Dividends that are distributed in a cross-border situation should not be subject toheavier tax than dividends distributed in a purely domestic situation. Accordingly, inseveral cases concerning both inbound and outbound dividends, the European Court ofJustice has declared national taxation to be incompatible with European freedoms. Althoughthis case law has had signifi cant infl uence on the tax systems used in the variousMember States, the situation is far from resolved, and the interaction among nationaltax systems relating to taxation of cross-border dividends remains problematic.