bluuebunny/crossref_metadata_2025 huggingface dataset:
VAT Applicability to Employee Retail Vouchers
Authors: Diehl Kevin A.
Published: March 2022

While the European Court of Justice issues many important rulings with respect to competition, transportation, free movement of capital, and other policies, its contributions to tax policy sometimes get overlooked. Too many view taxation as just an issue of national import. However, the European Court of Justice has made some extraordinarily important contributions in the area of taxation. The recently discussed case of Astra Zeneca UK LTD v. HMRC (C-40/09, ) proves this notion. The following discusses the facts, governing guidance, issues, resolutions, drawbacks, and future applications. On appeal from the VAT and Duties Tribunal of Manchester, United Kingdom, this case addresses whether UK tax law with regard to value-added taxes (VATs) is correct. The judgment considers whether VAT applies to fringe benefits beyond cash (retail vouchers) from an employer to an employee. For global context here, the US tax system’s treatment of fringe benefits can be considered. In the United States then, there is no VAT. However, for income tax purposes, fringe benefits result in the best possible treatment. As the employers deduct the fringe benefits provided, the employees exclude the fringe benefits from their gross income.
A Financial Transaction Tax for Europe?
Authors: Vogel Thorsten , Cortez Benjamin
Published: March 2022

In this article, the concept of a tax on financial transactions in Europe is discussed. In the wake of the financial crisis of 2007, the European Union (EU) as well as single Member States are considering imposing a tax on financial transactions to mitigate short-term speculative trading and to generate substantial tax revenue to refinance the costs incurred during the crisis. The implementation of a tax on financial transactions would, from an economic perspective, have a range of consequences for the participants in the global financial markets, which must be considered. The authors analyse the potential economic consequences of a financial transaction tax (FTT) and derive solutions to mitigate negative effects. This article also intends to derive suggestions concerning the structure of an FTT. Therefore, the fundamental structures of different FTT regimes in selected states are presented. In this regard, the authors chose to illustrate the risks as well as the rewards by discussing the experiences of the FTT regimes in Sweden and in the United Kingdom in depth.
Cross-Border Obstacles and Solutions for Pan-European Pensions
Authors: Starink Bastiaan , Van Meerten Hans
Published: March 2022

Pensions are currently at the top of the agenda of companies, employees, pension carriers, governments and, last but not least, the European Commission. This is partly because of the economic crisis pension funds are in right now but also because of the ageing population and the impact on public treasuries. These problems however cannot be solved easily. A well-functioning internal market for pan-European pensions without tax barriers can however contribute in solving the current pension crisis. In this article the authors describe the current situation and legislation regarding cross-border pension carriers and pension schemes within the EU. Since taxation is still one of the largest barriers for a well-functioning internal market for pension schemes, this aspect gets a lot of attention of the authors. They do not only describe current legislation and recommend changes; they also present a solution which is already being developed and is in line with current legislation: a multi-country tax-efficient pension scheme.
Tax in Troubled Time: Is It the Time for A Common Corporate Tax Base in the EU?
Authors: Munin Nellie
Published: March 2022

The essay introduces the main dilemmas faced by decision makers in the European Union (EU) regarding the initiation of a Common Corporate Tax Base (CCTB) in the EU. It introduces the policy considerations and conflict of interests among EU Members, which prevented the initiation of a CCTB in the EU by now; the possible variations of CCTB, including their advantages and disadvantages; and the possibility of effectuating the enhanced cooperation procedure to initiate a CCTB among part of EU Members. The essay then analyses the possible implications of such a step on the participating and non-participating EU Members, on the EU as a whole, and on third countries. To that extent, the essay attempts to draw a lesson from other 'Europe in two speed' practices: the Economic and Monetary Union (EMU), the Schengen agreements, and the security policy. The main findings are that a CCTB will not necessarily provide only for benefits of the Members involved in it and that the formula adopted for such an arrangement may be decisive to its short-term and long-term consequences. It should therefore be carefully weighed.
Fiscal State Aid and Real Estate
Authors: Vermeulen Hein
Published: March 2022

State aid is an issue that does not immediately come to mind on the topic of real estate collective investment vehicles (CIVs). Nevertheless the question of state aid plays an important role. Last year, the European Commission charged with the monitoring of state aid has taken an important decision on this matter. The Finland government had asked the European Commission for a judgment on a fiscal regime for Real Estate Investment Trusts (REITs) to be implemented by Finland. In this paper, I will focus on this decision and the effect it may have on the Dutch fiscal regimes for real estate CIVs.

