The Supreme Tax Court has held that a dividend payable by a solvent subsidiary to its shareholder with a controlling interest is generally taxable income for the latter on the date of the resolution regardless of a resolution for a later date of payment.
The Supreme Tax Court has followed an ECJ case in holding that a foreign corporate shareholder may claim from the local tax office a refund of the tax deducted at source from its dividend.
The Supreme Tax Court has followed an ECJ case in holding that a foreign corporate shareholder may claim from the local tax office a refund of the tax deducted at source from its dividend.
The ECJ has rejected a claim by the Commission that the German withholding tax on gross dividends discriminates against foreign pension funds, because the Commission did not substantiate the expenses excluded from deduction.
In its decision of 3 June 2025 – VIII R 21/22, the Supreme Tax Court referred various questions to the Court of Justice of the European Union (ECJ) for a preliminary ruling in connection with the dividend withholding tax paid to third-country companies.
In a case brought by the Commission, the ECJ has held that Germany’s withholding tax on dividends to other corporations is in breach of community law in that it discourages persons from other member states from investing in Germany.
According to a decision of the Supreme Tax Court, the dividend income exemption for trade tax on qualifying shareholdings is also available for distributions of companies of foreign legal form with its statutory (registered) seat abroad, provided the foreign company is comparable to a German corporation, has its place of management in Germany and therefore maintains a permanent establishment there.
The Supreme Tax Court has rejected a tax office attempt to requalify a repayment of share capital as a dividend merely because the repayment was not specified precisely in the capital reduction Resolution.
An ECJ advocate general has suggested the court recognise a restriction on the free movement of capital from the differing treatment of the corporation tax underlying domestic and foreign dividends, but hold it to be justified in the interests of maintaining the internationally agreed balance of taxing rights.
The Supreme Tax Court has held that the 5% expense disallowance on tax-free dividends was, up to 2002, a restriction on the freedom of establishment rather than of capital movement and could thus be upheld in respect of a 33% share in a US company.
In a request for a preliminary ruling from Italy, the European Court of Justice (ECJ) held that a national legislation providing for tax being levied on more than 5% of the amount of the dividends that financial intermediaries receive, as parent companies, from their subsidiaries resident in other Member States is contrary to EU law. This also applies in the case of a tax which is not a tax on corporate income but which includes in its basis of assessment those dividends or a part thereof.
On 12 May 2020, the European Banking Authority - EBA - published its report on the measures and reactions of the addressed authorities in the EU Member States on dividend arbitrage trading, such as Cum/Ex and Cum/Cum schemes.
The Supreme Tax Court has held that there is ultimately no trade tax disallowance of expenses directly connected with tax-free dividend income earned through an Organschaft subsidiary.
The finance ministry has confirmed its interpretation of the Norwegian DTT to the effect that dividends received by a German company on a holding of 25% or more are free of German taxation.
The Supreme Tax Court has held that a dividend paid to a US S corporation on a holding of at least 10% is subject to a 5% withholding tax insofar as its shareholders are tax-resident in the USA.
Does the free movement of capital require a Member State to tax non-resident and resident investment vehicles according to the same tax system? This is the question raised in the request for a preliminary ruling submitted to the European Court of Justice (ECJ) by the Portuguese tax court (Tax Arbitration Tribunal). Contrary to the Opinion of the Advocate General the ECJ decided that the withholding tax on dividends paid to non-resident Undertakings for Collective Investments in Transferable Securities (UCITS) is in violation with current EU Law.
The Lower Tax Court of Munich referred preliminary questions to the European Court of Justice regarding the compatibility of the German regime of dividend withholding tax imposed on a Canadian pension fund with the free movement of capital as provided in Article 63 of the Treaty on the Functioning of the European Union.
The finance ministry has announced the arrangements for claiming withholding tax exemption under the EU Parent/Subsidiary Directive on dividends on shares held in the custody of a bank.
