In Belgische Staat v Wereldhave Belgium Comm. VA and others (Case C-448/15) (8 March 2017) the CJEU found that Directive 90/435 (the parent-subsidiary directive) does not apply in circumstances where the recipient is subject to a zero rate of corporation tax.
Wereldhave Belgium (a limited partnership with a share capital) was owned by Wereldhave International and Wereldhave both Dutch public limited companies. Wereldhave Belgium had paid to Wereldhave International and Wereldhave dividends totalling over €20m. Both parent companies contended that no withholding tax was due on the dividends under the parent-subsidiary directive. The Belgian tax authorities considered that the recipients of the dividends were Netherlands fiscal investment institutions (FIIs) subject to corporation tax at a nil rate; and were therefore not eligible for the exemption.
The CJEU noted that the directive seeks to ensure the tax neutrality of the distribution of profits by a subsidiary established in one...
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