CJEU – Recent Developments in Direct Taxation 2017

1. S. 74Deister Holding, Juhler Holding, GS

The three pending cases, in which as yet no Advocate General opinions have been rendered, concern requests for preliminary rulings to the CJEU under Article 267 of the TFEU. All three cases deal with different aspects of the EU law conformity of the anti-directive/anti-treaty shopping rule in Section 50d paragraph 3 of the German Income Tax Act. This provision limits refunds for withholding tax under Section 50d paragraph 1 of that Act. Two of the referrals concern the previous version of the provision, whereas the latest referral deals with the current version. All these referrals come from the regional tax court of Cologne. The court deals with disputes involving the German Bundeszentralamt für Steuern, which is both the competent authority under tax treaties and responsible for refunds of withholding tax in cross-border situations. The referrals have to be seen in the wider context of renewed efforts to address BEPS through treaty and directive shopping.

1.1. Background: The provision

Under Section 50d paragraph 1 of the German Income Tax Act, withholding tax on income from capital is initially levied regardless of tax treaties and EU directiv...