Italian tax administration rules that EU merger does qualify for tax free treatment under the EU merger directive if no permanent establishment in Italy exists after the merger
Burden of Proof of Tax Avoidance on Tax Administration, Italian Supreme Court Says
The Tax Section of the Italian Supreme Court in its judgment n. 1465 of January 21, 2009 held that the tax administration bears the burden to prove that a transaction is carried out solely to obtain a tax advantage, in order to disregard the transaction and deny the tax benefits obtained by the taxpayer under
Madeira Company Held Liable to Tax in Italy, Regional Tax Court Ruled
Italian Regional Tax Court found a Madeira company engaged in the business of purchasing and selling goods had its permanent establishment in Italy and was subject to tax in Italy, were its contracts were negotiated and its business was supervised by its shareholders.
EU Parent-Subsidiary Directive Does Not Apply to Dividends on Shares Held in Usufruct, ECJ Ruled
The European Curt of Justice ruled that the parent subsidiary directive, which exempts from withholding tax dividends paid from a EU subsidiary to a EU parent, does not apply to dividends paid to the holder of a usufruct right on the shares.
Italian Supreme Court Applies General Anti-Avoidance Principle
With two very important decisions issued on December 23, 2008 and concerning a dividend washing and dividend stripping transaction, the Italian Supreme Court for the first time applied a general anti-avoidance principle deriving directly from the Italian Constitution. According to the Court, the general anti-avoidance principle is an underlying principle of the Italian tax system that applies on top and above of any other specific anti abuse provision of the tax code, and denies the tax benefits of a transaction that lacks economic substance and is entered into for the sole or principal purpose of obtaining a tax advantage.
Withholding Tax on Outbound Dividends to a Luxemburg Investment SICAV Illegal, AG of the ECJ Says
AG of ECJ issued his opinion in Aberdeen Property Fininvest Alpha, according to which no withholding tax should apply to dividends to a EU company (in the case, a Luxembourg investment fund SICAV) if no similar tax applies to a domestic dividend
ECJ Ruled That Restriction to Tax-Free Treatment of Cross-Border Transfer of Shares is Illegal
The European Court of Justice with its decision in case C-285/07 held that the double carryover basis requirement imposed under German law to accord tax free treatment to the shareholders of the target corporation in a EU cross-border transfer of shares violates the EU mergers directive and EC law.
Italy’s Tax Administration Rules on Cross-Border Tax Free Mergers
With ruling n. 470/E of December 3, 2008 Italy’s tax authority extended non recognition treatment to a merger falling outside the scope of the EU mergers directive, facilitating the possibility to carry out cross-border reorganization involving Italian assets or Italian companies without immediate recognition of gain.
Italy’s Tax Administration Rules on Change of Tax Residency During a Tax Year
Italy’s Tax Administration rules that an individual who leaves Italy and moves to a foreign country in the second half of the year remains resident in Italy for tax purposes until the last day of the year
ECJ Ruled That Restrictions to Tax Consolidation Violate EC Treaty
European Court of Justice in Société Papillon (C-418/07) ruled that French national laws that limit access to tax consolidation in EU cross-border situations violate the EC Treaty. The ruling offers taxpayers opportunities to claim access to consolidation at the EU level every-time that such option is granted at domestic level and to offset losses and profits of the EU members of a consolidated group.