bluuebunny/crossref_metadata_2025 huggingface dataset:
Contributing a Developing Country’s Perspective to International Taxation: United Nations Tender for Development of a Transfer Pricing Manual
Authors: Falcao Tatiana
Published: February 2022

The following article discusses the United Nations’ (UN) recent initiatives (i) in revising the UN Model Tax Treaty between developed and developing countries and (ii) creating subcommittees and working groups for the discussion of contemporaneous tax topics, while adopting a developing country perspective. This article focuses on the work done by one subcommittee in particular: the transfer pricing subcommittee, and discusses what developing countries claimed to be their greatest difficulties in issuing, applying, and reinforcing transfer pricing regulations. This article also deals with prospective goals, and the role that the UN wants to have in international tax policy discussions for the future.
Cost Sharing and the Acrobatics of Arm’s Length Taxation
Authors: Brauner Yariv
Published: February 2022

The cost sharing regime of the United States enables multinational enterprises (MNEs) to export US intangible property to low or no tax jurisdictions, essentially tax-free. This is in stark contrast to long-standing US policy and the explicit tax agenda of the Obama administration. Two recent cases have circumvented attempts by the Internal Revenue Service (IRS) to mitigate cost-sharing-based tax avoidance. This article explains the regime and how the insistence of the IRS on arm’s length-based transfer pricing rules contributed to the current non-taxation of foreign income of US MNEs and explores alternative reforms.
Taxation and Property Rights under the European Convention on Human Rights
Authors: Ergec Rusen
Published: February 2022

Article 1 of Protocol 1 to the European Convention on Human Rights (ECHR) guarantees to every natural or legal person the right to peaceful enjoyment of his possessions. Taxation and enforcement measures relating thereto are considered by the European Court of Human Rights as an interference with the right to property as set out in the preceding provision. The Court has, accordingly, developed a case law reviewing the compatibility of such measures with, among others, the requirements of legality and proportionality. Although the Court grants a wide margin of appreciation to states as to taxation rate, procedural enforcement rules might come under close scrutiny. Other safeguards laid down in the Convention, such as the prohibition of discrimination, might foster the rule of law in issues of taxation. The study purports to underline the often underestimated potentialities of the protection afforded by the European Convention to taxpayers.
The Tenability of the Dutch Preservative Tax Assessment in Relation to Pension Benefits
Authors: Goossens Karin , Bobeldijk Arco C.P.
Published: February 2022

The authors argue that the rulings of the Dutch Supreme Court, in which its substantive opinion on the tenability of the preservative tax assessment in relation to pension benefits is expressed, do not leave any scope for the remedial legislation implemented as a response thereto. The authors explain that the legislator has acted in violation of the principle of good faith that needs to be taken into account when interpreting and applying double tax treaties. According to the authors, the way to prevent that the entitlements accrued tax-efficiently are appropriated for other purposes than the intended purposes is by changing the bilateral tax treaties. This article includes an overview of the consequences of the rulings and the amendments to the law in various situations.
Seminar on VAT on Financial Services at the University of Lisbon
Authors: Mota Ana Rita , Abecasis Tomás , Molek Pavel
Published: February 2022

The Seminar on value added tax (VAT) on Financial Services was the fifth part of the postgraduate course in advanced tax law Key Topics in European VAT, that was organized on 26 June 2010 at the Law Faculty of University of Lisbon by Instituto de Direito Económico Financeiro Fiscal (IDEFF). This seminar had a real ‘star cast’: Professor Dr Ben J. M. Terra and Dr Oskar Henkow from School of Economics and Management of the Lund University, Professor Dr Joachim Englisch from University of Münster and Dr Rita de la Feria from the Centre for Business Taxation, Oxford University. Even the eruption of the Icelandic volcano Eyjafjallajökull was merely able to cause for postponement, rather than cancelling of this meeting between four of the best experts on VAT in Europe. In this meeting they shared their knowledge with the participants of the Seminar and the course Key Topics in European VAT – readers of INTERTAX can now access it too via this report.
The Luxembourg IP Tax Regime
Authors: van Kuijk Frank
Published: February 2022

As from 2008, Luxembourg provides for a beneficial tax regime for income and capital gains attributable to a wide variety of intellectual property (IP). Over the last three years, an increasing number of corporate entities transferred their IP to Luxembourg companies in order to benefit from the IP regime.
Abusive Transactions on Financial Hybrids
Authors: Rosembuj Tulio
Published: February 2022

