In this article the authors Frederik Mulder and Yves Cattel discuss the ruling of the European Court of Justice in the so-called “Danish cases” (T Danmark – Case C-116/16 and Y Denmark – Case C-117/16). The Court allows Danish tax authorities to deny the benefits of the Parent Subsidiary Directive under the general EU abuse of law concept. The authors argue that, even though many tax professionals have perceived this ruling as ground breaking, it perfectly fits within the existing legal framework of abuse previously set out by the ECJ. Also, the authors discuss the definition of a “conduit company”. This is a new concept that the ECJ introduced whereby the actual economic activity of the shareholder of the company paying the dividend is relevant.
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