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.…

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…

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.…

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.…

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.…