In paragraph 1, I will describe the rationale for fiscal regimes of CIVs: fiscal neutrality. Then in paragraph 2, I will make some basic remarks on state aid. Paragraph 3 contains an outline of the Dutch fiscal regimes for real estate CIVs. In paragraph 4, these Dutch fiscal regimes for real estate CIVs are examined in the light of state aid. The decision of the European Commission with respect to Finnish REITs is discussed in paragraph 5. I end in paragraph 6 with the significance of this decision for the Dutch fiscal regimes for real estate CIVs as well as with a conclusion.
Imposing EU VAT on Unlawful Digital Supplies?
Authors: Rendahl Pernilla
Published: March 2022

This article discusses if EU value added tax (VAT) can be imposed on unlawful digital supplies by evaluating applicable criteria developed by the Court of Justice (COJ). Unlawful digital supplies are delimited to cover trade with digital materials that are copyright protected and exchanged through peer-to-peer networks without the permission of the copyright holder. The criteria that are evaluated for imposing EU VAT on these unlawful supplies covers the scope of VAT, whether the supplies can be seen as consumption, identification of the taxable supplier and if the supplies can be considered as taxable. The main difficulties with deciding if EU VAT can be imposed on unlawful digital supplies is in the argumentation used by the COJ in primarily two cases. The difficulties are, first, based on the Hong Kong Trade case, where the COJ interprets the scope of economic activity as not covering services supplied free of charge. Second, in the Tolsma case, the COJ discusses the need of a direct link establishing if there is a taxable transaction. For imposing EU VAT on unlawful digital supplies, the market place connecting the users and the organization providing the market place can rather be considered as an indirect link than a direct link establishing a legal relationship.
The Tax Treatment of Network Contracts
Authors: Vergani Marco
Published: March 2022

In April 2009, Italy adopted a law on the 'network contract', under the auspices of the Small Business Act (SBA), aimed at enhancing collaboration among enterprises to increase their potential for innovation, research, and development. This article provides a brief description of the essential elements of the network contract under Italian law as well as the fiscal measures introduced by Article 42 of Law Decree No. 78 of 31 May 2010 in order to support company networks. In conclusion, we will briefly examine the reasons why such fiscal measures were not considered a State aid by the European Commission.
Cross-Border Loss Relief in the EU: Implications of Recent Developments in Germany Regarding Outbound Permanent Establishments
Authors: Quilitzsch Carsten , Gebhardt Ronald
Published: March 2022

Even though the European Court of Justice (ECJ) had been forming the basic framework of cross-border relief of final losses in the EU, the issue was widely disputed among commentators. For this reason, the German Federal Finance Court (BFH) in 2010 had been given the chance to further concretize the concept of 'final losses'.

The primary focus of the present article is to illustrate the BFH's ruling as well as to extract possible implications including tax planning opportunities. Implications contain comments on the criteria to constitute a final loss, since the BFH decided to differentiate between legal and de facto reasons. Once a loss has to be considered final, the question has to be answered when it is to be relieved (retroactive versus shifted approach). Eventually the authors discuss the matter on whether the concept of cross-border loss relief has to be applied to taxes following the principle of territoriality. The latter question is of utmost interest, as the BFH approved to deduct final losses not only from the domestic (corporate) income tax base but also from the German trade tax base.
Non-discriminatory Tax Obstacles
Authors: Douma Sjoerd
Published: March 2022

In Case C-76/90 Säger, the European Court of Justice (ECJ) held that the EU free movement provisions require not only the elimination of all discrimination on grounds of nationality but also the abolition of any restriction, when it is liable to prohibit or otherwise impede economic activities. A national measure that is liable to prohibit or otherwise impede economic activities restricts free movement even in cases where there is no allegation of discrimination on grounds of nationality. The alleged 'problem' with this formulation is that it makes no reference to the size or scale of the impediment: it is sufficient that there is one or liable to be one (there is no de minimis rule). Also, it is not necessary to establish a discrimination of cross-border activity. It is a controversial question whether, on this basis, non-discriminatory tax measures can be tested against the free movement provisions. The prevailing view in literature is that the Säger formula cannot, without modification, be applied in direct tax cases, because another approach would encroach too much on the tax sovereignty of EU Member States. This article examines whether this fear is justified. It does so by having recourse to Robert Alexy's theory of principles and a thorough analysis of ECJ case law.
Twenty Years of the EC Tax Review
Authors: van Arendonk Henk
Published: March 2022

The Neumark report draws attention on several occasions to taxes that affect citizens, including income tax, wealth tax, inheritance tax and taxes on motor vehicles, while also making a number of recommendations. However, the subject of citizens and taxation attracted little attention in the first fifty years of the EU, with the primary focus of cooperation being on economic matters. A Savings Tax Directive was adopted, and there has also been quite some ECJ case law on specific national schemes' compliance, or otherwise, with EU law. The Treaty of Maastricht widened European cooperation to include the second and third pillars, and also of course monetary cooperation. Another relevant development was the introduction of Citizenship of the Union. Since the Treaty of Lisbon came into force on 1 December 2009, Brussels has been devoting increasing attention to the citizens of Europe, including in the field of taxation. Tax obstacles for citizens in cross-border situations now need to be identified and resolved so that European citizens, too, can enjoy the full benefits of the single market.
The Repartition of Tax Powers in Federal States within the Context of the European Union
Authors: Peeters Bruno
Published: March 2022

