Tax Treaty Case Law around the Globe 2022

34.1. Introduction

In these two relevant cases, Qatar Holding (2021) and Acciona (2021), the Spanish National Tribunal (AN) dealt with the payment of dividends from Spanish companies to intermediate holding companies located in Luxembourg and the Netherlands, respectively, owned by resident companies in third countries (non-EU Member States).

In Qatar Holding, the main legal framework at stake was the exemption for the distribution of dividends laid down in the Parent-Subsidiary Directive (90/435) (PSD) and implemented in article 14.1.h) of the Spanish Non-Resident Income Tax law (SNRTL). The conclusions raised by the AN concerning the burden of proof of abuse in intermediate holding companies could be extended to treaty shopping cases, namely under the scrutiny of the principal purpose test (PPT) in article 29(9) of the OECD Model (2017). The Qatar Holding judgment also corrects the 2019 expansive interpretation of abuse related to intermediate companies upheld by the Central Economic-Administrative Court (TEAC), which affects the application of EU tax directives and tax treaties alike. Qatar Holding is not isolated and confirms a solid judicial trend by the AN to require the ta...