BO
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Dutch case law clarifies Beneficial Owner (somewhat)
Originally published: January 2024 Last week, the Dutch Supreme Court (SC) ruled on the application of the Dutch dividend stripping specific anti abuse rules (SAAR) (https://lnkd.in/eUBtRxWG). The judgement clarifies the role of the SAAR, but it’s probably of wider interest when it touched on the meaning of ‘beneficial ownership’ (BO). To set the scene: the… Continue reading
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Beneficial owner: Italian supreme court makes landmark ruling on scrutinising payments
Originally published: June 2023 Views on beneficial ownership (BO) continue to vary. Here is a summary of a recent Italian case (https://lnkd.in/eg9isd7W). After diving into the Danish (https://lnkd.in/eime87eJ), German (https://lnkd.in/eThShDVU), French (https://lnkd.in/eDXkt8kk), Trinidadian (https://lnkd.in/eDcGSy_s) approaches to beneficial ownership, it’s Italy’s turn now. The Italian approach on BO is … maybe not all that bad? The… Continue reading
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Germany: Revised German anti-treaty shopping rules – Recent case law and first practical experiences
Originally published: June 2023 About a decade ago, Germany had one of the harshest approaches out there to denying EU Parent Subsidiary Directive (PSD) / double tax treaties (DTTs) based dividend withholding tax (WHT) exemptions for foreign holding vehicles. In part because of fears of breaking PSD / DTT obligations, Germany became more lenient over… Continue reading
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Danish Supreme Court issues rulings on beneficial ownership of interest and abuse of EU law
Originally published: May 2023 When the Danish Supreme Court (SC) published the first set of final verdicts on the so-called Danish beneficial ownership (BO) cases in January this year, it was no one’s preferred outcome, but it was consistent (https://lnkd.in/ekj7BTe5). In short, the SC considered every payment had a BO, you’d look through conduit entities… Continue reading
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Fundz: Private equity has a WHT problem
Originally published: February 2023 Private equity (PE) has a withholding tax (WHT) problem. It’s not that they can’t get WHT relief. It’s that governments can’t quite agree if they can in the most common cases. Though some tax authorities may be hostile to facilitating DTT access to funds, there is an ever-increasing demand for funds… Continue reading
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La PPT … una GAAR dificil de empeorar
Originally published: February 2023 Yesterday, I wrote about Blazej Kuzniacki, Ph.D.‘s article on beneficial ownership (BO https://lnkd.in/eqrSZNka), concluding that BO creates practical, semantical and legal coherence problems and it’s better to look elsewhere for an anti-abuse rules, like the principal purpose test (PPT). Today, I am writing about Andres Báez Moreno’s contribution on PPT (https://lnkd.in/eTrY3Xiv), concluding that PPT… Continue reading
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Beneficial Ownership in International Taxation and Biosemantics
Originally published: February 2023 ‘Beneficial ownership’ (BO) does not have a single coherent meaning (https://lnkd.in/gZFUa_pY https://lnkd.in/gGMXGr2a https://lnkd.in/eCvgJmN7). In this article (https://lnkd.in/eYnkJhV8 https://lnkd.in/e_YABqaS), Blazej Kuzniacki, Ph.D. tries to bring the concept back to its origin: an income allocation rule. Even under that interpretation, BO does not – necessarily – have a single meaning, as it relies on domestic law allocation. But it… Continue reading
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Danish Supreme Court issues rulings on beneficial ownership
Originally published: January 2023 I talked quite a lot about ‘beneficial ownership’ (BO). If you dive deep into the term (https://lnkd.in/gZFUa_pY https://lnkd.in/gGMXGr2a https://lnkd.in/eCvgJmN7), chances are you’ll end up more confused than you started. And that’s kind of the point. It’s a loose anti-abuse concept. It was fading into the background, but made a comeback with the ECJ… Continue reading
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ChatGPT on beneficial ownership
Originally published: December 2022 AI has amazing potential, including for tax work. But there is still quite a bit of road ahead. See here some responses on a relatively standard question about beneficial ownership. Although the question is difficult to answer, both attempts by AI here are plain wrong. (To be fair, I tried some… Continue reading
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Beneficial Ownership in International Taxation
Originally published: August 2022 I have returned quite regularly to the meaning of the term ‘beneficial owner’. (BO). It has been a source of confusion (https://lnkd.in/g-NCzPNU https://lnkd.in/gZFUa_pY), frustration(https://lnkd.in/gxseSHgJ ) and occasionally inspiration (https://lnkd.in/gFmqHr9F ) too. In my last post (https://lnkd.in/gGMXGr2a), I noted that I hoped that Blazej Kuzniacki, Ph.D. ‘s book on the term would perhaps create a fresh perspective,… Continue reading
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The Economic Allocation of Income and the Disregarding of Narrowly Held Entities Following the OECD/G20 Base Erosion and Profit Shifting Project: Coordination of Work on Exchange of Information and Income Allocation Rules
Originally published: August 2022 This article by Pablo Hernández González-Barreda examines whether post-BEPS automatic exchange of information (AEOI) between tax authorities allows identifying the owner of the income for tax purposes (https://lnkd.in/gGQ_uc4M If – like me – you can’t access that one, you can read the working paper here and just assume there’s no major differences https://lnkd.in/gADfCG3P). The answer… Continue reading
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Kalimat
Originally published: August 2022 There continue to be big differences in how European countries apply beneficial ownership (BO), as shown by this KPMG overview (https://lnkd.in/e6DsNrPb). BO is traditionally one of main concepts in fighting treaty shopping, but countries never agreed much of its meaning. BO’s importance was fading after a few (for tax authorities) disappointing… Continue reading
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What WHT rate to use for payments to SPVs?
Originally published: June 2022 Most people prefer the current system whereby low substance SPVs can still get reduced treaty or directive rates, provided there’s no treaty shopping motive (the question already foresaw ‘valid commercial reasons’ – in other words: no intention to abuse and it implies that the PPT wouldn’t stop treaty access and it… Continue reading
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Double tax treaties: the French supreme court rules that beneficial ownership can be used affirmatively by taxpayers and the French tax authorities
Originally published: June 2022 Beneficial ownership (BO) continues to be an elusive concept. It is written (undefined) into most tax treaties (DTTs) as a condition for accessing reduced withholding tax rates. A strict reading suggests that low rates require BO and direct receipt (‘paid to’) to be with the same person. But most countries have agreed… Continue reading
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What approach is most effective in stopping tax treaty shopping?
Originally posted: May 2022 As I said yesterday, fighting tax treaty abuse seems to make most sense if friendly countries use treaties to economically integrate their economies, while excluding others. There’s reasons to be skeptical even on that perspective as (1) that doesn’t happen in practice and (2) companies are so cross border nowadays it… Continue reading
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Sweet Dreams (Are Made Of This)
Originally posted: April 2022 In essence, beneficial ownership (BO) and principal purpose test (PPT) deny treaty benefits for structures seemingly meeting the conditions for treaty relief, but not meeting them based on their ‘real’ facts. The EU is going in a different direction in its ATAD3 (Unshell) proposals, denying benefits for SPVs not meeting a… Continue reading
About Me
I am Leonard, an experienced M&A Tax and International Tax expert. I write about tax on LinkedIn and Twitter sometimes (but mostly LinkedIn). People liked the posts, but there were too many of them to keep track of. So, now they are on a blog for future reference.
Obvious disclaimers on all my posts: this is not advice. These views are my own and do not necessarily represent my employer.
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LinkedIn profile: https://www.linkedin.com/in/leendertwagenaar/