Beneficial Ownership: Final Judgements In "Danish Cases" - Dividends

On 9 January 2023, the Danish Supreme Court gave final judgements in the first two of the so-called "Danish Cases" to reach the Court. Ruling on dividends distributed to holding companies in Luxembourg and Cyprus, the Supreme Court held in favour of the Danish Ministry of Taxation. Read more below.

The focal point in the "Danish Cases" is the "beneficial owner" quality of EU resident companies receiving dividend or interest payments or accruals from their Danish resident group companies, and whether the Danish companies should have withheld tax on such payments and acted negligently in not withholding.

In February 2019, the Court of Justice of the European Union (CJEU) ruled in several joined cases regarding the Danish withholding tax regime for dividends and interest paid to companies in other EU Member States. The CJEU ruled that a general prohibition of abuse exists in EU law and must be applied by the Member States, and that beneficial ownership is not only