In 1962, when the Neumark Report was published, the issue of possible limitations under European law on the repartition of tax powers among sub entities by Member States did not seem to be under discussion explicitly. Of the six Member States at the time, only Germany and Italy had a federal structure. Moreover the regions in these countries had only limited tax autonomy. Today's European Union is made up of many more Member States which have in one way or another transferred tax powers to regions than in 1962. This paper examines to what extent Member States have to take into account EU law when they transfer tax powers to the regions. Especially the impact of the non-discrimination principle and the fundamental freedoms of the TFEU are examined, as well as the influence of EU's policy on state aid.
Double Tax Conventions on Income and Capital and the EU: Past, Present and Future
Authors: Kemmeren Eric C.C.M.
Published: March 2022

Double tax conventions on income and capital (DTC) build bridges between the economies of the contracting States. This paper discusses the position of DTCs in the EU based on two questions: (1) What was, is, will be, should have been, and should be the role of DTCs in the EU? (2) How did affect, does affect, will affect, should have affected, and should affect EU law DTCs? To answer these questions, the paper will look back, at the state of the art, and to the future. After setting a benchmark, it will discuss the past, starting with Art. 220 EEC Treaty (repealed in 2009), the Neumark Report (1962), the preliminary draft EC Multilateral Tax Convention on Income and Capital (1968), the Ruding Report (1992) and the European Commission's initiative on EC law and tax treaties (2005). The current position will primarily be discussed based on a number of issues addressed by the CJEU. The future will be discussed based on the recent Commission's communication on double taxation and the internal market and the instrument of a redeveloped EU Model Tax Convention. After fifty years of talk after the Neumark Report, it is now time for real and accurate actions within the EU in respect of DTCs. The paper ends with a call to the Commission and the Council to take the lead.
EU Freedoms, Non-EU Countries and Company Taxation: An Overview and Future Prospect
Authors: Smit Daniël S.
Published: March 2022

Practice shows that the Member States of the European Union maintain a diversified range of economic relations with non-EU Member States. A large number of non-EU-based enterprises are carrying on business in the European Union. Conversely, numerous EU-based enterprises are also carrying on business outside the territory of the Union. Accordingly, trade and investment between Member States and non-Member States is nowadays similarly promoted by abolishing or reducing tax or other obstacles to international flows of goods, services and/or investment between the Member States and third countries. One may recall in this regard the large number of economic integration agreements which the Union has concluded over the past decades with countries all around the world, such as countries in Eastern Europe, the Euro-Mediterranean countries and the African, Caribbean and Pacific states and which, to a greater or lesser extent, provide for liberalization of trade and investment between the Union and the respective non-Member State. The Treaty on the Functioning of the European Union itself also provides for a substantial degree of economic openness vis-à-vis third countries, particularly by means of the Treaty provisions relating to the free movement of capital. It is this unique legal relationship between the EU Member States vis-à-vis the rest of the world that this article takes as a starting point. It examines and assesses the extent to which the impact on Member States' corporate income tax systems of the liberalization provisions included in the above instruments is similar, or should be similar, to the impact that the free movement provisions included in the Treaty have on Member States' corporate income tax systems in an intra-Union context.
Inter-country Equity and Intra-group Transactions at EU Level: An Analysis of the CCCTB Proposal and ECJ Tax Cases
Authors: Garbarino Carlo
Published: March 2022

The article looks at the erosion of national corporate tax bases achieved through intra-group transactions involving affiliated companies located in different Member States. This issue has been addressed by the ECJ in a set of cases which constitute an evolution of the traditional jurisprudence on direct taxes that has mainly dealt with the issues of discrimination and restriction on freedom of establishment and on the free movement of workers, capitals, services. The article first addresses the group cases in which the Court initially considered from an host country perspective the intra-group transactions between affiliated companies in connection to payments of intra-group interest in the context of the so-called thin-capitalization cases. The article then discusses the group cases in which the Court extended the host country analysis to intra-group profit transfers that can be made under group contribution regimes, or that are carried out through intra-group allocations of financial costs. The article then addresses the group cases decided by the Court from a home country perspective that involved recognition by the parent company of tax situations of foreign-controlled companies. Finally the article verifies how the recent CCCTB Proposal impacts on the rules relating to intra-group transactions that derive from the case law of the ECJ as discussed in the article.
Brussels Takes Charge in the Pensions Dossier
Authors: Dietvorst Gerry , Bollen-Vandenboorn Anouk H.H.
Published: March 2022

