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  • Caius Tax Management

Substance

The anti-money laundering directives 4 and 5 (AMLD 4 and 5) are setting transparency requirements for beneficial ownership of companies. Information will be stored in a central register available to national authorities, including tax authorities.

Many countries apply a look-through approach whereby tax treaty benefits are denied for entities which are not regarded to be the beneficial owner due to lack of sufficient substance. This approach is further supported by the decisions of the Court of Justice of the European Union on the Danish beneficial ownership cases.

It becomes increasingly important to determine whether your company meets the substance requirements, and understand whether it can enjoy treaty benefits.

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