EU Parent-Subsidiary Directive
As the EU Parent-Subsidiary Directive has been transposed into
domestic law, dividends paid by a resident subsidiary corporation
to a parent company that is based in another EU Member State
are generally exempted from withholding tax.
This requires that
the parent company has a direct holding of 10% in the subsidiary,
which it has held for twelve months without interruption, and that
the parent company has fled the relevant application with the Ger-
man Federal Central Tax Offce (Bundeszentralamt für Steuern).
Dividends paid by a German subsidiary to a non-German perma-
nent establishment in the EU which is maintained by a qualifying
EU parent company are also exempt from withholding taxes.
The same applies if such a permanent establishment is maintained
by a German parent company, provided the relevant shares are
effectively connected with the German company’s EU perma-
nent establishment.
EU Forecast
euf:ba.18g:19/nws-01