Financial hybrids are the main purpose of structured financial operations by means of special purpose vehicles (SPVs), off the balance sheet. There is an essential element without which the systemic financial crisis may never be understood, that is, the exclusive tax purpose that was purportedly aimed by the financial, banking, and insurance companies. Abusive transactions on financial hybrids (futures, swaps, repos) were designed, as proven by the US and New Zealand jurisprudence, to simultaneously obtain financial and tax advantages. Financial hybrids may result from a commercial and corporate purpose but such is not the case for synthetic hybrids over the counter, which, blessed by credit rating agencies, used arbitrage as an ordinary pattern, aiming to take advantage of the lack of coordination between legal systems and the opacity and secrecy of the transactions themselves.
Suggested Treaty Benefits Approaches for Collective Investment Vehicles (CIVs) and Its Investors under the OECD MTC 2010 update
Authors: Vermeulen Hein
Published: February 2022

Collective investment vehicles (CIVs) are specifically addressed in the 2010 update of the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention (MTC) and the commentary thereto. Attention is paid to the tax treaty position of CIVs in an international context. The main question is whether a CIV is treaty-eligible and, if not, whether the investors in the CIV are allowed to claim some kind of treaty protection in lieu of the CIV. In this paper, the author addresses the specific approaches laid down in the 2010 commentary to the OECD MTC to cope with the problems that arise if the normal rules are applied to CIVs.
From Marks & Spencer to X Holding: The Future of Cross-Border Group Taxation in the European Union
Authors: Silva Bruno da
Published: February 2022

On 28 April 2010, the Amsterdam Centre for Tax Law (ACTL) of the University of Amsterdam organized the seminar 'From Marks & Spencer to X Holding: The Future of Cross-Border Group Taxation'. The purpose was to debate the Court of Justice (CJ)'s decision in the X Holding case and its possible impact on the Dutch fiscal unity and in the United Kingdom (considering both the Marks & Spencer and Phillips Electronics cases) and to analyse future trends on cross-border group taxation (with special attention to the Danish cross-border group taxation, group taxation in the Value-Added Tax (VAT), and group taxation in the Common Consolidated Corporate Tax Base (CCCTB)). The seminar was divided into four panels and gathered experts from the Netherlands and across Europe to discuss the above-mentioned topics.
Change of Individuals Residence within EU: The Tax Residence Issue as a Possible Obstacle from an Italian Perspective
Authors: Scarioni Paolo
Published: February 2022

Due to the ever-rising level of European integration, in the last few years, a growing number of individuals move from one European Union (EU) Member State to another. This article is aimed to analyse the dual residence issue that could seriously obstacle the above movement. In particular, the article moves from the notion of tax residence provided by the Italian tax legislation and then wonders on the actual role or capability of the international tie-breaker rules as well of the Community law to solve double residence problems. Finally, the article points out that even though Italian jurisprudence has acknowledged the relevance of the notion of residence that can be found in some provisions of the Community law, the determination of the place of tax residence is an issue that remains under the exclusive competence of the national judges.
Changes in the Application of Tax Treaties in Sweden
Authors: Hilling Maria
Published: February 2022

In 2008, the Swedish Supreme Administrative Court gave precedence to controlled foreign corporation (CFC) legislation over a tax treaty without consulting the tax treaty. Since then, the relationship between domestic law and tax treaties has been a highly debated issue in Sweden. The Court's reasoning was based on an identified conflict between domestic law and a tax treaty, which was solved through reference to general principles on derogation. In a recent judgment in a similar situation, the same Court deviated in principle from the 2008 judgment by giving priority to the tax treaty over domestic law, thereby creating a welcome return to established principles of tax treaty application. Because the Court introduced a rule of exception from the rule that Swedish tax treaties prevail over domestic law, however, this recent decision introduces changes for the application of tax treaties in Sweden. In such situations, the main rule of tax treaty precedence over domestic law is set aside, and the principles of derogation will be applied.

This article is divided into four sections, in which I examine and analyse the recent case and its implications for tax treaty application in Sweden. As the 2008 decision is of central importance, I briefly present this case in section 1. In section 2, I turn to the 2010 decision. Conclusions on the effects of the Court's adjudication on tax treaty application in Sweden are presented in section 3, in which I analyse the situations to which the rule of exception is applicable. A significant legal issue following the aftermath of the 2010 decision is presented in section 4.
Dividend Withholding Tax Planning Techniques: Part 2
Authors: Merks Paulus
Published: February 2022

Although there is a confounding variety of cross-border dividend withholding tax planning techniques available to the modern corporate taxpayer, this study has sought to identify, analyse and categorize these techniques in abstracto and, unless stated otherwise, without linking these techniques to particular countries.

