Tax Treaty Case Law around the Globe 2020
1. Aufl. 2021
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S. 123Chapter 12 Luxembourg: Qualification of Liquidation Proceeds – Dividend Distributions or Capital Gains?
Katerina Pantazatou
12.1. Introduction
This case concerns an appeal brought by the appellant taxpayer before the Luxembourg Administrative Court. The Court was called to decide on a number of domestic substantive and procedural tax law questions, but also on the qualification of liquidation proceeds under the Belgium-Luxembourg Income and Capital Tax Treaty (1970).
The taxpayer did not receive a credit for the tax withheld in Belgium with regard to the advance payments made to her by a company in relation to its ongoing liquidation. Belgium had imposed a withholding tax on the basis of article 10(1) of the Belgium-Luxembourg Income and Capital Tax Treaty (1970), while Luxembourg refused to grant a credit, since it qualified the income as a capital gain within the meaning of article 13(3).
12.2. Facts of the case
The case concerned the tax return of a Luxembourg-resident married couple. One of the spouses, resident in Luxembourg since September 2013, was the sole shareholder of a Belgian company. The Belgian company had no activity since 2013, and its liquidation was concluded by a judg...