TooEager SA is a company established in Luxemburg (Socit Anonyme), subject to the corporate income tax in
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Question:
TooEager SA has a 40% stake in the capital of Bella Ciao SpA,an Italian company(Società per Azioni). Bella Ciao SpA has paid 600,000 euros in dividends to TooEager SA.
The Italian Tax Administration requestsBella Ciao SpA to apply a 15% withholding tax on that payment of dividends on the grounds that TooEager SA does not qualify for the exemption of the withholding tax provided in the Directive.
According to Italian legislation, where the receiving company makes more than 90% of its income from dividends/interests, has no economic substance of its own (in terms of employees, facilities, assets...; performs no relevant economic function) and is fully owned by a beneficial owner who would not be entitled to the application of the Parent/Subsidiary Directive on its own, then the provisions of the referred Directive do not apply to that intermediary company on the grounds that it is a mere conduit company.
TooEager SA is a company fully owned by TooEager Inc (a US company), performs no economic activity other than receiving dividends from EU subsidiaries, and has no significant economic substance(it only has one part-time employee; it is locate din a rented small office space shared with other four similar companies...).
Choose which side you prefer to advocate for, TooEager SA/ Bella Ciao SpA or the Italian Tax Administration (but make sure it is the winning side!) and argue your case.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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