Whereas Part 1 of this two-part study focused on the so-called formal dividend withholding tax planning techniques, the underlying Part 2 identifies, analyses and categorizes the so-called substantive dividend withholding tax planning techniques. In addition, this Part 2 provides a framework whereby the various dividend withholding tax planning techniques can be categorized in a consistent and universal manner.
Pioneering Decision of the Constitutional Court of Hungary to Invoke the Protection of Human Dignity in Tax Matters
Authors: Deák Dániel
Published: February 2022

The jurisdiction of the Hungarian Constitutional Court has been changed recently. Currently, the provisions of budget and tax laws cannot be reviewed by this Court unless the application filed with the Court exclusively has referred to the infringement of the right to life or human dignity. The Court did not have to wait for a long time to exploit an opportunity and carry out a test of tax law provisions, now strictly in the light of the protection of human dignity. This is unusual because tax cases have not been dealt with before by referring to the protection of human dignity. The present article seeks to explore a link between the protection of human dignity and taxation through the analysis of a specific decision of the Court.
Trade and Transfer Pricing
Authors: Pogorelova Lioubov
Published: February 2022

Although there may be difficulties, especially during challenging economic times, in applying profit-based regulations when an income tax dimension is considered, if a trade dimension is introduced, in some circumstances profit-based methods, such as the comparable profits method (CPM) or transactional net marginal method (TNMM), may be preferred transfer pricing methods for multinationals. The article provides a comprehensive overview of the profit-based methods CPM and TNMM, where advantages and disadvantages of these methods are considered, and differences between these two methods are pointed out. The article also introduces a conceptual framework for transfer price coordination in the context of income tax and customs laws and examines issues pertaining to harmonization of income tax and customs laws.
Smart Tax Competition and the Geographical Boundaries of Taxing Jurisdictions: Countering Selective Advantages Amidst Disparities
Authors: Pistone Pasquale
Published: February 2022

Smart tax competition is a new form of undesirable tax competition within the internal market, often arising across the national borders within the internal market. This article focuses on the three main forms of smart tax competition, i.e. (i) giving selective advantages to foreign undertakings based on a smart exploitation of cross-border tax disparities, (ii) protecting domestic undertakings through compensatory relief for international double taxation and (iii) acting at the level of application of anti-abuse measures. The analysis is carried out from the perspective of the EU internal market and combines a review of compatibility (with primary EU law and, in particular, State aids) issues with a potential solution through a coordinated international tax policy at EU level and a development in the interpretation and application of State aids rules.
Fiscal Aid Review and Cross-Border Tax Distortions
Authors: Rossi-Maccanico Pierpaolo
Published: February 2022

International taxation was never the focus of the state aid prohibition foreseen by Article 107(1) TFEU. Indeed, the European judicature has made it clear that the application of state aid rules to measures relating to business taxation was essentially aimed at intra-state rather inter-state tax preferences. However, this does not preclude certain cross-border distortions of competition deriving from direct business tax measures to fall under the scrutiny of state aid rules.

Under its effect-based doctrine, the European judicature has consistently held that the notion of state aid includes tax preferences having the effect of indirectly favouring certain undertakings by favouring certain productions or arrangements, except where the preference is justified from the nature and general scheme of the system. Moreover, the Commission practice first and the Court of Justice later have confirmed that the notion of selective aid includes certain tax preferences being selective irrespective of whether these are internationally harmful or not. Starting with his 1998 Notice on the application of state aid rules to direct tax measures, the Commission has been active in policing the tax regimes relating to the 1997 Code of Conduct on business taxation to tackle international tax competition.

Against this background, the article provides a reasoned review of the application of state aid rules to international tax preferences and of the selectivity criterion. There is no reason not to carry out the analysis under the same criteria than the ones developed by the Court in reviewing tax discriminations or restrictions hindering the exercise of fundamental freedoms in the internal market, save where competition between undertakings is not affected. This parallel shall not, however, bring prejudice to the different nature and scope of state aid review. In examining the compatibility of fiscal aids with the internal market, the Commission enjoys a broader discretion, provided that it never produce results that limit or restrict the application of specific provisions of the TFEU such as the fundamental freedoms.
State Aid and Taxation in Relation with Third Countries
Authors: Jessen Pernille Wegener
Published: February 2022

The EU and WTO legal regimes on state aid and subsides may contribute to the EU and OECD objective of tackling harmful tax competition. In EU Member States relations with third countries, harmful tax competition may arise both in relation to tax derogations by EU Member States applied to activities linked with third countries, and in relation to tax derogations by non-EU countries potentially affecting the Policy Decisions of the EU Member States or Decisions about the location of multinational businesses. In order to illustrate some of these problems, this article addresses two recent Decisions by the EU Commission and the EFTA Surveillance Authority regarding derogations from general rules on tax amortization and corporate taxation potentially involving fiscal aid and/or harmful tax competition.
Conference Report: Research Seminar on State Aid and Tax Measures (Aarhus, Denmark, 27 January 2011)
Authors: Papis-Almansa Marta , Kvasnina Alla , Senyk Maria , Tzubery Yinon
Published: February 2022

On 27January 2011, Danish city of Aarhus turned into a hot spot for the leading state aid, tax, and competition law practitioners, academics, as well as graduate and undergraduate students, all brought together under the roof of Aarhus University for the Research Seminar on State Aid and Tax Measures. The ambition of the Seminar was to explore the current legal situation of taxation in the EU state aid law, as well as to address the main uncertainties, and discuss possible solutions.
IAS/IFRS: A Starting Point for the CCCTB?
Authors: Jaatinen Iida
Published: February 2022

