Tax Flash: Exemption on Dividends under the Parent Subsidiary Directive

The European Court of Justice (ECJ) decided September 7 the case Eqiom, concluding that the French tax authorities cannot automatically refuse to exempt dividends distributed by a French resident company to its Luxembourg parent company which was, in turn, indirectly controlled by a company resident in Switzerland.

ECJ says that it is forbidden to deny a tax advantage without the tax authorities being obliged to provide even prima facie evidence of fraud and abuse, as this would go further than is necessary for preventing fraud and abuse.

The Spanish tax code has this same rule, so we expect it will be nearly eliminated as well.

Contact:

JOAN PONS 
Abogado economista

jpons@etl.es
T. +34 934 961 800
www.etlglobal-linkservices.com