The Resource Flow-through holding companies in light of the Parent-Subsidiary Directive : the thin line between tax planning and tax abuse

Flow-through holding companies in light of the Parent-Subsidiary Directive : the thin line between tax planning and tax abuse

Label
Flow-through holding companies in light of the Parent-Subsidiary Directive : the thin line between tax planning and tax abuse
Title
Flow-through holding companies in light of the Parent-Subsidiary Directive : the thin line between tax planning and tax abuse
Creator
Subject
Language
eng
Summary
This article analyses a tax structuring technique which can, even in the post-BEPS era, lead to unfavourable results from a fiscal perspective. First, it describes a disputed tax planning scheme. In particular, the authors show that by using partially tax-exempt companies under Article 2(a)(iii) of the Parent-Subsidiary Directive as flowthrough holding companies, the general partner of the latter can achieve a fully tax-free repatriation of profits within the EU. Subsequently, the article addresses the question as to whether this result can be tackled by currently available legal anti-abuse means (section 3). The authors suggest that the taxpayer-friendly settled case law of the EU Court of Justice (ECJ) makes it almost impossible for current anti-abuse rules to cover this technique. Finally, the authors recommend that the personal scope of the Parent-Subsidiary Directive be limited, which should provide an effective solution for such structures, while also being suitable for political consensus among the Member States (section 4)
Citation source
In: Intertax. - Alphen aan den Rijn. - Vol. 47 (2019), no. 6/7 ; p. 590-608
http://library.link/vocab/creatorName
  • Melkonyan, S
  • Schade, F
Geographic coverage
  • European Union
  • Europe
Language note
English
http://library.link/vocab/subjectName
  • holding company
  • pass-through entity
  • allocation of profits
  • Parent-Subsidiary Directive
  • GAAR
  • ECJ case law
  • beneficial ownership
Label
Flow-through holding companies in light of the Parent-Subsidiary Directive : the thin line between tax planning and tax abuse
Instantiates
Publication
Label
Flow-through holding companies in light of the Parent-Subsidiary Directive : the thin line between tax planning and tax abuse
Publication

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