Alternative Dispute Resolution and Tax Disputes

Book published by Edward Elgar (2023)

The increased complexity of international tax rules since the inception of the BEPS project created the need for alternative dispute resolution. This realisation has led both the international community ... [more ▼]

The increased complexity of international tax rules since the inception of the BEPS project created the need for alternative dispute resolution. This realisation has led both the international community and European Union institutions to expand on the possibilities for intergovernmental mechanisms to address diverging interpretation of treaty rules by tax administrations in treaty partner states. These give rise to many questions on the implementation and integration of the new rules into domestic (court) procedures, their correct interpretation, and best practices in their application by tax officials, lawyers and arbitrators. This book addresses these questions in a holistic manner, starting with a comprehensive analysis of existing tax treaty norms and their practical application in MAP and arbitration procedures (Chapters 1–4). In its second part, it offers a timely expert analysis of primary and secondary EU law rules on tax dispute resolution, detailing the specifics of Directive 2017/1852 as well as their interaction with EU general principles, fundamental rights and internal market norms (Chapters 5–6). Next, Chapters 7–9 consider the taxpayer’s position in the primarily administrative dispute resolution process, focussing on taxpayer rights, the domestic legal remedies relevant to the implementation and review of MAPs and the merits of mediation as a tool for taxpayers to resolve disputes with tax administrations. Finally, the fourth part of this book (Chapters 10–13) considers the relevance for tax disputes of mechanisms found in trade and investment law, both as a source of insight for the improvement of tax-specific procedures and as mechanisms that can be applied directly to tax disputes. [less ▲]

Opinion Statement ECJ-TF 3/2022 on the EFTA Court Decision of 1 June 2022 in PRA Group Europe (Case E-3/21), on the Discriminatory Interaction between the “Interest Barrier” and Group Contributions

in European Taxation (2023), 63(1), 27-34

This is an Opinion Statement prepared by the CFE ECJ Task Force on PRA Group Europe (Case E-3/21), in respect of which the EFTA Court delivered its decision on 1 June 2022. At issue in PRA Group Europe ... [more ▼]

This is an Opinion Statement prepared by the CFE ECJ Task Force on PRA Group Europe (Case E-3/21), in respect of which the EFTA Court delivered its decision on 1 June 2022. At issue in PRA Group Europe was the interaction between the Norwegian “interest barrier rule” (“interest limitation rule”), which generally limits the deductibility of interest payments to affiliated resident and non-resident entities to 30% of EBITDA, and the group contribution rules, which permit tax effective transfers between group members, but are limited to Norwegian entities. As group contributions also increase the EBITDA of the recipi- ent Norwegian entity (and decrease it at the level of the paying Norwegian entity), companies in the Norwegian tax group can achieve interest deductions under the inter- est barrier rules where profits (“tax EBITDA”) and interest expenses are distributed unevenly between the companies in the group, while a similar opportunity to escape (or lessen the impact of) the interest barrier rules is not available to cross-border groups. The EFTA Court took a combined perspective on the interaction of these rules and found them to constitute an unjustified restriction of the freedom of establishment under articles 31 and 34 of the European Economic Area Agreement (1992). The EFTA Court’s decision is particularly interesting from an EU law perspective, as the interest barrier rule of article 4 of the EU Anti-Tax Avoidance Directive (2016/1164) (ATAD) similarly foresees an option for Member States to introduce a domestically limited “interest barrier group” to permit a calculation of exceeding borrowing costs and the EBITDA at the local group level. [less ▲]

Opinion Statement ECJ-TF 1/2022 on the ECJ Decision of 25 November 2021 in État Luxembourgeois v. L (Case C-437/19) on the Conditions for Information Requests and Taxpayer Remedies

in European Taxation (2022), 62(4), 219-223

In the judgment commented on in this article, the Court of Justice clarified the conditions for the identification of a taxpayer in group requests under the DAC (Directive 2011/16) and confirmed that ... [more ▼]

In the judgment commented on in this article, the Court of Justice clarified the conditions for the identification of a taxpayer in group requests under the DAC (Directive 2011/16) and confirmed that article 47 of the Charter on Fundamental Rights requires the information holder to be given the necessary information to assess the request’s legality. [less ▲]

Opinion Statement ECJ-TF 2/2021 on the ECJ Decision of 25 February 2021 in Société Générale (Case C-403/19) on the Calculation of the Maximum Amount of a Foreign Direct Tax Credit

in European Taxation (2022)

The Court’s decision in Société Générale reinforces established case law that EU law neither prohibits juridical double taxation nor does it impose an obligation on the residence Member State to prevent ... [more ▼]

The Court’s decision in Société Générale reinforces established case law that EU law neither prohibits juridical double taxation nor does it impose an obligation on the residence Member State to prevent the disadvantages that could arise from the exercise of competence thus attributed by the two Member States. The parallel existence of taxing jurisdiction, however, must be distinguished from the exercise of such jurisdiction by each Member State. While Member States are free to determine the connecting factors for the allocation of taxing jurisdiction in tax treaties, in exercising the “power of taxation, so allocated by bilateral conventions for the avoidance of double taxation, the Member States must comply with EU rules and, more particularly, observe the principle of equal treatment”. It is generally accepted in the Court’s case law that both the ordinary credit and exemption (including exemption with progression) methods are permissible to avoid double taxation. In Société Générale, this position was confirmed, specifically as regards the “maximum deduction” under the ordinary credit method in tax treaties, even though this treatment can result in a disadvantage for cross-border income as compared with domestic income. As the disadvantage in Société Générale was due to the difference between gross-basis taxation of dividends in the source Member States (Italy, the Netherlands and the United Kingdom) and net-basis taxation of those foreign-sourced dividends in the residence state (France), it remains to be seen whether or not future cases will bring clarity in light of the Seabrokers decision of the EFTA Court, which examined how expenses can be lawfully allocated to foreign income from the perspective of the residence Member State. [less ▲]

