bluuebunny/crossref_metadata_2025 huggingface dataset:
Taxation: A New Corporate Governance Instrument in France?
Authors: Rossignol Jean-Luc
Published: February 2022

Under a legal interpretation of the concept of governance, the tax authorities can be considered as a stakeholder, extending the partnership approach to include an actor rarely taken into consideration. This makes tax and legal questions more important in the company and, consequently, strengthens the links and regular exchanges with the audit committee and/or board of directors, who are now much more involved in these matters than in the past. This development at least indicates the role the tax authorities would like to play in governance, whereas the notion of ethics in tax behaviour is a complex concept. Such shifts undeniably reposition the State and its tax authorities inside the sphere of business and corporate relations with the various stakeholders. This could result in creation of a genuine ‘tax contract’ in the context of renewed tax regulations.
The Netherlands: New Legislation Regarding the Taxation of Trusts
Authors: Buursma Jogchum , Auerbach Xavier
Published: February 2022

With effect from 1 January 2010, the Dutch Inheritance and Gift Tax Act 1956 (IGTA) has been revised. The Netherlands Ministry of Finance identified the taxation of existing trust schemes and schemes that make use of irrevocable discretionary trusts allowing the avoidance of income tax and/or inheritance or gift tax in particular, as one of the most important objectives of the revision of the IGTA. The basic idea of the new legislation is that irrevocable and discretionary trust schemes are ignored for tax purposes (both for personal income tax and for IGTA purposes) and their income and assets attributed to the individuals involved.
Shareholders’ Subordination Agreements in Light of German Commercial Law, Insolvency Law and Tax Law
Authors: Graf Kerssenbrock Otto-Ferdinand
Published: February 2022

Subordination declarations play a major role for crisis-threatened enterprises in the prevention of duty to apply for insolvency procedures. The German legal environment for Shareholder’s Subordination Agreements has recently changed drastically, since Germany has significantly changed and adapted the concept of Corporate Equity Protection – which was formally laid down in section 30 and the following of the Limited Liability Company Act (GmbHG) – for all kinds of enterprises and moved it into the legal framework of Insolvency Law (InsO).

This article covers the legal situation before and after the reform of the concept of Corporate Equity Protection and gives a coherent, practical presentation of the commercial, insolvency, and tax law aspects of this still important financing instrument.
International Pension Portability: The Dutch Approach Reviewed
Authors: van den Hurk Hans
Published: February 2022

Coordinating the Dutch transfer of pension capital in an international context (international value transfer) with the bodies of Dutch civil and tax legislations governing these transfers is, even in a ‘pension country’ as The Netherlands, a cumbersome process, and one that entails a number of obstacles for the Dutch pension administrator in meeting its legal international transfer obligations. This article addresses the Dutch regulations governing international value transfer and what they mean for the Dutch pension administrator in relation to the requirements set on international value transfers and considers the question of whether a more efficient system for the Dutch mandatory international value transfer regulations could be designed and would also be acceptable for other Member States of the European Union (EU).
The Concept of Permanent Establishment: A Comparative Analysis of Tax Treaty and Swiss Domestic Tax Law
Authors: Reilingh Daniel de Vries
Published: February 2022

The author examines the concept of permanent establishment (PE) under Swiss tax law from a comparative Tax Treaty perspective and finds that this concept in the Federal Direct Tax Law (FDTL) is influenced by international tax law, although differences exist. He then identifies major differences between Swiss intercantonal tax law and the FDTL, and also international tax law. He is of the opinion that the PE concept of the FDTL, which is also valid in an international context, should be adopted in a Swiss intercantonal situation. He raises the question of whether the negative list of Article 5, paragraph 4 Model Tax Convention on Income and on Capital of the Organisation for Economic Co-operation and Development (MC OECD) should also be included in the Swiss tax legislation (FDTL and Federal Tax Harmonization Law {FTHL}).
Profit-Participating Loans in International Tax Law
Authors: Dyppel Katja Joo , Bundgaard Jakob
Published: February 2022

The article analyses the tax classification and tax treatment of profit participating loans (PPL) in international tax law. In order to analyse the tax aspects of PPL, the commercial and economic background is provided. Following this, a comparative overview of the tax law classification in the United States and Germany and an in-depth analysis of the tax classification and treatment in Danish law are provided. Next, the article analyses whether payments under PPL fall under the scope of the EU corporate tax directives and also considers the income tax treaty protection of payments under PPL.
The High Court in India Relies on OECD Approach for Marketing Intangibles in the Maruti Suzuki Case
Authors: Levey Marc M.
Published: February 2022

