Treaty between Germany and the Netherlands – Germany's Federal Financial Court rules on qualification of dividends from third countries paid to Dutch PE of German GmbH

In a recently published decision of 19 December 2007, the Federal Financial Court (Bundesfinanzhof) held that dividends paid by companies resident in third countries to a permanent establishment (PE) in the Netherlands which belongs to a German limited liability company are not attributable to the PE.

(a) Facts. The plaintiff, a German limited liability company (GmbH) was the sole limited partner of a Dutch partnership, besloten commanditaire vennootschap (C.V.), the C.V. being a PE of t…