Time and Tax: Constitutional Versus Economic Perspectives

in Kofler, Georg; Rust, Alexander (Eds.) Time and Tax – Issues in International, EU, and Constitutional Law (2019)

Constitutional and economic perspectives frequently differ, including with respect to taxation. Constitutional scholars, on the one hand, typically focus on questions of justice with respect to a ... [more ▼]

Constitutional and economic perspectives frequently differ, including with respect to taxation. Constitutional scholars, on the one hand, typically focus on questions of justice with respect to a particular policy, together with the legal and institutional structures that aim to implement that policy, and thus look at individual rights, equity, the balance ofpowers and the proportionate consideration of diverse interests. Economists, on the other hand, are mainly interested in a particular policy's economic efficiency: they zoom in on its trade-offs, incentives, and consequences for economic welfare as a whole. It is necessary to combine both views for a holistic understanding of legal regulations. From both perspectives, it is, ultimately, a policy's practical effects that drive an assessment of its economic efficiency or its fairness. Thus, any constitutional or legal analysis ought to be imbued with a certain level of economic analysis, as justice depends on the actual outcomes of a policy, including its second-order effects. This contribution attempts to inquire the consequences of such approach in three main dimensions of timing taxation: assessment of taxes, collection of taxes, and the transition between different tax rules and systems. [less ▲]

EU and WTO Law Limits on Digital Business Taxation

in Haslehner, Werner; Kofler, Georg; Pantazatou, Aikaterini (Eds.) et al Tax and the Digital Economy: Challenges and Proposals for Reform (2019)

This chapter addresses the challenges and limits posed by two sets of supranational law for any reform of international tax systems aimed at capturing profits made in specific digital business models. By ... [more ▼]

This chapter addresses the challenges and limits posed by two sets of supranational law for any reform of international tax systems aimed at capturing profits made in specific digital business models. By way of background, it first analyses the policy challenges arising from digitalization and lists a few policy responses that have been proposed or implemented recently (§3.02). Specifically, it will focus on specific withholding taxes (WHT) tailored to ‘digital transactions’, new source rules (‘digital nexus’, ‘virtual permanent establishment’ (VPE), ‘significant digital presence’ (SDP)) and specific new taxes directly targeting ‘digital business’ (‘equalization levies’ (EL) and ‘digital services tax’ (DST)). As these ideas are all subject to more detailed review in other chapters in this volume, they are described here only to the extent necessary to perform a generic analysis of potential incompatibilities with supra- and international law. The chapter then reviews well-known limits imposed by European Union (EU) law for tax policy- making with specific reference to such proposed policy responses, distinguishing between limits imposed on EU Member States (§3.03[A]) and on the EU as an independent actor (§3.03[B]). It then follows a less well-trodden path, discussing limitations on reforms arising from World Trade Organization (WTO) law (§3.04), before offering a brief concluding summary of the insights gained from the chapter (§3.05). [less ▲]

Artikel 24. Gleichbehandlung

in Tumpel, Michael; Aigner, Dietmar; Kofler, Georg (Eds.) DBA – Doppelbesteuerungsabkommen Kommentar (2019)

This contribution consists of a comprehensive commentary on the non-discrimination rule enshrined in the OECD Model Tax Convention, with a particular view on its implementation in Austrian tax treaties ... [more ▼]

This contribution consists of a comprehensive commentary on the non-discrimination rule enshrined in the OECD Model Tax Convention, with a particular view on its implementation in Austrian tax treaties and its effects in Austrian tax law. [less ▲]

Opinion Statement ECJ-TF 2/2018 on the ECJ Decision of 7 September 2017 in Eqiom (Case C-6/16), concerning the Compatibility of the French Anti-Abuse Rule Regarding Outbound Dividends with the EU Parent-Subsidiary Directive (2011/96) and the Fundamental Freedoms

in European Taxation (2018)

