Adolfo Martín, Of Counsel from the Tax Department of BROSETA, has participated in an international seminar organised by the University of Lausanne (Switzerland), with the aim of analysing the consequences in the legislation of different countries of the so-called “Danish Cases”, based on the ruling of the Court of Justice of the European Union (CJEU), of 26 February 2019.

This judgment deals with the concept of the beneficial owner, the application of the theory of abuse of rights and the interpretation of the requirement of subjection and non-exemption in the context of the Interest and Royalties Directive. This is a significant ruling because of its impact on cross-border tax structuring in the EU, since failure to comply with the requirements risks losing access to the benefits of the directive by assuming tax burdens in the form of withholding taxes.

The meeting brought together tax experts from Spain, France, Holland, Italy, Switzerland and Portugal, who presented the repercussions and decisions on tax matters taken in their respective countries.

In the case of Spain, Adolfo Martín explained the decisions of the Spanish Economic-Administrative Court concerning the “Danish cases”, the problems of which arise in connection with the formation of a group of Luxembourg companies for the acquisition of a substantial shareholding in a Danish service provider. The entity which held the shareholding had a certificate of tax residence issued in its jurisdiction of origin, stating that it was liable to Luxembourg corporation tax and was the actual beneficiary of any dividends received from its shareholding in the acquired Danish service entity. Although the acquiring company had its own management body, with sufficient decision-making autonomy, its ultimate shareholders were persons resident outside the European Union.