclosure obligations under German tax law the Casters’ holdings were taxed at a flat rate regardless of whether the value of their investment had increased or decreased.
The issue was whether the disclosure obligations – which apply without distinction to resident and non-resident funds – are compatible with the principle of free movement of capital.
The CJEU confirmed that the flat-rate tax was...