At the beginning of this year, the White Paper An Agenda for Adequate, Safe, and Sustainable Pensions1 (hereinafter: White Paper) was published. This happened about one and a half years after the Green Paper Towards Adequate, Sustainable, and Safe European Pension Systems2(hereinafter: Green Paper) was published. The reactions to both documents vary from 'a very important document' to 'a missed chance' and 'a lot of emotion and little substance'. We regard both these documents as important and guiding for the pension systems in the European Union (hereinafter: EU). They demonstrate the role that Brussels envisages for itself and it offers considerable support for Member States to carry out reforms. The White Paper offers a rough sketch, so to speak, for the pension systems of the EU.
The New Dutch Base Exemption Regime and the Spirit of the Internal Market
Authors: Wisman Ciska , de Wilde Maarten F.
Published: March 2022

As of 1 January 2012, the Dutch corporate income tax (CIT) system provides for international juridical double tax relief (DTR) under a mechanism referred to in Dutch tax practice as the 'base exemption for foreign business profits' (author's translation). The newly introduced DTR mechanism replaces the Dutch-style 'tax exemption with progression method' in the area of corporate taxation regarding proceeds derived from foreign-source business activities. The rationale for this legislative shift, according to the Dutch tax legislator, is to arrive at an augmented level of converged tax treatment for corporate taxpayers carrying on business operations abroad either directly (i.e., through a permanent establishment; 'PE') or indirectly (i.e., through a subsidiary). One of the introduced tax effects is that current losses suffered by resident corporate taxpayers from business activities carried on abroad through a PE are no longer taken into account for CIT calculation purposes. The tax legislator implicitly justifies its amendments by labelling the immediate horizontal cross-border loss set-off possibilities as available under the former DTR mechanism as a cash flow advantage granted to Dutch resident corporate taxpayers. That characterization reveals an underlying normative consideration. We do away with an 'advantage' to arrive at a taxing system devoid of anomalies at this point. The Dutch tax legislator suggests an improvement. But has he not in fact created a disadvantage? And, by doing so, infringed upon the spirit of the internal market within the European Union (EU) in the process?
The Courts Position on Cross-Border Losses: A Quest for the Well-Being of EU Citizens?
Authors: Kiers Martje , Monteiro Roel
Published: March 2022

On 6 September 2012, a new chapter was added to the cross-border loss relief litigation saga with the European Court of Justice's (the Court) ruling in Philips Electronics. This case concerned the compatibility of the British group relief regime with the freedom of establishment. Under this regime, a loss sustained by a permanent establishment in the United Kingdom (UK) which corresponds to any foreign tax is not eligible for group relief. As such a requirement does not exist for losses sustained by resident companies, the Court ruled that it infringed the freedom of establishment and could be justified by neither the objective of preventing the double use of losses or the objective of preserving a balanced allocation of the power to impose taxes between Member States, nor by a combination of two the grounds.

The next chapter in the cross-border loss relief saga is soon to be written as the Finish Supreme Administrative Court has requested guidance on the explanation of the meaning of the 'final loss' jurisprudence of Marks & Spencer  in A Oy which is still pending.

In this contribution, the authors review the consequences of Philips Electronics and the possible outcome of A Oy. This will involve the question whether the need to prevent the double use of losses, introduced in Marks & Spencer but in that case 'taken together' with the need to preserve the balanced allocation of taxing powers between Member States and the risk of tax avoidance, can now qualify as a stand-alone justification. Furthermore, we will look into the application and scope of the 'Marks & Spencer exception' for final losses.

This will be done by taking a critical look at the position of and tasks of the Court within the EU legal order. Furthermore, the authors will look into future of cross-border loss relief and assess what would be desirable from the perspective of the aim of the European Union (EU) to achieve an internal market and the interests of the Member States.
Dutch/German Cross-Border VAT Grouping
Authors: Sternberg Christian , van Kesteren Herman
Published: March 2022

Both Germany and the Netherlands were acquainted with the concept of VAT grouping before the introduction of a common EU VAT system in 1968. In this article the authors discuss the requirements for VAT grouping in Germany and the Netherlands. Even though the requirements are similar VAT grouping between companies established in Germany and the Netherlands is not possible, because of the territorial restriction laid down in Article 11 VAT Directive. The objections to a cross-border VAT group including German and Dutch entities as well as the current position of both countries on the subject are examined in this article. The different positions of Germany and the Netherlands on cross-border VAT grouping result in potential situations of double or non-taxation that we will discuss.
The European Cross-Border Conversion from a Dutch Tax and Legal Perspective
Authors: van Gelder Gabriël
Published: March 2022

In the Vale-case the European Court of Justice ruled that under European law a cross-border conversion - a transfer of the registered office plus a change in the applicable law of legal persons - is permitted. Such cross-border conversion is an item that has been on the agenda of the European Commission since a long time. At present, Dutch civil law does not offer the possibility to change the legal form of a Dutch legal person into a foreign legal form. However, based on the Vale judgment such conversion should be possible. In this article the Vale judgment is discussed in the broader context of conversion and transferring the legal seat of a company to another jurisdiction. The author discusses the Dutch civil law and tax aspects of such conversion in this article.
Should EU VAT Apply the Recharge Method in the Place of Supply Rules for B2B Services?
Authors: Merkx Madeleine
Published: March 2022