The ‘Maruti’ Suzuki India Ltd v. Additional Commissioner of Income Tax Transfer Pricing Officer of New Delhi decision is a novel Indian judicial decision that attempts to address the concept of marketing intangibles. While following the US decision in DHL Corp. et al. v. Comm’r, which also addressed marketing intangibles, the High Court of Delhi’s decision is fraught with inconsistencies and impracticality notwithstanding its credible view of the marketing intangible concept. While the Indian Supreme Court has set aside this decision and the TPO will examine the matter in accordance with existing law, the decision has put into play more questions and concerns than answers. At a minimum, practitioners and the Organisation for Economic Co-operation and Development (OECD) Committee on Fiscal Affairs, which address the transfer pricing aspects of intangibles, have a strong basis from which to address these questions and concerns and provide meaningful guidance.
The Position of the EU Member States’ Associated and Dependent Territories under the Freedom of Establishment, the Free Movement of Capital and Secondary EU Law in the Field of Company Taxat
Authors: Smit Daniël S.
Published: February 2022

This article examines the unexplored position of the Member States’ associated and dependent territories under the Treaty freedoms and secondary EU law in the field of company taxation. Based on an analysis of the relevant case law of the European Court of Justice (ECJ) and having regard to the degree of legal integration as it exists between the Member States and each respective associated or dependent territory, an analysis is made of the extent to which the application by a Member State of a restrictive company tax measure in situations involving an investment from or in an associated or dependent territory should fall under the personal and territorial scope of the Treaty freedoms and secondary EU law in the field of company taxation.
Conference Report: ‘Double Taxation and Federal Systems’
Authors: Martini Ruben
Published: February 2022

The conference of the 'Arbeitskreis Steuergeschichte' analysed the interaction between double taxation and federal structures from both the historical and legal perspectives. Having been a characteristic of tax law since the nineteenth century, the increasing cooperation between states inevitably raised the question of the evolutionary development of these transnational mechanisms. The conference's presentations tackled this comprehensive subject by examining the different stages of development the avoidance of double taxation passed through within federal structures. Based on these historical parallels on the inter-local level, the understanding of today's provisions to avoid international double taxation could be refined.
International Tax Arbitrage
Authors: Rosembuj Tulio
Published: February 2022

The end of this decade leaves us with a scenario bare of any justification. There was not only the pursuit of certain logic for immediate profits but also the global aim to turn taxes (both local and international) into profits. Arbitrage was aimed to take advantage of differences in prices, and tax arbitrage went a step further aiming to turn the tax advantage into price. The aim was not solely to minimize the tax impact but also to add financial profits to the tax profit, which then became a source of income. The general principle against tax evasion establishes the restriction of any abusive practice in tax arbitrage. The double taxation principle needs the correlation of taxation, at least, in one place. One of the means used to avoid it was the use of financial hybrids and other hybrid forms. The Bank for International Settlements, Basel I, and the increasing role of credit rating agencies contributed substantially to the massive development of financial and tax arbitrage, both at local and international levels. We are in a position to know what triggered the financial markets crisis, but surprisingly enough, neither the financial law nor tax law has yet reacted. Scholars, regulations, and precedents provide sufficient basis for such a reaction!
Worrying Interpretation of Liable to Tax: OECD Clarification Would Be Welcome
Authors: de Graaf Arnaud , Pötgens Frank P.G.
Published: February 2022

This article examines the rather strict interpretation of 'liable to tax' by the Dutch and Canadian Supreme Court requiring persons to be effectively liable in order to be treated as a treaty resident. As outlined, such an interpretation has the consequence of preventing tax-exempt bodies from being able to claim treaty benefits while also resulting, under certain allocation rules, in source states being unable to exercise their taxing rights. In the view of the authors, a person should be regarded as a treaty resident if he has such a nexus with a state that he would normally be taxed on his worldwide income there. Whether he actually pays tax is irrelevant, which is the view of many. For resolving the issue, the authors outline a proposal.
Lesson Learned by the New Italian Law on Limited Tax Shield on Debt: Much Ado about Nothing
Authors: Tagliavini Giulio , Lanzavecchia Alberto
Published: February 2022

Corporate finance management rules are written under the assumption that financing costs are fully deductible from taxable income. If this assumption is relaxed, such rules need to be revised. We review traditional management tools and propose a new set of guidelines for financial management. The tax reform introduced in Italy, which creates a partial tax deduction for financing costs, offers a case study to measure the impact of such rules on a firm's profitability. The general wisdom among academics and practitioners was of a further pressure on economic performance of firms due to a higher tax burden. Is this concern effective? Do Italian firms pay more taxes in the following years?

