CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. ECJ Backs Austria In Double Tax Dispute With Germany

ECJ Backs Austria In Double Tax Dispute With Germany

by Ulrika Lomas, Tax-News.com, Brussels

13 September 2017


The European Court of Justice has ruled in favor of Austria in its dispute with Germany relating to the taxation of interest from profit-participation certificates received by an Austrian bank from a German bank.

The case involved the interpretation and application of Article 11 of the 2000 double tax avoidance treaty between Austria and Germany for the purposes of the taxation of interest from "Genussscheine" certificates acquired by UniCredit Bank Austria AG from the Westdeutsche Landesbank Girozentrale Dusseldorf und Munster, now Landesbank NRW.

Austria argued that, as the member state of residence of the beneficial owner of the interest paid, it is entitled to tax that income, pursuant to Article 11(1) of the tax treaty. However, Germany also claimed the right to tax that income, as the member state in which the interest originated, arguing the interest must be classified as "income from rights or debt-claims with participation in profits" within the meaning of Article 11(2) of the treaty.

The conflict of interpretation led to double taxation of the interest received by Bank Austria, which gave rise to the dispute before the Court.

An earlier opinion on the case by an Advocate General, issued on April 27, 2017, came down on the side of the Austrian Government, noting that that the Austria-Germany tax treaty must be "interpreted to mean that it covers income which provides a creditor with a part or a share of the debtor's profits, to the exclusion of income which varies only in the event of losses incurred by that debtor."

In concurring with the Advocate General's opinion, the full court ruled in a judgment issued on September 12 that the concept of "debt-claims with participation in profits" referred to in Article 11(2) of the tax treaty "must be interpreted as excluding certificates such as those at issue in the present case."

The court ordered the German Government to pay the costs of the case.

TAGS: court | tax | tax avoidance | interest | Austria | Germany | Europe

To see today's news, click here.

Leave a comment

Read our Posting Guidelines

 






Close

Password Reminder

Please enter your email address to receive a password reminder.

 






Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Tax-News+ Updates

Receive FREE daily updates from Tax-News.com, straight to your inbox. Register Now!

For a tailored solution, choose to receive selected news updates for your preferred jurisdictions and topics, with our enhanced Tax-News+ subscriber service. Read more...

 

Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »