Germany criticizes EU ruling on dividends 06/03/2007 00:00

6 March 2007

Berlin (dpa) - Finance Minister Peer Steinbrueck criticized a decision the European Court of Justice on Tuesday that could force Germany to pay back 5 billion euros (6.5 billion dollars) in taxes.

The European Union's highest court ruled that Germany violated EU law by granting income tax credits for dividends earned from German companies but not from elsewhere in the EU.

Steinbrueck said the ruling would have "serious economic consequences," for Germany.

The court ruling applied to German tax legislation that was in effect from 1977 to 2001 when holders of shares in German companies were given a tax credit when declaring dividends they received.

The court said that in omitting foreign companies from the scheme, Germany blocked the free movement of capital within the EU.

The European court was ruling on a case brought by the heirs of German man who received dividends from companies in the Netherlands and Denmark.

DPA

Subject: German news