Clifford Chance

The CJEU judgment in Brisal – withholding tax on interest held to be contrary to EU law

14 July 2016

The Court of Justice of the European Union (CJEU) yesterday ruled that the EU fundamental freedoms preclude Member States from imposing withholding tax on interest paid to EU financial institutions, unless the financial institutions can claim a deduction for their financing costs and other expenses.

This note summarises the CJEU's decision and looks at the implications of the case, which we believe go considerably beyond its own facts. There may, in particular, now be opportunities for some taxpayers to recover withholding tax historically paid, and for taxpayers to contest the application of withholding tax on future payments.

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