Opinion Statement ECJ-TF 1/2017 on the Decision of the Court of Justice of the European Union in SECIL (Case C-464/14) Concerning the Free Movement of Capital in Third Countries

in European Taxation (2017)

The Confédération Fiscale Européenne welcomes the precise and instructive decision in SECIL. The decision clarifies the application of article 63 of the TFEU on the free movement of capital to tax ... [more ▼]

The Confédération Fiscale Européenne welcomes the precise and instructive decision in SECIL. The decision clarifies the application of article 63 of the TFEU on the free movement of capital to tax legislation that denies tax benefits to dividends originating in non-EU Member States and demonstrates that Member States may not rely on article 64(1) of the TFEU, i.e. the “grandfathering clause”, if the logic of their tax legislation changed after 31 December 1993, which change can also be brought about through the conclusion of directly applicable international agreements (for example, Euro-Mediterranean Agreements). The Confédération Fiscale Européenne appreciates the further clarification that provisions with direct effect in EU international agreements with third countries, such as the Euro-Mediterranean Agreements, can create economic rights that can be relied upon by taxpayers. [less ▲]

Luxembourg: Applying Article 16 to a “Collège des Commissaires”

in Kemmeren, Eric; Smit, Daniel; Essers, Peter (Eds.) et al Tax Treaty Case Law around the Globe 2016 (2017)

This case note examines a decision by the Cour administrative of Luxembourg concerning the qualification of the fees earned by a commissaire of a partnership limited by shares under the Luxembourg-South ... [more ▼]

This case note examines a decision by the Cour administrative of Luxembourg concerning the qualification of the fees earned by a commissaire of a partnership limited by shares under the Luxembourg-South Africa tax treaty. It concludes that, while the result of the judgment is unobjectionable, it failed to explore the boundaries of the meaning of the term "director" in ways that could give clearer indications for other cases. [less ▲]

Luxembourg: Exchange of Information and EU Fundamental Rights (C-682/15, Berlioz Investment Fund S.A.)

in Lang, Michael; Pistone, Pasquale; Rust, Alexander (Eds.) et al CJEU – Recent Developments in Direct Taxation 2016 (2017)

The present case concerns the question of whether the right to an effective remedy — as guaranteed in Article 47 of the Charter of Fundamental Rights of the European Union — means that a Member State must ... [more ▼]

The present case concerns the question of whether the right to an effective remedy — as guaranteed in Article 47 of the Charter of Fundamental Rights of the European Union — means that a Member State must allow a company to challenge an order requesting information for the purposes of the tax assessment of another party in a court that would have unlimited authority to review the legitimacy of that order, including the “foreseeable relevance” of the original request made by another Member State. The case has the potential to provide a crucial piece in the legal puzzle that surrounds exchange of information in tax matters in the triangle of domestic law, tax treaty law and EU law, with particular emphasis on the protection of taxpayer (and related party) rights. However, due to the actual circumstances of the case, it does not appear likely that the CJEU will address all of the questions asked by Luxembourg’s Cour administrative. In particular, the meaning of “foreseeable relevance” under Directive 2011/16 may be seen as having little relevance for the outcome of the case in light of the broad meaning given to it by Luxembourg’s statute so that the CJEU may leave it unresolved even if it agrees with the domestic court on the application of Article 47 of the Charter. [less ▲]

"LuxLeaks IV": Das Belgische Excess Profit Exemption Regime als steuerliche Beihilfe

in Jaeger, Thomas; Haslinger, Birgit (Eds.) Beihilferecht Jahrbuch 2017 (2017)

The case under consideration in this contribution concerns the Belgian Excess Profit Exemption Regime, ruled to be illegal state aid by the Commission in 2016. Two questions arise from the case: First ... [more ▼]

The case under consideration in this contribution concerns the Belgian Excess Profit Exemption Regime, ruled to be illegal state aid by the Commission in 2016. Two questions arise from the case: First, what relevance the arm's length principle has under EU state aid law; second, whether the existence of "double non-taxation" (or so-called "white income") has any implications for a finding of state aid. The Commission takes the position that the arm's length principle is a necessary element of any Member State's corporate tax system as a consequence of the general equality principle underlying Article 107 TFEU. On the second question, the Commission's analysis is somewhat less unambiguous, but seems to clearly assign some relevance to the existence of double non-taxation. Both positions are reviewed critically in this contribution. [less ▲]

Nationality Non-Discrimination and Article 24 OECD - Perennial Issues, Recent Trends and New Approaches

in Pistone, Pasquale; Weber, Dennis (Eds.) Non-Discrimination in Tax Treaties: SElected Issues from a Global Perspective (2016)

Article 24 OECD Model Tax Convention consists of four separate clauses with different wording, structure and apparent purpose, each concerned with preventing a particular form of discrimination. This ... [more ▼]

Article 24 OECD Model Tax Convention consists of four separate clauses with different wording, structure and apparent purpose, each concerned with preventing a particular form of discrimination. This contribution attempts to shed some light at principles that underlie and inform the interpretation of article 24 in its entirety and to comment on the clarifications made in this respect by the OECD. It then explores the scope of application of the nationality non-discrimination provision, with a particular focus on two questions: Whether companies can rely on the nationality non-discrimination provision and how article 24(1) interacts with other non-discrimination norms, both in tax treaties and in other legal sources. [less ▲]

