France vs Atlantique Négoce (Enka), June 2020, Conseil d’Etat, Case No. 423809

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For FY 2007 Atlantique Négoce declared having paid dividends to its Luxembourg parent company, Enka, but the tax authorities found that it had not been proven that the Luxembourg parent company was the actual beneficial owner of the dividends. On that basis a claim for withholding tax on the dividends was issued.

Judgement of the Conseil d’Etat.

The court upheld the decision of the tax authorities and dismissed the appeal of Atlantique Négoce.

It follows from the grounds of the judgment of the Court of Justice of the European Union (CJEU) of 26 February 2019, Skatteministeriet v T Danmark and Y Denmark Aps (aff. C-116/16 and C 117/16, paragraph 113) that the status of beneficial owner of the dividends must be regarded as a condition for benefiting from the exemption from withholding tax provided for in Article 5 of Directive 90/435/EEC of 23 July 1990.

“The documents in the file submitted to the court of first instance show that the administration contested before the court the fact that the Luxembourg parent company Enka was the actual beneficiary of the dividends in question, in the absence of any element, such as a bank identity statement, establishing that this company was indeed the holder of the bank account opened in Switzerland into which the dividends were paid. In holding, after a sovereign assessment free of distortion, that none of the documents produced by the applicants was of such a nature as to establish that this company had apprehended the dividends at issue paid in 2007, the court did not disregard the rules on the allocation of the burden of proof or commit an error of law.”

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Conseil d_État, 9ème - 10ème chambres réunies, 05_06_2020

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