The European Commission has proposed a Common Consolidated Corporate Tax Base (CCCTB) to be applied in the European Union (EU) in order to harmonize and provide a single set of rules to calculate the corporate tax base. In the CCCTB framework, only a single set of tax rules is applied, and the harmonization would only concern the calculation of tax base. International Accounting Standards and International Financial Reporting Standards (IAS/IFRS) are developed by the International Accounting Standards Board (IASB) in order to create high-quality, harmonized, and globally accepted accounting standards. Since 2005, in the EU publicly traded companies have had to prepare their consolidated financial statements in accordance with IAS/IFRS as enforced in the EU. Originally, IFRS were considered a possible starting point for creating the CCCTB, but they were not used in defining the common tax base and no formal linkage between IFRS and the CCCTB was created. The aim of this article is to discuss the reasons why IAS/IFRS were only applied as a starting point of the CCCTB, not as a financial accounting system for the CCCTB. In addition, some similarities between the systems are reviewed, and it is considered how IAS/IFRS could serve as a source of information for the CCCTB application.
Utilizing Tax Incentives for Infrastructure Ventures in Latin America: A Case Study for Argentina, Brazil, Colombia, and Mexico
Authors: Falcao Tatiana , Eguiarte Mariana , Locurscio Bastiana , Moreno Lucas
Published: February 2022

This article is the result of a panel discussion between representatives from Argentina, Brazil, Colombia, and Mexico, at the New York State Bar Association (NYSBA)'s International Section 2011 Seasonal Meeting. The panel was given a case study and asked to analyse the general tax issues arising from a highway infrastructure project entered into by a fictitious US company ('Highways, Inc.') in one of the involved Latin American jurisdictions (Argentina, Brazil, Colombia, or Mexico). Under the hypothesis, Highways, Inc. was to choose the appropriate investment vehicle (special purpose vehicle (SPV)), corporate structure, and capital structure. The SPV's tax obligations and tax incentives in the investment country were also analysed by the panel. The objective was to come up with potential barriers and incentives to invest in the four envisaged investment jurisdictions.
Tax Legislation within the Scope of EU-State Aid Law: An Overview of Critical Issues Arising from the German Reorganization Clause
Authors: de Weerth Jan
Published: February 2022

Pasquale Pistone stressed very recently in this journal `the growing importance of the prohibition of state aids in tax matters´ (Intertax 2012, p. 84). This is a fair point. The following article illustrates and expands upon this by focusing on critical issues arising from the German 'reorganization clause' by way of example. For a business, it is important to understand when it might be in a position to bring an action before the General Court. Furthermore, the question arises what makes a tax clause, such as the German reorganization clause, selective in nature. At a glance, a tax rule seems to have a general character which is not likely to constitute a form of aid. Moreover, given that as things stand there remains considerable uncertainty surrounding the question when a tax measure constitutes unlawful State Aid, where a Commission decision breaks new ground. In that respect, the question arises whether a decision of the Commission which finds a tax rule to be State Aid may have retroactive effect or whether this retroactive effect would violate the protection of the legitimate expectations of the taxpayers.
OECD Discussion around the Definition of Permanent Establishments: A German view on Proposed Amendments to the Model Commentary and Their Effect on Business Profit Allocation and International Assignm
Authors: Hilbert Lukas , Engel Benjamin
Published: February 2022

Within the system of double taxation treaties the concept of permanent establishments constitutes the predominant link to tie revenue to a source State. It is not only of importance for allocation of business profits and the taxation rights accrued thereupon, but can also determine which Contracting State is allowed to levy taxes on employee remuneration in case of certain short-term assignments. In addition it decides about certain corporate tax consequences secondment activities may have. Understanding and interpretation of the concept are under current discussion on OECD level. This article sums up the debate's main aspects, presents its consequences and explains why Germany has a reserved position towards some of the henceforth proposed changes.
Influence of International Mutual Assistance on EU Tax Law
Authors: Spies Karoline
Published: February 2022

ECJ case law shows that the free movement of capital requires Member States to treat only those external capital movements equal to EU-internal capital movements which involve cooperative third countries. Based on this ECJ case law, Member States are trying to protect their tax revenues by making tax benefits in third-country situations conditional upon the entering into an agreement on mutual assistance by third countries. This article deals with the question whether and to which extent Member States are permitted to ask for agreements on exchange of information as well as on tax collection under EU law, and how these bilateral agreements need to be designed to qualify for equal treatment. In this respect, the potential impact of the new EU Mutual Assistance Directives, strengthening the efficiency of cooperation within the EU, is also taken into account.
Tickets to Ride: The Race for Preferable CIT Regimes Towards ASEAN Economic Community
Authors: Dwi Nugroho Adrianto
Published: February 2022

