We successfully represented Nordcurrent Group in a landmark case in which the Court of Justice of the European Union (CJEU) clarified the application of dividend tax exemption rules. The Court ruled in favour of our client, challenging the approach taken by Lithuania’s State Tax Inspectorate (STI) and setting a significant precedent across Europe.
The process, which began in 2021, involved EUR 1 million in unjustly assessed taxes.
STI applied incorrect practice
In recent years, the STI in Lithuania has increasingly taxed dividends involving foreign group companies, following the provision that exemptions do not apply where a company exists primarily for tax benefits. However, the STI assessed these situations too narrowly, failing to consider whether the group structure actually resulted in tax savings.
The CJEU ruled that the STI cannot limit its assessment to the dividend payment period alone. It must consider all relevant circumstances behind the group’s structure, including its technical capacity for sales in Lithuania.
Moreover, the CJEU held that the assessment of tax benefits must go beyond the exemption itself and take into account factors such as corporate tax paid in other jurisdictions.
Our team and services
Nordcurrent Group was represented in the case by partner Indrė Ščeponienė and associate Miglė Mainionytė. Our team advised the client throughout the entire period of a tax inspection and dispute that lasted more than three years.
Read the CJEU ruling here.
