The European Court of Justice has ruled that member states must not discriminate between residents and non residents in their treatment of share repurchases.
The case - known as the Bouanich case - concerns France and Sweden, but the ruling applies to all member states and extends the principle that member states must not discriminate between nationals and citizens of another member state to cover share repurchases as well as dividends.
Margaretha Bouanich is resident in France but held shares in the Swedish company Frvaltnings AB Ratos, which repurchased its class B shares in December 1998. Ms Bouanich received '917,000 for her shares.
Although there was no dispute that tax was payable in Sweden - under a agreement between the two countries -Swedish law treats residents and non-residents dif...