In a recent publication (Note e Studi 10/2020) Assonime examined the circumstances among the concept of beneficial ownership and abuse of law within cross-border transactions of payments of dividends by interposing a fictitious beneficial owner (as mere formal recipient of the dividend) with the sole sake of benefitting from conventional favourable provisions.

In particular, following the conclusions delivered by the Court of Justice of the European Union (“CJEU”), in the decisions known as “the Danish cases” (Joined Cases C-116/16 and C-117/16) dated February 26th 2019, Assonime agrees that the imposition of withholding tax on the distribution of dividends (which would deny the subject receiving the income the status of beneficial owner, otherwise beneficiary of the exemption provided for in the parent-company directive) shall necessary supported by “converging factors”.

This approach has been specifically adopted not to deny the status of beneficial owner, for example, to pension funds or mutual funds which transfer the dividend received as shareholders to fulfil their institutional obligations of distribution. So that, generally speaking, the same conclusions shall be drawn also for dividends that form part of the profits of the holdings and that, as such, flow naturally and legitimately to their shareholders, on the basis of a specific shareholders’ resolution adopted during the approval of the Financial Statement.

Otherwise, it would be contrary to the principle of free movement of capitals.

Our staff is available for any clarification. 

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