EU VAT applies a method for determining the place of supply of B2B services that directly identifies the jurisdiction of the customer's establishment that uses the service or intangible. The recharge of (part of) the costs relating to that service or intangible to another establishment of the same taxable person does not constitute a taxable supply. The OECD recently assessed another method, the recharge method, that regards a recharge of costs as a taxable supply. This method makes it possible to allocate a service in more than one jurisdiction. This article compares the method currently applied in the EU with the recharge method and discusses which method should be preferred.
Tax Aid to Public and Social Enterprises: A Collision between Competition and Public Policy
Authors: Stevens Stan A.
Published: March 2022

In a number of Member States including the Netherlands the European Commission has investigated and challenged the tax regime of public enterprises. In the view of the European Commission the regime qualifies as existing State aid. In this article the author discusses which room Member States have to grant tax benefits to public enterprises and non-profit organizations. In particular the distinction between economic and non-economic activities is discussed and the conditions of State aid. The author argues that it is clear from the Graphos case that the tax regime of public undertakings and non-profit organizations must be compared with the general corporate income tax regime and that tax benefits for public undertakings and non-profit organizations are in principle selective. Thus the question arises to which extent tax benefits can be compatible with the special rules that apply to the Services of General Economic Interest (SGEI). The author concludes that due to the strict conditions tax benefits that have the character of a general exemption of the corporate income tax will not qualify. However, tax benefits might be declared compatible under Article 107(3) TFEU.
Overview of New Paths and Patters in EU Tax Development with Focus on EU Soft Law and External Factors (Part 1)
Authors: Hinnekens Luc
Published: March 2022

EU Tax Law - as other legal systems - relies on formal law established or recognized by the competent governmental authority. But shouldn't there also be 'good law' in order to be obeyed? That goes as well for its provisions making up EU Hard Law as for its nonbinding legal acts of the Commission making up EU Soft Law.

In our recent book on EU Tax Law, we told - as most other tax commentators do - extensively the hard tax law story of EU Treaties, EU-legislation, non-written EU tax principles and ECJ fiscal case law. Accordingly, we used to touch only briefly on the other legal source of EU Soft Law - mainly Commission tax initiatives - arguing that they do not deserve the same attention and recognition for lack of a legally binding power, resulting in a low degree of tax efficiency and failure of harmonious connection with the EU-process of tax cooperation. Today we see a distinctive internal shift in the legal premises and status of EU Soft Tax Law. The shift is reflected in recognized stepped-up levels of effectiveness and wider scope of the steering functions of the Commission effectively of raising the legal process of European tax cooperation.
Compatibility of National Tax Measures with EU Law: The Role of the European Commission in Tax Litigation before the European Court of Justice
Authors: Lyal Richard
Published: March 2022

In tax as in other areas of law, issues regarding the compatibility with Union law of national legislation and administrative practice may give rise to litigation before the European Court of Justice. That litigation may take the form of infringement proceedings initiated by the European Commission or references for preliminary rulings submitted by national courts. The Commission is systematically a party to tax litigation before the Court, since it submits observations in all preliminary reference cases. This article describes the characteristics of the two procedures and looks at the types of question which arise, referring to issues of interpretation of the Treaty and of secondary law. It explains the approach taken by the Commission and gives examples in relation to both direct and indirect taxation: essentially, the aim of the Commission is to ensure the effective operation of the internal market.
Improving the Arbitration Procedure under the EU Arbitration Convention (2)
Authors: Pit H.M.
Published: March 2022

This article analyses the functioning of the arbitration procedure under the European Union (EU) Arbitration Convention and whether improvements to this procedure are possible. This article constitutes the second part of the article of which the first part was published in issue 2015-I of EC Tax Review. Part I thereby focused on the formal aspects of the arbitration procedure, namely the establishment of the advisory commission and the process of appointment of its members, as well as the secrecy obligation and costs of the procedure. Part II of this article will analyse in more detail the functioning of the advisory commission and the content of the opinion to be rendered. The article thereby takes into account previous improvements to the arbitration procedure, as implemented by the (revised) Code of Conduct on the effective implementation of the EU Arbitration Convention, as well as current discussions within the EU Joint Transfer Pricing Forum relating hereto.
The New EU VAT Rules on the Place of Supply of B2C E-Services: Practical Consequences - The German Example
Authors: Weidmann Matthias
Published: March 2022

