Post by Ivan Mastrototaro

Comparability does not imply identity. That is the thought running through the Opinion delivered on 18 June 2026 by Advocate General Richard de la Tour in case C-241/25, Société Générale, a Swedish referral now before the Grand Chamber of the Court of Justice. The terrain is familiar since Sofina (C-575/17): a loss-making non-resident company suffers withholding tax on dividends that a loss-making resident company would not currently pay. Sweden responded in 2020 with a deferral mechanism, but on one condition: the foreign shareholder must prove its loss by recomputing it under Swedish tax rules. Here lies the point worth pausing on For the Advocate General, requiring the non-resident to redo its accounts in the "fiscal grammar" of the source State means treating it as if it were a resident, which goes beyond the objective comparability the case law demands and imposes a burden Article 63 TFEU does not tolerate. What makes the reasoning persuasive is that the line was drawn by the Treaty itself. Article 65(1)(a) TFEU allows Member States to draw distinctions between resident and non-resident taxpayers where they are not objectively in the same situation, while Article 65(3) prevents such distinctions from becoming arbitrary discrimination or disguised restrictions on the free movement of capital. By taxing the non-resident's dividend, the source State places the non-resident and the resident in a comparable position for the purposes of that taxation (Credit Suisse Securities, C‑601/23). Equal treatment, in other words, is owed to the taxpayer's actual position, not to its translation into someone else's tax code. Discrimination, indeed, can also arise through "the application of the same rule to different situations" (Schumacker, C-279/93). Full analysis and some practical implications in our Focus Alert with Luigi Belluzzo and Gary Ashford: https://lnkd.in/dGxVJ5Te