This is an Opinion Statement prepared by the CFE ECJ Task Force on Eqiom (Case C-6/16), in respect of which the Sixth Chamber of the Court of Justice of the European Union (ECJ) delivered its decision on ... [more ▼]

This is an Opinion Statement prepared by the CFE ECJ Task Force on Eqiom (Case C-6/16), in respect of which the Sixth Chamber of the Court of Justice of the European Union (ECJ) delivered its decision on 7 September 2017. The CFE welcomes the Eqiom decision. In an international context where the fight against tax avoidance and aggressive tax planning is intensifying, it is important to preserve the fundamental principles of a balanced tax system: Free choice of the least taxed route, legal certainty, respect for principles concerning burden of proof, etc. In this respect, the Court appears to be the guardian of these rights. In line with its previous decisions and upholding the fundamental ideas of the Internal Market, the ECJ in Eqiom and Deister and Juhler clearly confirms that Member States may neither employ general presumptions of abuse nor define any tax planning or structuring as abusive in light of secondary EU law or the fundamental freedoms. [less ▲]

General Anti-Avoidance Rules in EU Law (EU Report IFA Congress 2018)

in IFA (Ed.) Cahiers de droit fiscal international, Volume 103A (2018)

While the EU Treaties do not contain a general anti-abuse rule, the Court of Justice of the European Union (ECJ) uses the concept of abuse of law when interpreting the EU Treaties in multiple substantive ... [more ▼]

While the EU Treaties do not contain a general anti-abuse rule, the Court of Justice of the European Union (ECJ) uses the concept of abuse of law when interpreting the EU Treaties in multiple substantive areas of law, including direct taxation. Current EU mechanisms for protection against abusive practices have that case law as a common root. This Report therefore starts by evaluating the emergence of the concept of abuse in the case law of the ECJ with regard to the fundamental freedoms. In this respect, the Court has accepted that discriminatory anti-avoidance rules can be justified by overriding reasons in the general interest but only where such rule specifically relates to wholly artificial arrangements aimed at circumventing the application of the legislation of the Member State concerned. Moreover, general and special anti-abuse provisions are enshrined in secondary EU law instruments. This concerns the general anti-avoidance rule for the area of corporate taxation, which was introduced by the Anti-Tax Avoidance Directive (ATAD) and will be effective from 1 January 2019, and the more specific rules in the Parent-Subsidiary Directive (PSD), the Merger Directive (MD) and the Interest-Royalty Directive (IRD). This Report explains the scope of these provisions, their interpretation and application, and their relationship with primary EU law, tax treaties and national law. Finally, this Report provides a brief outlook on the impact of EU law on domestic tax systems in this field, stressing that general anti-abuse measures might create tensions with fundamental taxpayers’ rights, such as the right to legal certainty and the freedom to arrange one’s economic affairs. [less ▲]

Investment Fund Taxation - Domestic Law, EU Law, and Double Taxation Treaties

Book published by Kluwer Law International (2018)

The book covers the central questions arising in national law and tax policy, explores the regulatory and tax framework of the European Union (EU), and discusses the multifaceted interactions of both ... [more ▼]

The book covers the central questions arising in national law and tax policy, explores the regulatory and tax framework of the European Union (EU), and discusses the multifaceted interactions of both national and EU law with bilateral tax treaties. Through fourteen chapters following the editor's introduction, leading academic experts and practising specialists provide insights into all the most relevant aspects of funds taxation. [less ▲]

EU-US Relations in the Field of Direct Taxes from the EU Perspective: A BEPS-induced Transformation?

in Pistone, Pasquale; Weber, Dennis (Eds.) The Implementation of Anti-BEPS Rules in the EU: A Comprehensive Study (2018)

This chapter attempts to cover a range of interrelated questions that are all inextricably linked to the EU-US relationship in direct tax matters. Its main theme is the potential influence of legal and ... [more ▼]