Years are approaching as Association of South East Asian Nations (ASEAN) is expecting to have its own economic community in 2015. The commitment to realize, among others, a single market and equitable economic development have been set out. Yet, Member States are continuing their 'revenue giveaways' by enacting tax statutes and regulations that constitute preferable tax regimes and 'tickets to ride' for companies. Indonesia, for example, has recently enacted a regulation that provides tax breaks in a certain period for newly incorporated resident companies investing in several industries, while Singapore has for several years provided their resident start-up companies with tax exemptions. Where taxes, particularly corporate taxes, are becoming more primary in generating State revenue, preferable tax regimes as such would clearly create burdens in a State's budget. On the other hand, it goes without saying that these regimes would be incompatible with the efforts to create a single market, as investors would place their capitals in Member States having the lowest effective corporate tax rate, assuming all other investment determinants are equitable in one Member State and another. Nevertheless, financial cooperation towards AEC seems to consider corporate taxes as a non-determinant in establishing a highly competitive economic region. The question is, therefore, does the pillars of ASEAN Economic Community (AEC) envisage a tax competition, that is somewhat harmful, among Member States? Also, contextual to the theme of the conference, would this kind of competition be the identity of AEC? This article would attempt at answering these questions by first pinpointing preferable provisions within the currently enforced corporate tax regimes in some Member States. It would then determine whether the establishment of AEC entails consequences or provides opportunities for harmonization of corporate taxes among Member States. Subsequently, the author would conclude whether tax competition among Member States is a purposive action, which respectively labels an identity for the AEC.
Corporate Tax Harmonization: Key Issues for Ensuring an Efficient Implementation of the CCCTB
Authors: Fernández María Jesús García-Torres
Published: February 2022

Most studies on the Common Consolidated Corporate Tax Base (hereinafter CCCTB) focus on whether the most appropriate quantification of the tax base has been chosen and on the prediction of inherent tax or economic effects. However, other problems concerning the implementation of a harmonized corporate income tax should be taken into account. Firstly, genuine fiscal neutrality ought to be established. Implementing a corporate income tax able to reach the objectives of tax revenue is crucial, even more given the different needs of the various Member States (hereinafter MS) by using a fair and objective system besides the relationship between taxpayers and the administration should be regulated. At the same time, articulating the relationships between different administrations to the existence of a uniform interpretation is a must. Finally, designing a conflict management system to apply equally to all citizens is essential.
2012 Individual Income Tax Reform in Norway
Authors: Zielke Rainer
Published: February 2022

On 30 April 2013, the individual income tax declaration for 2012 is due in Norway. The present article is the only English language publication worldwide that enables the reader to calculate the income tax and property tax of individuals for 2012 on the basis of the individual income tax reform 2012 in Norway, including rules impinging on cross-border relations. This is of particular importance today, as Norway - due to its rich natural resources - has become an important country both economically and in terms of immigration. Today the country has international connections based on economic relations and immigration.
The OECD Discussion Draft on the Transfer of Intangibles (Revision of Chapter VI of the OECD Transfer Pricing Guidelines)  Main Comments
Authors: Lemein Gregg D. , Bennett Mary C. , Silberztein Caroline
Published: February 2022

On 6 June 2012, the Organisation for Economic Co-operation and Development (OECD) released a discussion draft on the Proposed Revision of Chapter VI of the OECD Transfer Pricing Guidelines (TPG) and Related Provisions. Intertax publishes the full text of the discussion draft together with the comments submitted by members of Baker & McKenzie Global Transfer Pricing Practice and Global Tax Policy Group. While applauding the document for clarifying a number of important issues related to the application of the arm's length principle to situations involving intangibles, the commentators also believe that the Discussion Draft on several occasions presents departures from the arm's length principle and from the existing guidance in the 2010 TPG. They suggest that the concerns expressed by some countries in relation to specific structures should be addressed within the appropriate legal and policy parameters and that the TPG should remain an interpretative tool of the arm's length principle as set forth in Article 9 of the OECD Model Tax Convention. In addition, they suggest that the guidance in the revised Chapter VI should be balanced and acknowledge that the facts and circumstances of each case ought to be taken into account in a transfer pricing analysis. Prescriptive requirements should not be set as substitutes for comparability analysis.
Like-kind Exchanges Pursuant to Section 1031 Internal Revenue Code and their Consequences under German CFC-rules
Authors: Kraft Gerhard , Zielinski Sigrid
Published: February 2022

On the basis of sound economic reasoning, numerous tax systems have provisions that allow for tax-free exchanges of like-kind property. When the property is sold after the exchange the gain will usually be taxed so that it is in fact not a tax-free exchange but rather a deferral of taxation until the sale of the property.