This article provides a comprehensive summary of the new place of supply rules regarding electronic services ('e-services') supplied to non-taxable persons with a special focus on electronically supplied services. The new rules, which apply as from 1 January 2015, are interpreted especially on the basis of the Explanatory Notes on the European Union ('EU') Value Added Tax ('VAT') changes to the place of supply of telecommunications, broadcasting and electronic services that enter into force in 2015 (Council Implementing Regulation (EU) No. 1042/2013) published on 3 April 2014 by the European Commission ('EC'). The article aims to illustrate important impacts of the new rules on the VAT Law of the different EU Member States with particular regard to Germany. E-business as well as local tax authorities are faced with significant challenges in order to apply the new rules governing the place of supply of eservices correctly. The article deals especially with the definition of electronically supplied services, the determination of the location of the customer including presumption rules, the service commission framework and the mini One-Stop Shop ('MOSS') scheme. Some important weaknesses of the new rules are pointed out. Precisely, potential double taxation situations, technical, economical and legal difficulties in connection with the determination of the location of the customer and potential infringements of EU Law are discussed. The author analyses potentials for improvement not only on EU but also on German Level. Finally, useful information regarding the new introduced MOSS scheme is provided.
LOB Clauses and EU-Law Compatibility: A Debate Revived by BEPS?
Authors: Van Braband Pieter , Vandenberghe Jan , Scornos Dina
Published: March 2022

In the light of the much-discussed BEPS report, the OECD proposes to implement more effective anti-avoidance measures to be included in international instruments. Limitations on Benefits (LOB) rules are mentioned as one of the possible anti-treaty abuse rules. The compatibility of these clauses with the EU law can be questioned.

The purpose of this article is to provide for an in depth analysis regarding the compatibility of the OECD LOB clause with the Fundamental Freedoms. The authors will first briefly set out the context in which LOB clauses are generally inserted (Part 1). Thereafter, the existing CJEU case-law on LOB clauses will be discussed (Parts 2-4). Lastly, the tests contained in the OECD LOB clause will be assessed in the light of the prevention of tax avoidance as a possible justification ground (Part 5).

Assuming that the OECD LOB clause is considered to only target 'wholly artificial arrangements', the authors are of the opinion that a correctly applied discretionary relief clause can lead to the fact that the LOB clause is proportionate to attain the aim of combating tax avoidance and evasion. In this respect, it is important that no undue administrative constraints are imposed on the taxpayer.
Final Losses after the Decision in Commission v. UK (Marks & Spencer II)
Authors: Pinetz Erik , Spies Karoline
Published: March 2022

In infringement proceedings against the United Kingdom (Case C-172/13, Commission v. UK (‘Marks & Spencer II’)), the European Court of Justice had the chance to clarify its Marks & Spencer doctrine and the scope of ‘final losses’ when examining its technical implementation under the UK group relief system. However, the Court refrained from giving a clear answer and (again) left the reader with a number of open and new questions. This article gives a critical analysis on the judgment and evaluates its potential impact on the scope of the term ‘final losses’.
The Proposal for an EU Anti-avoidance Directive: Some Preliminary Thoughts
Authors: Navarro Aitor , Parada Leopoldo
Published: March 2022

On 28 January 2016, the European Commission made public a package of measures aimed to tackle tax avoidance and abusive practices in the European internal market. The package includes a detailed proposal for a new European Union (EU) Anti-avoidance Directive addressing six main issues: deductibility of interest; exit taxation; switch-over clause; General Anti-avoidance Rule (GAAR); Controlled Foreign Corporation (CFC) rules; and hybrid mismatches. This article provides a critical analysis of the Proposal for a Directive taking into consideration some of the implications of its implementation at stake. The final aim of this work is to contribute some elements that can improve the future debate on these matters.
How Does the CJEUs Case Law on Cross-Border Loss Relief Apply to Cross-Border Mergers and Divisions?
Authors: Vande Velde Ivo
Published: March 2022

The common system of taxation laid down in the Merger Directive does not require Member States to give cross-border loss relief further to a cross-border merger or division, and allows previously deducted permanent establishment losses to be recaptured upon a cross-border restructuring. This article analyses the CJEU’s case law in A Oy and Commission v. UK, and attempts to define under which circumstances cross-border loss relief can be claimed on the basis of primary EU law. In addition, the author examines which conclusions can be drawn from the recent CJEU judgments in Nordea Bank and Timac Agro for cross-border mergers and divisions, i.e., if the recapture rule of Article 10(1) paragraph 2 of the Merger Directive is compatible with Article 49 TFEU.
Interest Limitation under the Adopted Anti-Tax Avoidance Directive and Proportionality
Authors: van Os Pieter
Published: March 2022

This article scrutinizes the compatibility of the interest limitation rule the European Union (EU) legislature included in its anti-tax avoidance directive adopted on 12 July 2016 with the proportionality principle. Under its settled case law concerning domestic interest limitation rules restricting a fundamental freedom for purposes of combating tax avoidance practices, the European Court of Justice (ECJ) holds that such measures do not comply with the principle of proportionality if they, amongst others, either do not provide the taxpayer with an opportunity to substantiate the commercial reasons for not entering into an arm’s length loan arrangement, or restrict the deductibility of more interest than an arm’s length interest. As the rule does neither adhere to the counterevidence rule nor to the arm’s length principle, it is questionable whether its status as secondary EU law suffices for purposes of disregarding the aforementioned limitations set by the ECJ. Amongst others, the author takes the view that on the basis of ECJ case law, the interest limitation rule may be considered incompatible with the proportionality principle.
ATA Directive: Some Observations Regarding Formal Aspects
Authors: de Graaf Arnaud
Published: March 2022

