Determining the Beneficial Owner of Dividend Income Compared to Other Items of Income in International Taxation: nihil sub sōle novum¹

This article focuses on how the concept of beneficial ownership (BO) is determined and applied in international taxation. Although the article analyzes the concept of BO under tax treaties, i.e., the major source of law reducing or eliminating withholding taxation (WHT) on cross-border income at the source state, it is by analogy relevant to European Union (EU) law. The analysis aims to verify whether the meaning of BO in legal provisions regulating WHT on dividend income is the same as under provisions dealing with such taxation on other types of income (typically interest and royalties). The article answers that research question affirmatively, arguing that the concept of BO should be understood in the same way under all provisions concerning WHT on income. This argument follows from the observation that the concept of BO has one and the same income allocation function under these provisions. In contrast, the anti-abusive function should be essentially dismissed, especially in the presence of general anti-abusive rules such as the principal purposes test (PPT) or the general anti-avoidance rule (GAAR). This approach to determining BO is agnostic, and so it applies alike to WHT on income under tax treaties across the globe and EU law.