The New German DCL and Dividend Matching Rules and EU Law

Abstract:

Germany recently amended the scope of two rules that are designed to counter international double-non taxation: the scope of the dual consolidated loss rule has been expanded and a general matching principle has been introduced for dividends, under which an exemption is denied if the underlying payment was an expense for the payer. In this article, we argue that such uncoordinated action, even though understandable from a policy perspective, gives rise to cases of double taxation and, more importantly, is not in line with EU law.