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European Commission refers Italy and Luxembourg to ECJ for not implementing Directive amending EC Parent-Subsidiary Directive — Orbitax Tax News & Alerts

On 5 July 2006, the European Commission announced that it had referred Italy and Luxembourg to the European Court of Justice (ECJ) in respect of failure to adopt and notify the measures required for the implementation of Directive 2003/123/EC amending the EC Parent Subsidiary Directive. This Directive, which should have been implemented by 1 January 2005 by the EU Member States, broadens the scope of the EC Parent Subsidiary Directive and improves its operation by, inter alia, updating the list of companies covered by it and reducing the required participation threshold of a qualifying parent company for a withholding tax exemption.

Italy and Luxembourg, despite the Commission's formal request of 5 July 2005, did not adopt and notify any implementing measures, the Commission has decided to refer the case to the ECJ.