Public Pension Funds in EU Member States: Their Comparability and Tax Treatment under the Free Movement of Capital (Keva and Others (Case C-39/23))

This note examines the tax treatment of public pension funds within the European Union in the context of the free movement of capital as contained in article 63 of the Treaty on the Functioning of the European Union (TFEU). The note analyses recent developments regarding the imposition, by EU Member States, of withholding taxes on dividends received by non-resident public pension funds in circumstances in which resident public pension funds are exempt. In doing so, the article critiques the actual comparability of these situations. It underscores the limitations of article 65(1)(a) of the TFEU, which theoretically permits tax differentiation based on residence. Furthermore, the article highlights the crucial role of the Court of Justice of the European Union in ensuring that Member States comply with EU law, particularly in order to maintain a genuine internal market for cross-border investments.