Tax Treaty Case Law around the Globe 2022

S. 143Chapter 14: Denmark: Beneficial Ownership and Abuse of Tax Treaty Rights

Søren Friis Hansen

14.1. Case SKM2021.304ØLR and its background

14.1.1. The Danish beneficial ownership cases before the ECJ

The Danish case to be presented at the 2022 conference is one of a number of similar cases, which has recently been decided by the Court of Justice of the European Union (ECJ). These cases raised the question of whether Denmark could refuse exemption from withholding tax in situations where intermediary holding companies, which were resident in other EU Member States, had received dividends or interest. The dividends and interest payments were made by subsidiaries that were resident in Denmark. The Danish tax authorities did consider the recipient companies to be mere conduit companies, which were not the beneficial owner of the dividends or interest payments. These beneficial ownership cases concern situations that took place before Denmark had implemented the relevant provisions on abuse in the Merger Directive (90/434) and the Amending Directive to the 2011 Parent-Subsidiary Directive (2015/121). The Grand Chamber of the ECJ delivered its two judgments in the combined Danish beneficial ...