This chapter attempts to cover a range of interrelated questions that are all inextricably linked to the EU-US relationship in direct tax matters. Its main theme is the potential influence of legal and political developments within the EU on this external relationship. Shining a critical light on the legality of some of the recent changes made to EU legislation and enforcement in the context of the global fight against BEPS, it argues that the US government's newly assumed active role with respect to EU tax policy may inadvertently strengthen tendencies to bring direct tax matters more comprehensively into the range of power of the Commission – including at the international level – as it creates an interest on the US side to negotiate directly with the 'rela decision makers' rather than intermediaries without sovereign power over the entirety of the issues. It concludes, however, that in the current state of integration of direct taxation within the EU, such a bilateral relationship and the conclusion of an EU-US DTA is not yet legally possible. This would likely change, however, if the EU were to adopt a comprehensive corporate taxation regime along the lines of the Commission's CCTB proposal. At the same time, the Commission can no longer be kept entirely on the sidelines in Member States' DTC negotiations. [less ▲]

Luxembourg: Taxation of Flight Personnel in Triangular Situations and Article 15(3) of the OECD Model

in Lang, Michael; Rust, Alexander; Owens, Jeffrey (Eds.) et al Tax Treaty Case Law Around the Globe 2017 (2018)

The case discussed in this note concerns an issue arising before the Cour administrative on the taxation of flight personnel of a Belgian airline. The individuals resided in Belgium, France, Germany, and ... [more ▼]

The case discussed in this note concerns an issue arising before the Cour administrative on the taxation of flight personnel of a Belgian airline. The individuals resided in Belgium, France, Germany, and the Netherlands, respectively, and where employed by a company in Luxembourg. Although the substantive issue discussed in the judgment is quite straightforward, interesting procedural questions arise from the rather unusual circumstance that the case was not brought to the courts by the former managing director of the company, who had been charged for the unremitted withholding tax under a joint liability rule. One of the crucial questions the court had to address in its judgment was whether the managing director could (still) rely on the limitation of tax jurisdiction following from the tax treaty. [less ▲]

The Controlled Foreign Company Regime

in Weber, Dennis; Van de Streek, Jan (Eds.) The EU Common Consolidated Corporate Tax Base - Critical Analysis (2018)

The Controlled Foreign Company (CFC) regime proposed by the Commission as part of the newly launched Common Corporate Tax Base (CCTB) project reflects the perceived need to strengthen the Union’s anti-tax ... [more ▼]

The Controlled Foreign Company (CFC) regime proposed by the Commission as part of the newly launched Common Corporate Tax Base (CCTB) project reflects the perceived need to strengthen the Union’s anti-tax avoidance measures, and specifically to discourage profit shifting to low-tax jurisdictions. The proposed rule largely reflects previous work done by the OECD as part of the BEPS project and the EU implementation measures in the Anti-Tax Avoidance Directive (ATAD), but it deviates from both in a number of its details. This contribution aims to provide a first technical analysis of the provision to reveal its scope, its mechanism, and apparent shortcomings. It furthermore tries to imbed it in its context of existing primary and secondary EU law. [less ▲]

Luxembourg National Report: Tax Avoidance Revisited in the EU BEPS Context

in Dourado, Ana Paula (Ed.) Tax Avoidance Revisited in the EU BEPS Context (2017)

This contribution analyses the status quo of anti-tax avoidance laws and doctrines in Luxembourg in reflection of the developments from the OECD BEPS project and the EU's reaction thereto. Starting from ... [more ▼]

This contribution analyses the status quo of anti-tax avoidance laws and doctrines in Luxembourg in reflection of the developments from the OECD BEPS project and the EU's reaction thereto. Starting from the traditional approach taken by the Luxembourg courts to the term "Steuerumgehung" in §6 StAnpG, it also refers to special and target anti-avoidance rules (SAARs and TAARs) notably in the area of transfer pricing. Please note that the contribution was finalised in summer 2016 and the initial temporal scope of the study had been set until the end of 2015. Later developments, in particular changes to transfer pricing in Luxembourg (Art. 56bis LIR) could therefore not be taken into account. [less ▲]