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German Ministry of Finance Responds to ECJ Ruling

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On 20 December 2017, the ECJ passed a decision relevant to many of the EU shareholders involved in German corporations. Due to the so-called Anti Treaty Shopping Provisions, which were anchored in national German law, no relief or reimbursement of capital gains tax on dividends to EU shareholders was possible in many cases, e.g. in many real estate investment holdings in the form of Lux S. à R.L. 's or Dutch B.V. 's.

The Federal Ministry of Finance (BMF) now accepts this decision but it is only applicable to cross-border dividends within the EU. It is possible too that this BMF letter is not in line with the case law of the ECJ and is, in turn, illegal in the EU.

As a result, this BMF letter helps foreign EU group companies that do not fall under local tax exemptions or benefits. If you need to know more then contact our Interlaw experts by emailing Alexander Lehnen on email: [email protected]

Pictured: Alexander Lehnen, partner at Interlaw German member firm ARNECKE SIBETH