We checked the effect of the new rules on a sample of 2,025 large Italian firms. We did not find a deep impact. Effects are limited to one sector, characterized by operating profitability on sample mean and financial leverage below sample mean. Policy makers are now advised to fine-tune this regulation or to abandon it.
Financial Innovation and a Universally Applicable Distinction between Accruals and Realization Taxation
Authors: Wood Richard
Published: February 2022

Existing accruals/realization tax borderlines differ by jurisdiction and are generally incapable of dealing consistently with many innovative structured financial instruments, particularly hybrid instruments and those incorporating both fixed and contingent returns. This article develops a new analytical approach to defining the accruals/realization tax borderline, which does not disturb, and is consistent with, the existing realizations treatment of shares and the accruals treatment of bonds. The approach relies on a single, standard measure of risk, the annualized volatility of returns. The approach provides a unique solution for all innovative financial instruments and could have application in all jurisdictions.
Non-profit Taxation on Corporations in the EU: Lessons from Corporate Tax Reforms in Germany and Tax Implications of the Global Economic Crisis
Authors: Zinn Benedikt
Published: February 2022

Without any doubt, one of the primary policy issues in public finance in the European Union (EU) is the issue of tax competition, which results in a race to the bottom in statutory tax rates, tax base broadening policies, and potential distortions in firm decisions. The literature focuses mainly on profit taxes; however, as the financial crisis is biting into the real economy, non-profit taxes have become a more important factor in the overall tax burden on companies. In this context, one important question is whether non-profit taxation and tax base broadening policies have accelerated the course of economic downturn. This article analyses the impact of non-profit taxes on the overall tax burdens of companies. It offers not only a broad geographical scope but also great detail in calculations of tax burdens on income-independent taxes. In particular, it reveals that tax regimes characterized by restrictive thin capitalization rules, tightened loss offset rules, or a high proportion of non-profit taxes in the overall tax mix are more severely hit by economic downturns. The various tax measures taken by many EU-27 Member States in response to the crisis are, therefore, looked upon favourably.
Legal Valuation in Chinese VAT and Business Tax
Authors: Yang Xiaoqiang
Published: February 2022

Valuation issues permeate all tax laws and regulations. In Chinese value added tax (VAT) and business tax, legal valuation is mandatory under non-monetary consideration transaction, anti-avoidance, and transfer-pricing circumstances. In recent years, tax valuation is becoming more and more complicated in intangible property transactions and financial instrument transactions; these types of transactions constitute big challenges to traditional legal valuation. In China, legal valuation exists in tax laws, accounting standards, and valuation standards; there are some divergences among these regulations. How to coordinate these standards is becoming a critical problem. This article focuses on an analysis of legal valuation in Chinese VAT and business tax, sorts out the concepts evolution from average sale price to market price and to fair value, and points out that the average sale price approach has brought some problems.
The Luxembourg Financing Circular: Something New on the Horizon?
Authors: van Kuijk Frank , Wiertsema Taco
Published: February 2022

On 28 January 2011, the Luxembourg tax authorities issued a circular, setting out their new policy for issuing advance pricing agreements to companies engaged in intra-group financing activities. This article analyses the circular and comments on it.
The Court of Justice and the OECD Model Tax Conventions or the Uncertainties of the Distinction between Hard Law, Soft Law, and No Law in the European Case Law
Authors: Dubut Thomas
Published: February 2022

Through an exhaustive study of the ECJ case law on tax matters, this article aims at identifying the role and the functions of the OECD Model Tax Conventions and their Commentaries in the justification of the judgements. In fact, although the OECD Model Tax Conventions are not valid norms of the EU legal order in a typically positivist(Kelsenian) perspective, ECJ seems sometimes to rely on them in order to justify its position. However, this study reveals that the OECD Models have no impact on the interpretation and application of secondary EU law, whereas their role is constantly declining with respect to the appreciation of the compliance of domestic legislation and bilateral tax treaties with the fundamental freedoms of the common market. This would be a very welcomed development, since the OECD Models are intended to govern classical interstate relations and therefore their rules are not always appropriate in more advanced stages of regional integration.
On the Profitability of Investments in Photovoltaic Modules in Germany under Consideration of Taxation
Authors: Schanz Sebastian
Published: February 2022

