Strategizing International Tax Best Practices – by Keith Brockman

Posts tagged ‘EU Diective’

Italy’s EU DIV WHT; S. Court’s inconsistent position

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.

https://www.ey.com/Publication/vwLUAssets/Italian_Supreme_Court_denies_withholding_tax_exemption_under_EU_Parent-Subsidiary_Directive_in_absence_of_actual_dividend_taxation_at_EU_parent_company_level/$FILE/2019G_000316-19Gbl_Italian%20SC%20denies%20WHT%20exemption%20under%20EU%20Parent-Subsidiary%20Directive.pdf

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