2018 01 Decision European... .pdf

File information


Original filename: 2018_01_Decision European....pdf
Title: 2018_01_Decision European....indd

This PDF 1.3 document has been generated by Adobe InDesign CC 2017 (Windows) / Adobe PDF Library 15.0, and has been sent on pdf-archive.com on 11/01/2018 at 15:17, from IP address 193.27.x.x. The current document download page has been viewed 386 times.
File size: 597 KB (1 page).
Privacy: public file


Download original PDF file


2018_01_Decision European....pdf (PDF, 597 KB)


Share on social networks



Link to this file download page



Document preview


Decision of European Court of
Justice concerning § 50d (3) EStG
– Abolishment of Anti-Treaty-Shopping rules -
January 2018

European Court of Justice combined the two cases Deister Holding (C 504/16) and Juhler Holding (C 613/16) and declared in
its decision of December 20, 2017 that § 50d (3) EStG (Income Tax Code) is not conform to European principle of freedom of
establishment and the parent-subsidiary directive.
The decision applies to § 50d (3) EStG in the Version of 2007 which was amended by 2012. However, it is likely that Court
decision will also affect the current version which is as well pending with European Court of Justice (C-440/17).
In both proceedings corporations domiciled in EU member states applied for reimbursement of German withholding tax for
distributions from its German subsidiaries. In both cases it was unclear whether the Anti-Treaty Shopping rule of § 50d (3)
EStG (2007) was applicable.
In the Deister Holding as well as in the Juhler Holding case BZSt (German Federal Central Tax Office) refused the refund of
withholding tax as holding companies did not carry out their own economic activity in the sense of § 50d (3) EStG.
European Court of Justice pointed out that the Parent-Subsidiary Directive postulates that profits distributed by a subsidiary
established in one Member State of the EU to its parent company, established in another Member State, may not be subject
to withholding tax.
Any deviation from the Parent-Subsidiary Directive is only allowed if it is “required” and “proportionate”. Therefore, overall
assumptions that structures were established for tax evasion or abuse purposes cannot justify any disregard of EU law.
European Court of Justice requires national tax authorities to „individually” review group structure and group processes as a
whole. In order to identify abuse tax authorities need to review the specific situation within the group, such as the organizational, economic or other significant characteristics of the group structure and group strategies. In addition, national tax authorities are supposed to implement the possibility to prove existence of economic reasons for certain group structures (counterevidence).
§ 50d (3) EStG was also examined with regard to its compatibility with freedom of establishment. As the regulations are only
applicable to non-resident parent companies, these companies may be discouraged from getting economically active in
Germany through a subsidiary. This might be qualified as restriction of freedom of establishment which is not justifiable for the
reasons stated above.
The decision directly only affects the version of § 50d (3) EStG which was applicable until 2011. However, argumentation can
be easily applied to the current version so that it is likely that pending cases are open for counter-evidence.

Your Contact
Michael Schmitz
Managing Partner

+49 69 97886 718
michael.schmitz@crowehorwath-ffm.de

Audit / Tax / Advisory / Risk
© 2018 INTERTAX TREUHAND GmbH
Steuerberatungsgesellschaft

Veronika Leja
Tax Assistant
+49 69 97886 722
veronika.leja@crowehorwath-ffm.de

www.crowehorwath-ffm.de


Document preview 2018_01_Decision European....pdf - page 1/1


Related documents


2018 01 decision european
120216 actavis v lilly dextrose judgment redacted
slovenia
cp160092en
soroskooptbrussel
changing faces of the us supreme court

Link to this page


Permanent link

Use the permanent link to the download page to share your document on Facebook, Twitter, LinkedIn, or directly with a contact by e-Mail, Messenger, Whatsapp, Line..

Short link

Use the short link to share your document on Twitter or by text message (SMS)

HTML Code

Copy the following HTML code to share your document on a Website or Blog

QR Code

QR Code link to PDF file 2018_01_Decision European....pdf