ECJ Decision on Arbitration between Germany and Austria Regarding Taxation from Profit Participation Certificates under the Austria-Germany Tax Treaty

Abstract

In an arbitration case between Germany and Austria on the right of taxation relating to interest from profit-participation certificates, the ECJ recently held that such interest should be taxed only in the state of residence of the beneficial owner unless such certificates gave entitlement to the debtor’s profits. AT: ECJ, 12 Sept. 2017, Case C-648/15, Republic of Austria v. Federal Republic of Germany, ECJ Case Law IBFD. Apart from the tax aspects and the interpretation of the treaty itself, this decision is remarkable as it demonstrates the judicial capacity of the ECJ in double tax treaty controversies.