The European Commission has formally requested that Germany amends its anti-abuse provisions on withholding tax relief. While not criticising the aim of the anti-abuse measure, the Commission is concerned about the disproportionality of one provision under which companies have to prove the existence of genuine economic activity of their foreign subsidiaries to obtain the relief.
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The Court of Appeal ruling clarifies that treaty benefits are not abusive where transactions are commercially driven, providing greater certainty on “main purpose” anti-avoidance tests
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