Facts
[A. Sàrl], a company domiciled in Luxembourg, belongs to B. PLC and was established by its Investment Banking division. In 2009, the company filed various applications for a refund of withholding tax with the Swiss Federal Tax Administration (ESTV). The ESTV rejected the applications on the grounds that the transactions between the company and D. Ltd. were "collateralized financing" transactions and the Swiss securities of the company had been transferred to D. Ltd. for the purpose of securing the granted loans.
The company appealed the decision of the ESTV to the Federal Administrative Court, which also dismissed the appeal. The company then filed a public law appeal with the Federal Supreme Court.
Considerations
The Federal Supreme Court dismissed the appeal. It concluded that the company [A. Sàrl] cannot be classified as the beneficial owner of the dividends in dispute, as it was under an obligation to pass on the dividends. Therefore, it is not entitled to relief from withholding tax under Article 10(2)(a) of the Double Taxation Agreement between Switzerland and Luxembourg.
Furthermore, the Federal Supreme Court stated that the company cannot derive a claim for a refund of withholding tax from the principle of good faith or the…