Italian Supreme Court Holds Parent-Subsidiary Directive Withholding Tax Exemption May be Denied if Parent Not Effectively Taxed on Dividends

According to recent reports, the Italian Supreme Court issued a decision in December 2018 concerning the withholding tax exemption on dividends under the EU Parent-Subsidiary Directive. The case involved a parent company resident in Luxembourg that received dividends from an Italian subsidiary. The Luxembourg company claimed a refund of Italian tax withheld but was denied. This was appealed, with the provincial tax court finding in favor of the company. However, the regional tax court determi…