Cross-border repatriation of dividends : tax neutral in the European Union?

This article deals with the proposed changes to the Parent-Subsidiary Directive. The Directive is examined in its amended form and assessed as to what extent it achieves its objectives, especially as compared to similar reliefs available under bilateral income tax treaties. The history of the Parent-Subsidiary Directive and the context in which it arose are outlined. The article finally provides observations on the reasons for the lack of success in achieving harmonization of direct tax measures compared with indirect tax measures and on the alternating strategies of the European Union in working towards harmonization of company taxation.