Want a holding? Think again

An EU country's tax administration has decided that a Latvian holding company is not a UBO for dividends it receives, so it has to look through. Let me explain this as many now go into export markets.

In the situation A-B-C, C must be considered paying to A

A person A, resident in Latvia, owns 100% shares in a Latvian limited liability company B. B, in turn, has established a subsidiary C in the EU country X. The administration in country X said that it considered that the dividends were in substance paid by C to A directly, and not to B. If dividends…