Landmark ECJ decisions on beneficial ownership. A failed revolution?

On February 26, 2019 the Grand Chamber of the European Court of Justice (“ECJ”) issued two groundbreaking decisions on six joined “Danish cases” mainly relating to (i) the notion of beneficial ownership under EU law and (ii) abuse of both the Interest and Royalties Directive (“IRD”) and the Parent Subsidiary Directive (“PSD” and, together with the IRD, the “Directives”). A revolutionary ruling was hoped to being issued in favor of taxpayers, following the Advocate General Kokott’s opinion1 . Conversely, the ECJ widely supported the arguments that are usually raised by tax authorities. The ECJ decisions may impact on the cross border investment structures of private equity operators and multinational groups.