15 July 2016 CJEU rules nonresident financial institutions may deduct business expenses for interest withholding tax purposes The Court of Justice of the European Union (CJEU) released its decision on the Brisal and KBC vs Fazenda Pública Case on July 13. The CJEU held that the imposition of a withholding tax on the interest income of nonresident financial institutions, without the deduction of business expenses directly related to the business, is against the freedom to provide services (article 56 of the Treaty on the Functioning of the European Union (TFEU)), when such income received by financial institutions resident in the respective Member State is not subject to such withholding tax and is allowed to deduct such expenses. A Tax Alert prepared by EY's EU Tax Services group, and attached below, provides additional details. Document ID: 2016-1232 |
