As first published in the March 22nd issue of Tax Journal, London tax partner, Andrew Howard, examines the Court of Justice of the European Union’s (the CJEU) landmark ruling on withholding tax and abuse of rights in the Danish conduit cases. In the Danish conduit cases, the CJEU has found that the establishment of holding companies in European jurisdictions can amount to an abuse of rights in some circumstances. Abusive holding companies will not qualify for withholding tax exemption under the Parent-Subsidiary Directive or the Interest and Royalties Directive, even where exemption would otherwise apply under domestic rules.

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