From Germany: German Tax Authorities Follow ECJ Decision and Scrap Withholding Tax on Intra-EU Dividends
On December 20, 2017, the European Court of Justice (ECJ) ruled in a threshold case involving a Danish holding company represented by Arnold Chr. Stange, a Partner at Andersen Tax & Legal in Düsseldorf, Germany. The ECJ ruled that the Germany government may not impose any additional requirements for an exemption from dividend-withholding-tax paid out to EU holding companies. On April 4, 2018, the Federal Ministry of Finance issued a decree which confirmed the ECJ’s interpretation. Specifically, the Ministry’s decree confirmed that requirements for substance and active participation in the course of business shall be deemed satisfied in case a foreign holding company, which has no staff and no activities other than simply holding its participations.
As a result of the ECJ ruling, EU holding-entities that lack staff and infrastructure - as is often the case in internationally organized groups and private estates of considerable volume - should face no obstacles in applying for a refund of withholding-tax charged on dividends received from Germany, provided the case has not already been settled finally.