In this article the authors analyse to what extent the objectives of the Council of the European Union (EU) and the EU Commission are effectively realized through the ATA Directive. Authors believe that the choice for a Directive is likely not the most effective, while for a substantial period potentially resulting in legal uncertainty regarding the scope of the Directive’s terminology and provisions. The relationship with existing international (tax) treaty obligations is complex as well as with existing income tax Directives. Moreover, the choice for a Directive puts the tax authorities – who have the primary initiative in applying its provisions – in a relative weaker position since under EU law they cannot unlike taxpayers directly apply the Directive’s provisions. Finally, it can be questioned where local tax authorities have the initiative, whether the EU Commission review and monitoring process will be sufficient to safeguard a consistent application of the Directive’s provisions within the EU, creating a level playing field. In view of this, authors conclude that a Regulation or alternatively a peer review mechanism may result in less legal uncertainty and a more effective mechanism to realize the Council of the EU and the EU Commission’s objectives.
Do State Aid Rules Still Allow European Union Member States to Claim Fiscal Sovereignty?
Authors: Luja Raymond H.C.
Published: March 2022

This contribution provides an overview of the European Union (EU)’s fiscal aid regime. State aid rules impacted national tax policy from the 1960s onwards, although awareness really grew at the end of the 1990s and then again in recent years (2014– 2016). The author places the European Commission’s May 2016 guidance notice on what state aid is meant to be in the context of taxation. He also touches upon the Commission’s June 2016 Staff Working Paper on tax rulings and provides a brief overview of state aid procedure. Next he reflects on how foreign tax rules might (not) affect the net amount of tax benefits that is to be retroactively recovered in case of a finding of unlawfully granted state aid. Special attention will be given to Member State fiscal sovereignty in relation to the adoption and use of anti-tax avoidance measures, such as transfer pricing adjustments.
BEPS Action 16: The Taxpayers Right to an Effective Legal Remedy Under European Law in Cross-Border Situations
Authors: Baker Philip , Baker Philip
Published: March 2022

This article starts from the reasonable assumption that the implementation of the base erosion and profit shifting (BEPS) project increases legal uncertainty in tax matters. The shift from the isolated and bilateral exercise of taxing jurisdiction to international tax coordination in the framework of the BEPS project is not accompanied by a corresponding global convergence in the exercise of legal remedies, which remain confined to their national boundaries.

In line with their previous research, the authors address hereby the right of taxpayers to an effective legal remedy under European tax law, taking into account the dialogue among Courts in respect of legal values contained in national Constitutions of European Union (EU) Member States, the EU Charter of Fundamental Rights and the European Convention on Human Rights.

The focus is on the right to an effective legal remedy in cross-border tax procedures, with special emphasis on mutual agreement procedures and mutual assistance. The authors suggest a two-tier mechanism with the involvement of taxpayers and tax authorities, which allows for an effective exercise of the right of defence and does not require major changes in the wording of treaty clauses modelled after Articles 25 and 26 OECD MC. Hopefully, something that other international institutions, including the United Nations, may consider for the future. The authors suggest filling this gap with their proposal for a BEPS Action 16.
The Recovery of the Illegal Fiscal State Aids: Tax Less to Tax More
Authors: Motte Alexandre Maitrot de la
Published: March 2022

The Apple case has recently shown the tax community and the public opinion that Member States may be forced to recover illegal fiscal State aids. Subject to various and sometimes complicated legal regimes, these illegal fiscal State aids designate the tax advantages that have been granted to taxpayers without being notified to the Commission, the tax advantages that have been notified to the Commission but implemented before its authorization, and the tax advantages that have been maintained after a review that conducted the Commission to decide that they are no longer compatible with the internal market. As the goal pursued is to restore the ex-ante equilibrium and to act as if the aid violating Article 108 TFEU had never been granted, the calculation of the amount of the tax that has to be levied is sometimes complicated. And the recovery procedure can, at the very least, lead to enriching the State. Because European law recognizes few rights for the taxpayers, the financial consequences of the State’s infringement of Article 108 TFEU weigh heavily on companies that were supposed to be supported. It would be otherwise only if the Court of Justice granted them the possibility of incurring State responsibility.
Taking EU Fundamental Freedoms Seriously: Does the Anti-Tax Avoidance Directive Take Precedence over the Single Market?
Authors: Bizioli Gianluigi
Published: March 2022

