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On 1 March 2018, Advocate General Kokott issued her opinion in the Danish beneficial owner cases currently pending before the Court of Justice of the European Union (CJEU). The cases concern whether dividend and interest payments from Danish companies to their parent companies in other EU Member States should be exempt from Danish withholding tax with reference to the EU Interest and Royalties Directive and the EU Parent-Subsidiary Directive.
In the said cases, the Danish tax authorities have denied such exemption arguing that the parent companies are not the beneficial owners of the payments, but rather conduit companies. The High Court of Eastern Denmark has referred a number of requests for preliminary rulings to the CJEU containing multiple questions pertaining to the understanding and extent of the notion of beneficial owner and abuse under EU law.
Discover more: A step towards more clear and uniform rules for beneficial ownership
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Although relying on the referring court to decide whether the struc-tures in question are to be consider-ed abuse, the Advocate General’s opinion provides useful guidance on the interpretation of the beneficial owner concept. CJEU’s preliminary rulings are expected to be delivered later this year. It will be interesting to see whether the CJEU will follow the Advocate General’s opinions.