OS ECJ-TF 2/2016 on the Decision of the Court of Justice of the European Union of 13 July 2016 in Brisal and KBC Finance Ireland (Case C-18/15), on the Admissibility of Gross Withholding Tax of Interest
João Félix Pinto Nogueira, Francisco Alfredo Garcia Prats, W. Haslehner, Volker Heydt, E. Kemmeren, G. Kofler, M. Lang, P. Pistone, Stella Raventos-Calvo, Emmanuel Raingeard de la Blétière, Isabelle Richelle, A. Rust, Rupert Shiers
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Abstract
This article examines the decision of the CJEU in Brisal and KBC Finance Ireland (Case C-18/15) of 13 July 2016. Following a Portuguese reference for a preliminary ruling, the Court's decision provides further clarification on the permissibility of withholding taxation within the European Union. In relation to interest, the Court held that non-resident taxpayers may be subject to withholding taxes (even if comparable residents pursuing the same activity are not) but that non-residents may nevertheless not be taxed on gross income (when comparable residents are taxed on net profits) and are, therefore, entitled to deduct expenses directly connected to their business activity.