CJEU requires actual neutralisation of tax discrimination against non-resident collective investment schemes or, where there is tax transparency, against their unitholders

The Court of Justice of the European Union has ruled in response to the Supreme Court that imposing a heavier tax burden on U.S. regulated investment companies than on resident collective investment schemes constitutes a restriction on the free movement of capital. Although such a restriction may be neutralised by the applicable double taxation treaty, that neutralisation must not be a merely theoretical possibility but must actually and fully be implemented, including with respect to the unitholders.

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