Opinion Statement ECJ-TF 2/2020 on the ECJ Decision of 3 March 2020 in Vodafone Magyarország Mobil Távközlési Zrt. (Case C-75/18) on Progressive Turnover Taxes

in European Taxation (2020), 60(12), 555-564

This CFE Opinion Statement discusses the decision of the Grand Chamber of the ECJ in Vodafone. The Court held that the imposition of the Hungarian progressive turnover-based tax on the telecommunications ... [more ▼]

This CFE Opinion Statement discusses the decision of the Grand Chamber of the ECJ in Vodafone. The Court held that the imposition of the Hungarian progressive turnover-based tax on the telecommunications sector did not infringe the EU fundamental freedoms or article 401 of the VAT Directive (2006/112), and that the question regarding the prohibition of State aid was inadmissible. Vodafone is especially important in respect of the current debate regarding turnover-based digital services taxes. [less ▲]

A Guide to the Anti-Tax Avoidance Directive

Book published by Edward Elgar (2020)

This book provides a concise, practical guide to the European Union’s Anti-Tax Avoidance Directive (ATAD). Presenting unique insights into the ATAD’s five specific anti-avoidance rules, its chapters ... [more ▼]

This book provides a concise, practical guide to the European Union’s Anti-Tax Avoidance Directive (ATAD). Presenting unique insights into the ATAD’s five specific anti-avoidance rules, its chapters explain the background of those rules, the directive’s interactions with relevant jurisprudence, and the challenges posed to the ATAD’s interpretation and implementation in domestic law. Key features include: • critical, article-by-article analysis of the ATAD • contextual information on the legislative environment in which the ATAD operates, embedding it in the wider landscape of CJEU jurisprudence • insights into the day-to-day application of the ATAD rules in practice • contributions from leading academics and practitioners in the field of tax law • examples of the challenges to the interpretation and implementation of ATAD, taken from a range of EU Member States. European and international tax advisors, along with policy makers in the field of tax law, will find this book to be a comprehensive yet accessible guide to the ATAD and its correct application. Those who carry out research in European tax law can also benefit from this book’s critical approach to the ATAD and the questions that surround anti-tax avoidance legislation in the European Union. [less ▲]

Opinion Statement ECJ-TF 1/2020 on the General Court Decisions of 24 September 2019 in "Starbucks" and "Fiat" on State Aid Granted by Transfer Pricing Rulings

in European Taxation (2020), 60(5), 222-230

This CFE Opinion Statement, submitted to the EU Institutions on 28 January 2020, discusses the General Court decisions of 24 September 2019 in The Netherlands v. Commission (Starbucks) (Joined Cases C-760 ... [more ▼]

This CFE Opinion Statement, submitted to the EU Institutions on 28 January 2020, discusses the General Court decisions of 24 September 2019 in The Netherlands v. Commission (Starbucks) (Joined Cases C-760/15 and T-636/16) and Luxembourg v. Commission (Fiat Finance and Trade) (Joined Cases T-755/15 and T-759/15), on State aid granted by transfer pricing rulings. [less ▲]

Opinion Statement ECJ-TF 3/2019 on the ECJ Decision of 22 November 2018 in Sofina (Case C-575/17) on Withholding Taxes, Losses, and Territoriality

in European Taxation (2020), 60(2/3), 91-97

This CFE Opinion Statement, submitted to the EU Institutions on 10 October 2019, comments on the Decision in Sofina (Case C-575/17), in respect of which the Fifth Chamber of the ECJ delivered its decision ... [more ▼]

This CFE Opinion Statement, submitted to the EU Institutions on 10 October 2019, comments on the Decision in Sofina (Case C-575/17), in respect of which the Fifth Chamber of the ECJ delivered its decision on 22 November 2018. The Court held that the imposition of French dividend withholding tax violated the freedom of capital movement in light of the non- resident’s overall loss situation. [less ▲]

Opinion Statement ECJ-TF 1/2019 on the ECJ Decision of 31 May 2018 in Hornbach-Baumarkt (Case C-382/16)

in European Taxation (2019), 59(9), 446-452

In this Opinion Statement, submitted in April 2019, the CFE discusses the ECJ decision in Hornbach-Baumarkt (Case C-382/16) concerning the application of transfer pricing rules to transactions between ... [more ▼]

In this Opinion Statement, submitted in April 2019, the CFE discusses the ECJ decision in Hornbach-Baumarkt (Case C-382/16) concerning the application of transfer pricing rules to transactions between resident and non-resident associated enterprises. [less ▲]

Opinion Statement ECJ-TF 3/2018 on the ECJ Decision of 12 June 2018 in Bevola (Case C-650/16), Concerning the Utilization of “Definitive Losses” Attributable to a Foreign Permanent Establishment

in European Taxation (2019), 59(2/3), 113-119

This CFE Opinion Statement, submitted to the European Institutions in November 2018, discusses the ECJ’s decision in Bevola (Case C-650/16), which reaffirms that the concept of “definitive losses” first ... [more ▼]

This CFE Opinion Statement, submitted to the European Institutions in November 2018, discusses the ECJ’s decision in Bevola (Case C-650/16), which reaffirms that the concept of “definitive losses” first established in Marks & Spencer (Case C-446/03) and refined, inter alia, in Commission v. United Kingdom (Case C-172/13) is still applicable to permanent establishments and that the standard for testing comparability continues to be related to the aim pursued by the national provision at issue. Further, the CFE invites the EU to consider harmonizing measures that will introduce immediate loss utilization with a recapture mechanism. [less ▲]