After a brief overview of the basic like-kind exchange rules under the US Internal Revenue Code (IRC) and the basic concepts of the German Controlled Foreign Corporations (CFC-) rules, this article discusses the possible consequences of a like-kind exchange of US property by a US corporation, owned and controlled by shareholders resident in Germany under German CFC-rules. As a few examples will demonstrate, a like-kind exchange under US law could - if certain conditions are met - lead to the application of German CFC-rules thereby reversing the non-recognition event. In these instances, German CFC legislation overreaches the basic purpose of CFC-rules - to prevent or reduce abuse and designs for tax evasions.
Financial Restructuring in the Netherlands: Tax Aspects upon the Termination of a Fiscal Unity
Authors: Beudeker Michiel , Bobeldijk Arco C.P.
Published: February 2022

Financial restructuring (which is not uncommon in these times of economic crisis), may result in the termination of a Dutch fiscal unity. The Dutch tax aspects in relation to such termination will be outlined in this article.
The External Tax Treaty Making Powers of the Member States: Defining Limits and Obligations under the Current European Legal Order
Authors: Zaidan Adriana Capobianco May
Published: February 2022

The article analyses the external treaty making powers of the EU and its Member States in the direct tax area and its main purpose is to describe the limits and obligations imposed on the external action of Member States by EU law in such field. Starting from a comprehensive analysis of the external competences of the EU, the article discusses the existence and nature of EU competence in direct taxation matters, giving special attention to the application of the implied powers doctrine. The article, then, focuses on the importance of the general duty of loyalty as a restraint on the external actions of Member States in the direct tax arena and presents suggestions on how to reach a balance between the rights and obligations of Member States in tax treaty negotiations with third countries.
State Aids and Energy Taxes: Towards a Coherent Reference Framework
Authors: Ezcurra Marta Villar
Published: February 2022

The high level of complexity on energy sector needs some definitions, categorization and systematization. This may help to clarify the actual scenario towards an ideal energy tax or at least towards a coherent reference framework. This article explores what measures should be considered as 'energy taxes' in a State aid context by distinguishing the scope of the harmonized energy taxes from the non-harmonized ones. To reach this aim new trends on ECJ case-law and current reform process are analysed as a basic background.
Tracing the Origins of the Netherlands Tax Treaty Network
Authors: Evers Maikel
Published: February 2022

This contribution identifies the main determinants and key persons that constituted the tax treaty policy of the Netherlands. This policy is rooted in the political chess games in nineteenth century mainland Europe. In this century, European states gained experience in negotiating trade and tax agreements. Not only were the Germans experts in divide and rule strategies; they also developed instruments that form the core of contemporary tax treaty law. Dutch tax treaty policy blossomed when the Netherlands opened tax treaty negotiations with Germany. Negotiations that followed an erratic course, making their mark on the notorious tax treaty policy of the Dutch. The Dutch legislator refined the tax system to support a fruitful tax treaty policy, focusing on becoming an intermediary state for international investment. However, the firm position of the Dutch on bank secrecy had thrown a spanner in the works. Finally, the erratic course of these early tax treaty negotiations inspired the League of Nations tax committees through some of their key members.
Do You Want a Receipt? Combating VAT and RST Evasion with Lottery Tickets
Authors: Hemels Sigrid J.C. , Fabbri Marco
Published: February 2022

Governments both in developed and developing countries are facing the problem of value added tax (VAT) and retail sales tax (RST) evasion. This explains a growing interest in policies alternative to the traditional methods of deterrence. This paper describes the achievements resulting from a zero cost policy against VAT and RST evasion based on rewards. Customers are encouraged to request an invoice by changing the invoice into a lottery ticket, thereby making VAT and RST fraud and evasion more difficult for suppliers. Such a policy has, for example, been introduced in some Asian countries. After having characterized VAT and RST evasion as a special kind of public good situation, a theoretical explanation based on behavioral Economics models of the success empirically registered by this policy will be discussed. Given this theoretical framework, we then introduce an empirical test in order to verify the ex-ante applicability of the policy described in different socio-economic contexts. Finally, we discuss the possible countervailing effects as well as the positive long-term side-effects of the introduction of the policy.
Corporate Financing, Interest Deduction and Tax Controversies
Authors: Martins António
Published: February 2022

This article focuses on a general tax principle: the usual corporate income tenet that, for being deductible, costs have to be necessary or indispensable to generate revenue or to maintain the corporation as a going concern. After exposing its possible meaning, we analyze its impact on court decisions and legal controversies regarding some intra-group financing operations. These controversies have, in our view, been a major reason for the recent introduction of quantitative limitations to interest deduction in the Portuguese corporate income tax code.

