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Tax & Legal

ECJ: Passive income attribution from controlled companies resident in third countries


The European Court of Justice has held that the German provision for the taxation of  controlled company income from invested capital from outside the EU might fall under the “grandfather” clause of Art 64 TFEU, provided the German legislation has remained substantially unchanged since that date. It is now for the Supreme Tax Court to decide finally whether this is the case. Continue reading

Input tax deduction for advance payment despite non-delivery of ordered goods


The purchaser of thermal power units, which were not delivered due to fraud, shall not be denied the right to deduct input tax from an advance payment if the supply appeared to be certain at the time of payment. In three decisions, the Supreme Tax Court follows a judgment of the European Court of Justice (ECJ), to which it has referred the cases earlier for a preliminary ruling. Continue reading

ECJ provides guidance on beneficial ownership and abuse of rights


On 26 February 2019, the ECJ issued its judgements in the joined cases T Denmark and Y Denmark -v- the Danish Ministry of Taxation (C-116/16 and C-117/16) and N Luxembourg 1, X Denamrk A/S, C Danmark I and Z Denmark ApS -v- the Danish Ministry of Taxation ( C115/16. C-118/16, C-119/16 and C-299/16). These cases related to the question of whether dividend and interest payments were exempt from withholding tax, when the payments were made from a Danish company to a EU-resident company, and then(fully or partially) passed on by the EU-resident to the ultimate parent resident in a third country. Continue reading

The Italian Budget Law 2019


The last version of the Italian Budget Law 2019 has been published in the Gazzetta Ufficiale from the 31. December 2018 and entered into force on the 1st of January 2019. The provisions include interesting innovations on the tax environment for taxpayers, both   legal entities and natural persons.

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Response of tax authorities to European Court of Justice’s decision on the “activity requirement” for trade tax exemptions on dividends from third countries


The tax authorities of the Federal States have issued a joint response to the ECJ’s decision in EV (C-685/16) on 20 September 2018, in which the Court decided that the “activity requirement,” contained in the rule providing for a trade tax exemption on distributions from third countries contravened EU law. Continue reading