This recent case underscores the reluctance to assume all EU Member States will interpret the EU Directive in accord with its meaning.
The Lux parent had a dividend exemption regime, thus Italy claims there is really not a dividend, thus withholding tax applies despite the EU Directive and similar court cases. This reasoning may point to advance planning/rulings for similar transactions, or look for options to otherwise accomplish the cash planning objectives.
EY’s Global Tax Alert provides details on this interesting development.
Click to access 2019G_000316-19Gbl_Italian%20SC%20denies%20WHT%20exemption%20under%20EU%20Parent-Subsidiary%20Directive.pdf
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