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2020 World Tax J. 3 (2020)

handle is hein.journals/wldtxjrn2020 and id is 1 raw text is: Susi Baerentzen* Danish Cases on the Use of Holding Companies for Cross-Border Dividends and Interest - A New Test to Disentangle Abuse from Real Economic Activity? This article provides a critical analysis of the rulings from the European Court of Justice in six Danish cases on the use of holding companies for cross-border dividends and interest, the so-called Danish beneficial ownership cases. The rulings are analysed in light of their unique facts and background to provide a better understanding of their outcome. In particular, the indications of abusive situations as provided by the Court are analysed in the light of economic theory in order to ascertain their meaning and effectiveness in disentangling abusive behaviour from valid business activity. Finally, this assessment is used to substantiate that the subjective element of the abuse test as developed by the Court has developed into an economic assessment to be based on everyday hallmarks of economic standards, rather than a legal assessment. Contents 1. Introduction 4 2. Introductory Remarks 5 2.1. Background 6 2.2. Legal framework 8 2.3. Difference from AG Kokott's Opinions 10 3. Understanding the Outcome 12 3.1. Assessing the facts 12 3.2. Beneficial ownership according to the ECJ - Alignment between the European 14 Union and the OECD 3.3. The notion of abuse in EU law after the Danish beneficial ownership cases 18 3.3.1. The development of the general anti-abuse principle in EU law 19 3.3.1.1. Ems/and Stdrke (Case C-110/99) - The elements of an abuse test 20 3.3.1.2. Cadbury Schweppes (Case C-196/04) - Wholly artificial 21 arrangements 3.3.1.3. Kofoed (Case C-321/05) - A general principle of prohibition of 22 abuse 3.3.2. Balancing the general principles of EU law - Legal certainty and anti-abuse 24 * Susi Baerentzen is a PhD student at PwC Denmark and Aalborg University under the Industrial Research programme of Innovation Fund Denmark. Ms Baerentzen has published several articles on tax issues related to the Danish beneficial ownership cases, State aid and alternative financing. Most recently, she was a reporter for the International Fiscal Association's 73rd Congress in London in 2019. Furthermore, she has published on general legal issues related to international humanitarian law and human rights law when she was previously engaged as a legal advisor at the Danish Red Cross and the Royal Danish Army. Prior to commencing her research, she was a legal advisor for the Danish Minister of Taxation and an external lecturer in Tax Law and EU Law at the University of Copenhagen, Denmark. As part of her current research activities she is officially appointed to the Danish Corps of External University Examiners in EU Law and Tax Law. The author would like to thank Erik Werlauff and Daniel Noe Harboe for their kind, critical com- ments to earlier versions of this article, which have contributed to its quality. Any shortcomings and digressions inevitably presented in this article remain the author's responsibility. WORLD TAX JOURNAL FEBRUARY 2020 13 0 IBFD

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