Tax Treaty Case Law around the Globe 2016
1. Aufl. 2017
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S. 79Chapter 6 France: Tax-Exempt Entities Are Not Eligible for Tax Treaty Benefits
Daniel Gutmann
6.1. Introduction
Two decisions of the Supreme Court released on (370054, LHV and 371132, Santander Pensiones SA EGFP) deal with the question whether a tax-exempt entity may be eligible for tax treaty benefits. By answering negatively, the Supreme Court sheds an interesting light on a classical issue with respect to article 4 of the OECD Model Convention.
6.2. Facts of the case
This question has been tackled in the context of dividend distributions paid by French corporate entities to German and Spanish pension funds. The Court had to assess whether the beneficiaries of these distributions could enjoy the reduced withholding tax provided by the tax treaties concluded by France with Germany and Spain.
Both treaties contained a “residence” provision that was worded after article 4 of the OECD Model. It should be reminded in this respect that article 4(1) states that “for the purposes of this Convention, the term ‘resident of a Contracting State’ means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or ...