A Dutch company, Agusta Holding BV, submitted a request regarding the reimbursement of withholding tax paid in Italy by its Italian subsidiary on dividends distributed for the fiscal year 2001. The request was initially accepted and the withholding tax paid back. But after an audit, the reimbursement was then challenged. The tax authorities found that Agusta Holding BV had been incorporated in the Netherlands only to benefit from the favourable fiscal dividend regime provided by the Italian-Netherland double tax treaty and from the Dutch tax regime concerning the exemption of dividends from taxable income. Agusta Holding BV appealed the decision of the tax office before the Provincial Tax Court which ruled in favor of Augusta Holding BV as the deadline to ask for the reimbursement of the withholding tax back had expired at the time of the audit conducted by local tax office. The local tax office appealed this decision before the Regional Tax Court. The Regional Tax Court overturned the decision and affirmed that: (i) the terms to challenge the reimbursement initially granted after automated controls had not expired, (ii) Agusta Holding BV was not tax resident in the Netherlands since its directors resided in Italy and in the UK and (iii) Agusta Holding BV did not perform any economic activity in the Netherlands. This decision was then appealed by Augusta Holding to the Supreme Court. The Supreme Court rejected the decision of the Regional Tax Court and held that the place of effective management of Agusta Holding BV was located in the Netherlands, where meetings of the board of directors physically took place and where the company had dedicated premises where management activities were conducted. Click here for English translation Click here for other translation ...