Lithuania: Interpretation of EU parent-subsidiary directive (PSD) anti-abuse rule (CJEU referral)
Referral by Lithuanian Tax Disputes Commission of series of questions related to the EU PSD anti-abuse rule
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June 13, 2025
The Lithuanian Tax Disputes Commission on March 17, 2025, referred the following questions related to the EU parent-subsidiary directive (PSD) anti-abuse to the Court of Justice of the European Union (CJEU) in case C-203/25:
- Is it compatible with the PSD anti-abuse rule for a national tax practice to deny a withholding tax exemption on dividends paid to a genuine parent company established in another member state solely on the grounds that the payment is a part of a chain of non-genuine transactions?
- Can a chain of dividend transfers be presumed to be artificial or abusive based solely on the similarity of amounts involved at different stages of the transactions?
- Is it compatible with the PSD anti-abuse rule for a national tax practice to deny tax benefits on a cross-border dividend payment based on a chain of non-genuine transactions that occurred entirely after the dividend payment and in another member state?
- Can the tax advantage be attributed to the plaintiff if the tax advantage was ultimately realized by another party (i.e., the ultimate beneficiary) through a chain of non-genuine transactions?
- Can the anti-abuse rule under the PSD apply if the dividends were passed over on a continuous basis (i.e., from one year to one month) instead of “very soon after their receipt” as mentioned in the Danish cases?
- What is the relevance of the plaintiff’s knowledge or intent to undertake non-genuine transactions when applying the anti-abuse rules under the PSD?
Read a June 2025 report prepared by KPMG's EU Tax Centre