Opinion Statement ECJ-TF 2/2019 on the CJEU decisions concerning the “Beneficial Ownership”

CFE Tax Advisers Europe acknowledges that the “Danish beneficial ownership cases” address a number of important and timely issues, especially with regard to the concept of abuse in EU law. Those include (1) the expansion of the general anti-abuse principle enshrined in EU law to areas of tax law that are subject to minimum harmonization, (2) the use of the OECD materials to define the beneficial ownership concept, (3) the conflation of the beneficial ownership concept with the general anti-abuse principle and the Court’s attempt to give the notion of “abuse” workable contours, and (4) the reading of an effective subject-to-tax clause with regard to the interest income into the definition of a “company” laid down in the Interest-Royalties-Directive (IRD).

However, CFE Tax Advisers Europe also expects that domestic courts will likely struggle to translate the abstract guidance of the “Danish beneficial ownership cases” into concrete judgments, that practitioners and academics alike will have to discuss building blocks and nuances of the Grand Chamber’s judgments for quite some time to come, and that consideration needs to be given on what impact those cases have on current tax structures.