Opinion Statement ECJ-TF 1/2016 on the Decision of the European Court of Justice in Joined Cases Miljoen (Case C-10/14), X (Case C-14/14) and Société Générale (Case C-17/14) on the Netherlands Dividend Withholding Tax

in European Taxation (2016)

The Confédération Fiscale Européenne welcomes the ECJ’s decision in the case, which strongly affirms the right of non-resident taxpayers not to be taxed at a higher overall level than resident ... [more ▼]

The Confédération Fiscale Européenne welcomes the ECJ’s decision in the case, which strongly affirms the right of non-resident taxpayers not to be taxed at a higher overall level than resident taxpayers, even where the systems of taxation differ between both types of taxpayers in other respects. This will lead to significant improvement of the situation for cross-border portfolio investors, who continue to suffer from withholding taxes imposed by several Member States. The Confédération Fiscale Européenne further welcomes the various clarifications in this respect, particularly concerning the meaning of the Truck Center decision, the definition of personal allowances within the scope of the Schumacker decision and its case law on the possible neu- tralization of disadvantages by way of bilateral tax treaties. The Confédération Fiscale Européenne notes that, despite these clarifications, uncertainty continues to persist with regard to the significance of a credit carry-forward granted by a residence state for a possible neutralization of disadvantages, which the ECJ did not directly address, and with respect to the need for reimbursement of withhold- ing taxes where (only) a partial offset in the residence state is available. The Confédération Fiscale Européenne wishes to take the opportunity to urge the Member States and the European Institutions to continue to work on improving procedures with regard to relief from withholding taxation in the source state under tax treaties and EU law. [less ▲]

Opinion Statement ECJ-TF 4/2015 on the Decision of the European Court of Justice in Groupe Steria SCA (Case C-386/14) on the French Intégration Fiscale

in European Taxation (2016)

The Confédération Fiscale Européenne welcomes the Court’s clarification that cross-border company structures may not automatically be excluded from all the benefits of group taxation regimes but that ... [more ▼]

The Confédération Fiscale Européenne welcomes the Court’s clarification that cross-border company structures may not automatically be excluded from all the benefits of group taxation regimes but that rather, in general, a case-by-case assessment has to be made. This resolves concerns arising from the X Holding case, which, it is now clear, only addresses cross-border loss relief and perhaps tax-neutral intra-group transactions. [less ▲]

The Effect of a Tax Treaty Tie-breaker for Dual Residents

in Lang, Michael; Owens, Jeffrey; Pistone, Pasquale (Eds.) et al Tax Treaty Case Law around the Globe 2015 (2016)

Case 33872C, which was decided by Luxembourg’s Cour administrative on 18 December 2014, concerned two questions of tax treaty law: first, whether the taxpayer in question was a resident of Luxembourg or ... [more ▼]

Case 33872C, which was decided by Luxembourg’s Cour administrative on 18 December 2014, concerned two questions of tax treaty law: first, whether the taxpayer in question was a resident of Luxembourg or Germany during the tax period concerned in accordance with the tie-breaker rule of the applicable double taxation convention (DTC); and second, what was the effect of that qualification for the application of domestic tax law provisions in Luxembourg that do not affect Germany’s taxing right as guaranteed in the DTC. Does the tie-breaker rule in Article 4(1) of the OECD Model determine how a dual-resident taxpayer is to be treated under domestic law or does it merely serve to allocate the role of residence country and source country, respectively? The court answered this question in the negative, holding that the taxpayer was a resident of Germany under the tax treaty tie-breaker rule, but that the tax treaty did not prevent Luxembourg from treating him (a non-resident under the terms of the tax treaty) as a resident to the extent that doing so did not violate Germany’s primary taxing right, which resulted in (progressive) joint taxation with his spouse in Luxembourg. The court's reasoning is sound based on general principles of the relationship between domestic law and tax treaties, but did not address more intricate arguments that arise from the concrete wording of the treaty. This contribution explores these in addition to analysing the court's decision. [less ▲]

Landmark Decisions of the ECJ in Direct Taxation

Book published by Kluwer Law International (2015)

This book is the result of a conference held at the University of Luxembourg on 23 January 2014, which aimed to analyse the Court of Justice’s most important decisions on direct taxation and their ... [more ▼]

This book is the result of a conference held at the University of Luxembourg on 23 January 2014, which aimed to analyse the Court of Justice’s most important decisions on direct taxation and their transformative impact on direct taxation in the EU over the last three decades. Each chapter in this book is based on the authors’ presentations at the conference, in which they focused on a particular landmark decision of the Court of Justice as a starting point for the development of a specific doctrine and followed its development through decisions in later years, critically assessing the strengths and weaknesses of the Luxembourg Court’s reasoning and its path through the complex field of cross-border income taxation. Due to the nature of this project, the individual chapters’ topics, such as the Schumacker doctrine, the Marks & Spencer exception, or the impact of Cadbury Schweppes, will seem familiar to readers who are well versed in EU tax law. Yet, the depth of the analysis of each landmark case, which is explored from its historic roots and original reasoning, allows the reader to gain an unparalleled understanding of the development and minute changes in the relevant subsequent jurisprudence as the authors chart a way through the nuances of the Court’s arguments. Necessarily a snapshot of the current state of the law, it allows this book to remain relevant as the jurisprudence develops further over the years to come. [less ▲]

Implications of the BEPS-initiative for a small country like Luxembourg

in Georges, Nathalie; Schronen, Danielle; Urbé, Robert (Eds.) Sozialalmanach 2015 (2015)