This article provides a critical analysis of the Anti-Tax Avoidance Directive with the Single Market and, in particular, with the fundamental freedoms. After a brief description of the European Court of Justice case law on corporate income taxation, the contribution tackles the general compliance of the Directive with the legal basis of the Single Market, and especially the impact of the Directive on the European Union tax policy and the internal coherence of the Directive. The second part deals with the compatibility of the single provisions of the Directive with the fundamental freedoms, highlighting the main issues and the main deviations from the European Court of Justice (ECJ) case law.
Is Tax Avoidance the Theory of Everything in Tax Law? A Terminological Analysis of EU Legislation and Case Law
Authors: Öner Cihat
Published: March 2022

The primary goal of this article is to analyse the use of the term ‘tax avoidance’ in the legislative framework and case law of the European Union to point out the absence of a common linguistic approach. The consequences derived from the terminological chaos will also be discussed; thus, the study will try to display how big and deep the problem is by giving special attention to the semantic aspects that cannot, in fact, be ignored anymore. Furthermore, the principles stemming from the case law will be reviewed, since they are regarded as the outcome of the interpretation of tax avoidance by the judiciary.
Adoption of the E-Commerce VAT Package: The Road Ahead Is Still a Rocky One
Authors: Lamensch Marie
Published: March 2022

The e-commerce VAT package that was adopted in December 2017 is a key element of the European Commission VAT Action Plan and the Digital Single Market strategy. While it should be transposed into the national legislations of the Member States by 2019 and 2021, in this article the author identifies key implementation issues and unfixed enforcement challenges. She highlights, in particular, that relying on electronic platforms to collect the VAT does not come without difficulties and risks of abuse and that the lack of enforcement jurisdiction of EU tax administrations on non-EU businesses remains an unsolved and most worrying issue. Her conclusion is that the adoption of the e-commerce VAT package is certainly not the last step of the EU VAT modernization journey.
Fiscal State Aid to Promote Clean Transport
Authors: Zannoni Diego
Published: March 2022

The diffusion of non-conventionally fuelled vehicles compared to conventional ones experienced significant constraints due to their higher cost and the lack of adequate public charging facilities. The EU, to overcome such constraints, adopted measures that encourage a shift towards more sustainable forms of mobility. In this domain EU Member States are adopting fiscal and direct incentives. The lack of coordination has nonetheless generated discrepancies among States in terms of vehicles sales. The article will focus on the relationship between fiscal and direct incentives and State aid. An assessment will verify under what conditions fiscal and direct incentives, aiming to promote clean transport, may be exempted from the general prohibition of State aid. To obtain a full picture, the impact of the freedoms of movement on tax legislation will be considered in tandem to EU provisions on discriminatory levies. The study concludes highlighting how electric vehicles cannot be axiomatically assumed to have zero CO2 emissions.
Allocation of the Burden of Proof Under the Anti-Abuse Rule of the Parent-Subsidiary Directive According to the Most Recent ECJ Case Law
Authors: Sanò Claudia
Published: March 2022

The author examines the judgment rendered by the Court in the Deister Holding and Juhler Holding cases and its implications, with special regard to the allocation of the burden of proof between the tax authorities and the taxpayer. The author aims to investigate whether and to what extent Member States - in light of the most recent ECJ case law - are entitled to enact domestic anti-abuse rules which presume that abuse occurred under the Parent-Subsidiary Directive, as well as under the other directives on the harmonization of company taxation.
The Reflection of Data-Driven Value Creation in the 2018 OECD and EU Proposals
Authors: Sinnig Julia
Published: March 2022

Is the current corporate tax system fit for the digitalized economy? The 2018 interim report of the OECD and the proposals of the European Commission on the introduction of significant digital presence and a digital services tax give new insights into policymakers’ perception of ‘value creation’ and income generation in digitalized business models.

Although the right way to tax digitalized business models seems disputed with regard to the diverging outcomes of the OECD’s and European Commission’s work so far, it seems to be of common understanding that user data are susceptible of establishing a taxable nexus. In a first step, this article aims at analysing how the collection and processing of user data may create such genuine link between an income generating activity and a state territory enabling this state to exercise its taxing right. In that respect, the concept of value creation, a driving concept in the discussion on how to tax digitalized businesses, is critically reviewed and an attempt to understand its real meaning is presented. In a second step, the article analyses to which extent the long- and short-term proposals of the European Commission reflect such data-driven (taxable) value creation, critically highlighting their main characteristics and flaws.
Conference: New Perspectives on Fiscal State Aid: Legitimacy and Effectiveness of Fiscal State Aid Control
Authors: Verhagen T. H. J.
Published: March 2022

This report summarizes the key observations and findings derived during the conference organized by Tilburg University, in collaboration with the University of Antwerp, the University of Bologna and the Vienna University of Economics and Business. The conference, which was held on 23 February 2018, closed a project co-funded by the European Commission and aimed at enhancing the application of fiscal State aid law by national judges.