Some Thoughts to Understand the Court of Justice Recent Case-Law in the Danmark Cases on Tax Abuse

Abuse of law is a general principle of EU law and has direct effect and priority over national law. National authorities have to apply it without the need of a specific provision of EU law. It is a self-protection tool and guarantees that the competences of the EU do not extend beyond their limits. This principle is the same in all areas of EU law. It has an objective and a subjective element. The beneficial owner clause addresses specific forms of tax abuse. As such, it is embraced by the more general principle of abuse of law. Under this view, there is not a need to codify the principle in a legal provision. In this case, it is required to prove the intention of abuse. When codified by law, it is transformed into a requirement to apply a specific tax regime: the tax administration must prove the objective element of abuse but not the animus fraudis. In the interest and royalties directive plays this role. In the parent-subsidiary directive can be invoked as an anti-abuse clause, but the intention to defraud has to be proved.