CJEU – Recent Developments in Direct Taxation 2023

1. Introduction

The Entain Services case concerns a preliminary reference made by the Bulgarian Supreme Administrative Court which has posed further questions related to the case pending before it after the initial decision by the CJEU in GVC Services (Bulgaria). The case ultimately boils down to whether a Gibraltar resident parent company of a Bulgarian subsidiary can be subject to withholding tax (WHT) on dividends in Bulgaria. While the case of GVC Services (Bulgaria) related to whether such WHT would be compatible with the Parent-Subsidiary Directive (PSD), to which the Court replied in the affirmative since companies resident in Gibraltar are not covered by that directive,Entain Services will now address the issue of whether the fundamental freedoms prevent such WHT in any event.

Before delving into the facts of the case and an analysis of the possible outcome, a few preliminary remarks regarding the status of Gibraltar under EU law are in order. These remarks are of course valid for the relevant time period of the dividend payments in the main proceedings (2012-2016), when the United Kingdom (UK) was still an EU Member State. At the end of this chapter, the author will address ...