The Portuguese tax law already had several ways of restricting interest expenses without recurring to the new clause of quantitative automatic limitation. In the light of such a set of legal avenues for restricting interest deduction, the new clause inserted in the tax code is a move in the direction of abandoning principles in favour of rules.
The Diplomatic and Government Service Provisions of the OECD MTC: A Case for Their Continued Efficacy
Authors: Hall Cameron
Published: February 2022

This article asks the question what relevance do Article 19 (Government Service) and Article 28 (Members of diplomatic missions and consular posts) have in today's bilateral tax treaty system. Borne out of international courtesy, and codified in the Vienna Conventions, the fiscal immunity of governments in their foreign affairs is a well-established principle in international taxation. Articles 19 and 28 of the OECD Model Tax Convention on Income and Capital are a representation of this principle in the framework of the double taxation convention (DTC). The article focuses on the extension of these provisions in this context, and assesses the substantive value, history and recent practical trends in support thereof.
Arbitration under the OECD Model Convention: Follow-up under Double Tax Conventions: An Evaluation
Authors: Pit H.M.
Published: February 2022

On 18 July 2008, the OECD Council adopted amendments to the OECD Model Convention, by which inter alia the mutual agreement procedure of Article 25 was supplemented with an arbitration clause. This clause provides for a mandatory arbitration procedure if contracting states fail to reach a mutual agreement within a two-year period if the taxpayer request so. Subsequent to this arbitration clause, the OECD also developed procedural rules that states can use during the arbitration procedure. This article evaluates whether, almost six years after its adoption, the OECD arbitration clause has been included in double tax conventions concerning the prevention of double taxation. This article also evaluates to what extent the procedural rules provided for by the OECD are adopted.
Professional Communication of the Tax Authorities
Authors: Höglund Mats
Published: February 2022

Tax cases involve large-scale case handling in which the communication between the tax authorities and the taxpayer is as common as it is important. To ensure that tax decisions are as accurate as possible communication must follow legal regulations, without underrating the psychological importance of the communication between the tax officer and the taxpayer. This article centres on the psychological effects of the communication between taxpayers and the tax authorities as well as the ethical principles involved.
The Implementation of FATCA into German Law: Current Draft Decree-Law and Remaining Uncertainties
Authors: Mückl Norbert , München Markus
Published: February 2022

In the U.S., FATCA comes into effect on July 1, 2014. The aim of FATCA is to counter tax evasion or avoidance in the U.S. through foreign financial institutions. FATCA stipulates a compulsory withholding tax that could only be avoided by fulfillment of specific, broad obligations of cooperation of the foreign financial institutions. For the purpose of the implementation of these obligations into national law, the German Ministry of Finance took preparatory actions over the past two years which lead to a respective draft decree-law, announced on March 6, 2014. The final decree is intended to provide a basis for the implementation of the obligations provided by the German/U.S. Intergovernmental Agreement concluded on May 31, 2013. Even though financial institutions were supposed to register with the IRS until April 25, 2014 significant questions remain as to the scope of the IGA and the German decree that must be clarified first in order to secure legal certainty and not to risk another delay in the implementation process. This article provides an overview of the national FATCA implementation process and points out particular uncertainties that financial institutions still face which need to be addressed promptly by the German authorities before FATCA could become an efficient tool to combat tax evasion or avoidance.
Financial Transaction Tax: Pan-European Market for Master-Feeder Structures  or Part of It  Smothered?
Authors: Adema Raymond P.C.
Published: February 2022

The European Commission (EC) published a revised version of the proposal for a common system for the levy of a Financial Transaction Tax (FTT) on 14 February 2013.1 The FTT is a tax imposed on financial institutions handling for transactions in financial instruments. The proposal lacks specific provisions master-feeder structures as referred to in the UCITS Directive. As yet little is known about the consequences of a lack of such provisions.

This contribution describes the author's research into whether the proposal sufficiently takes account of the objectives of the UCITS Directive. It shows the EC's proposal to have insufficiently considered master-feeder structures. This, hence, distorts the competition between these structures. The proposal should be adapted in places to eliminate or reduce such distortion.
Ten Years of Dutch Loss Compensation Regime for Holding and Financing Companies
Authors: Braeken Bart , Bobeldijk Arco C.P.
Published: February 2022

Dutch holding and financing companies are subject to a specific tax loss compensation regime, the so-called holding company loss rule. In short, the purpose of this rule is the prevention of the compensation of losses resulting from holding and financing activities with profits from operational activities. This article concerns an evaluation of the rule from both a policy perspective and a tax-technical perspective. Several imbalances and inadequacies of the rule, in particular with respect to the application of the rule in cross-border situations, are highlighted.
When Does the Context Otherwise Require in Article 3 of the OECD Model Convention?
Authors: Castro Rafael Tena
Published: February 2022

This article focuses on the interpretation of tax treaties and, particularly, the expression 'unless the context otherwise requires' comprised in Article 3 of the OECD Model Convention. In the hopes of providing certainty in double tax cross-border transactions, the chapters of this article explore the applicable provisions, relevant case law and subsequent legal consequences facing these kinds of international tax issues.
Shareholder Loans in Danish Tax Law  (Foreign) Shareholders Beware!
Authors: Jeppesen Inge Langhave , Terkilsen Lars Kjærgård
Published: February 2022

Beware - a new Danish provision on shareholder loans means that it can become quite expensive for a shareholder to have a loan in his company - a so-called shareholder loan.

