German Ministry of Finance Guidance on Anti-Treaty Shopping Rule

27 April 2018
Author: JHA

The German Ministry of Finance has published its official guidance on the German anti-treaty shopping rule, in direct response to the decision of the Court of Justice of the European Union (‘CJEU’) in Joined Cases C-504/16 and C-613/16 Deister Holding and Juhler Holding (reported in the January 2018 newsletter). The CJEU had held that the German anti-treaty shopping provisions breached the Parent-Subsidiary Directive (‘PSD’).

Issued on 4 April 2018, the guidance provides that the previous German laws on anti-treaty shopping (dated 2007) are no longer to be applied in open cases where the foreign recipient of a distribution of profits claims a tax refund under the PSD, so that all such open cases must now be approved by the Federal Central Tax Office. Significantly, the guidance also comments on the applicability of the subsequent (2012) anti-treaty shopping provision. The guidance stipulates that the 2012 provision allows holding entities that only carry out asset management to claim tax relief under the PSD, provided that the said entity actually exercises its shareholder rights and does not merely exist for the purpose of avoiding tax.


It is worth noting that the guidance only concerns dividend withholding tax under the PSD. Specifically, the guidance does not affect withholding tax relief on interest or royalties (under the Interest and Royalties Directive) or relief on other dividends not falling within the scope of the PSD.

This article appears in the JHA April 2018 Tax Newsletter, which also features:

  1. Slovak Emission Allowances Tax Breaches EU Law
  2. HMRC May Not Open Enquiry into Voluntary Self-Assessment Return 
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