Exemption of inbound dividends from non-corporate taxes under the EU parent subsidiary directive – opinion statement ECJ-TF 4/2025 on the decision of the CJEU of 1 August 2025 in Banca Mediolanum (joined cases C-92/24 to C-94/24)

In this CFE Opinion Statement, submitted to the EU Institutions in November 2025, the CFE ECJ Task Force comments on the CJEU’s decision of 1 August 2025 in Banca Mediolanum (Joined Cases C-92/24 to C-94/24) concerning the application of the exemption method under article 4(1)(a) of the EU Parent-Subsidiary Directive (2011/96) (PSD) to a non-corporation tax, specifically the Italian regional tax on production activities (IRAP). Deviating from Advocate General Kokott’s Opinion and her proposed analysis of tax comparability, the Court concluded, based on a textual, contextual and teleological interpretation, that ratione materiae the exemption under article 4(1)(a) of the PSD applies to any tax that includes qualified dividends in its tax base. This is irrespective of the fact that article 2 of the PSD defines its ratione personae by reference to specifically listed domestic corporate taxes, of which the IRAP is not one.