The starting point is that shareholder loans are prohibited under the Danish Companies Act and must be repaid. Nevertheless, a survey by the Danish tax authorities shows that several companies extend loans to their shareholders. Consequently, the Danish Parliament has adopted section 16E of the Tax Assessment Act which deals with the regulation of shareholder loans in a tax context. The result of the regulation is that a shareholder loan will - with a few exceptions - be re-categorized either as salary or as a dividend paid to the shareholder.

The re-categorization only takes place, if the shareholder is a natural person with decisive influence over the company pursuant to section 2 of the Tax Assessment Act. The regulation encompasses both resident and foreign shareholders as long as the decisive influence is present.

Taxation of a shareholder loan is not tantamount to it being legal in a corporate law context. This means that the shareholder might end up in a situation where the loan is being taxed and furthermore the taxpayer has to repay the loan.

This article explains the regulation and the way decisive influence has to be understood. An analysis of case law on the exceptions to the regulation is carried out and finally a few remarks on the tax consequences for the shareholder - being resident in Denmark or abroad - are explained.
Notes on the Conditions for a Corrective Financial Transaction Tax
Authors: Tavares Diogo Ferraz Lemos
Published: February 2022

In the aftermath of the financial crisis of 2007-2008, a general belief has emerged that some practices and behaviours carried out by financial agents have led to risky, selfish and unreliable conduct within financial markets. Such a belief leads to a new discussion on the regulation of the financial sector, comprising possible governmental interventions through corrective taxes.

This article aims to establish the premises and conditions which must be observed in the possible implementation of a Financial Transaction Tax (FTT) with corrective objectives. At this time, it seems to be extremely useful to set forth the fundamental legal basis for this kind of taxation, since the legitimacy or adequacy of all concrete cases and specific legal provisions will depend on such legal grounds.

To reach such an aim, we: (i) address the justification and possible corrective objectives of the taxation on financial market; (ii) establish the basic elements of FTTs; (iii) analyse the reasoning for the implementation of a corrective FTT; and finally, (iv) examine some specific issues related to the effects of the mentioned corrective taxation, which must be addressed in order to ensure the efficiency of such a tax.
The BEPS Project: Disclosure of Aggressive Tax Planning Schemes
Authors: Baker Philip
Published: February 2022

Action 12 of the Base Erosion and Profit Shifting (BEPS) Action Plan promises the development of new rules on disclosure of aggressive tax planning arrangements. This article examines the meaning of the phrase, the experience of the UK with Disclosure of Tax Avoidance Schemes, and raises some issues about the Organization for Economic Cooperation and Development (OECD) plans in this area.
The Non-Businesslike Loan: A New Doctrine for the Tax Treatment of Equity and Debt Capital in the Netherlands
Authors: van der Velden Rick , Bobeldijk Arco C.P.
Published: February 2022

The (difference in) taxation of equity and debt capital is in many countries a regularly recurring subject of debate, legislation, and case law; in the Netherlands this is not different. A new phenomenon has recently arisen in Dutch case law that casts new light on this discussion. In literature, this phenomenon is referred to as the 'non-businesslike loan', best described as a sort of 'hybrid loan' that is partly treated as debt capital and partly as equity capital for tax purposes. In this contribution, we offer the international reader an introduction to the doctrine of the non-businesslike loan. We discuss the Dutch principal rules of the qualification of capital loans, the qualification of a loan as a 'non-businesslike loan', and address the treatment of the interest and write-downs on a non-businesslike loan. Finally, we highlight some international aspects of the non-businesslike loan.
Vodafone Transfer Pricing Decision: A Mistake of Judgment
Authors: Sanghavi Dhruv
Published: February 2022

On 10 October 2014, the Bombay High Court exercised its non-appellate jurisdiction to quash a transfer pricing claim in the case of Vodafone, in which the tax authorities sought to apply the arm's length principle to equity financing transactions. This interpretation has been accepted by the Government of India, which has decided not to appeal against the decision of the Bombay High Court. In this contribution, the author critically analyses the controversy to find that not only was the court's interpretation of the law potentially incorrect, but also that it decided the case out of turn, and without allowing for the facts of the case to be adequately examined.
BEPS: Is the OECD Now at the Gates of Global Formulary Apportionment?
Authors: Robillard Robert
Published: February 2022

Several Base Erosion and Profit Shifting (BEPS) public discussion drafts recently released have indirectly called into question the relevance of the arm's length principle for transfer pricing and international taxation purposes. This article highlights the numerous instances where formulary-like approaches have lately been put forward by the OECD to replace the arm's length principle. Are we witnessing a major philosophical shift by the OECD?