Impact of Cadbury Schweppes on CFC legislation

Further information regarding the impact of the Cadbury Schweppes decision can be obtained by contacting Philip Gershuny +44 (0) 20 7296 2724 (philip.gershuny@lovells.com) in London, Herve Israel +33 1 53 67 4829 (herve.israel@lovells.com) in France, Domenico Borzumato +39 06 6758231 (domenico.borzumato@lovells.com) in Italy, or Ingmar Dörr + 49 89 290 12 288 (ingmar.doerr@lovells.com) in Germany.

The decision of the European Court of Justice (ECJ) on 12 September 2006 in the case of Cadbury Schweppes plc & Cadbury Schweppes Overseas Ltd v Commissioners of Inland Revenue C-196/04 will, yet again, cause EU Governments to consider whether their tax legislation needs amending to comply with EU law, this time in relation to controlled foreign companies (CFCs). The Danish Government have already announced that draft legislation to amend their CFC legislation will be introduced in December this year. Members of Lovells International Tax team consider the impact of the judgment in three EU jurisdictions.