This article analyses the profitability of investments in private photovoltaic (PV) modules (hereinafter 'PV modules') in Germany. Investments in private PV modules have been promoted through governmental programs since the early 1990s. Promotion has been extended in 2000 and 2004 in the form of guaranteed market price exceeding fixed fees for electricity produced by private PV modules. In addition to these programs, there are several preferred tax treatments and special debt financing programs for such investments. However, we show that profitability based on the net present value (NPV) under consideration of taxation depends on various assumptions. Despite the intensive subvention in terms of fixed fees, low interest rates on debt, and additional write-off possibilities for tax purposes, the results of the investigation advise private investors to be careful with investments in rooftop PV modules under the current parameter situation.
Direct Taxation and State Aid: Recent Developments Concerning the Notion of Selectivity
Authors: Quigley Conor
Published: February 2022

The interaction of state aid and taxation continues to give rise to conceptual difficulties, despite or, perhaps in some cases, because of the developing jurisprudence of the European Court of Justice and the General Court. Three recent cases attempt to bring a greater degree of coherence to the subject: Cases 78/08 to C-80/08, Paint Graphos, judgment of 8 September 2011; Case C-279/08 P, Commission v. Netherlands, judgment of 8 September 2011; and Cases C-106/09 P and C-107/09 P, Commission v. Government of Gibraltar and United Kingdom, judgment of 15 November 2011.
Brazil: CFC Rules Update
Authors: Rosenblatt Paulo
Published: February 2022

In August 2011, the Supreme Court of Brazil continued the judgment on the constitutionality of the Brazilian Controlled Foreign Corporation (CFC) legislation. The final decision is dependent on a sole justice's opinion, but some conclusions can be drawn from the case so far. In April 2011, the Superior Court of Justice of Brazil also decided one leading case on the CFC rules, which restricted its scope. The case law under review is a signpost that the Brazilian CFC legislation needs to be reformed in order to match reasonable and internationally accepted parameters.

In this article, the author provides an overview of the Brazilian CFC regime. It was originally written as a paper presented at the 2nd London Alumni International Tax Conference, Institute of Advanced Legal Studies, University of London.
Legal Nature of Advance Pricing Agreements under Turkish Law: A Comparative Analysis
Authors: Öner Cihat
Published: February 2022

This article first identifies and defines the legal nature of advance pricing agreements on a theoretical basis using the criteria developed in the literature and case law for administrative contracts. It then underlines and assesses the impact of case law on the definition of an administrative contract using a comparative approach. The general research question is whether these criteria can be employed to determine the legal nature of advance pricing agreements under Turkish law.
Investigation Methodology for Information-Driven Horizontal Fiscal Supervision: A Dutch Approach to Improving Effective Law Enforcement
Authors: Van Engers T.M. , Berkhout T.M.
Published: February 2022

Modern times require more effective and efficient law enforcement strategies. To become effective, law enforcement agencies and its supervisors have to become more agile, i.e., adaptive to new modes of behaviour of the ones subjected to their supervision. In this article we present an investigation methodology that enables supervisors to optimize the use of information and decide on the best strategies when designing their compliance monitoring systems. The theoretical background that was used for developing this methodology comes from scientific disciplines including artificial intelligence, business economics and legal philosophy. While this methodology is applicable in other domains as well, we will illustrate the methodology with examples from tax law.
The Internal Market versus the Right of Member States to Levy Direct Tax-A Clash of Fundamental Principles
Authors: Elwes Sylvia
Published: February 2022

The EU treaties do not give specific powers to the Council to pass laws on direct tax. Nevertheless, the Court of Justice of the European Union (the CJEU formerly ECJ) has been carrying out the negative integration of tax laws. On preliminary reference applications, the court has interpreted the treaty articles about the Internal Market in such a way as to adversely affect national tax laws. A Member State which does not amend or repeal a national tax provision which breaches an Internal Market article is in breach of an EU treaty obligation and can be brought before the CJEU by the Commission. This article shows how individual taxpayers have avoided paying tax by pleading before a national court that the law under which they are being taxed conflicts with EU law. The author argues that the present situation is unsatisfactory, and recommends changes that could be made to the Treaties to regularize the situation.
The European Arbitration Convention on Transfer Pricing: Legal Fossil or
Authors: de Carolis Daniele
Published: February 2022

This article provides an analysis of the European Arbitration Convention on Transfer Pricing focused on the ever-increasing role soft law is playing in the drafting and diffusion of international and European rules. The main argument of this survey is that, rather than an instrument at the border of Community law, the Arbitration Convention lies at the centre of a complex and innovative system of new European governance, in which a hard law instrument (the Convention) is supported by a soft law instrument (the Code of Conduct) and by monitoring and mutual learning mechanisms carried out by the Joint Transfer Pricing Forum (JTPF). These features help better understand the Convention's increasing application in practice as well as the remarkable impact of the Code of Conduct at national level, e.g., in Italian law.

Analyses of the European Arbitration Convention are mostly focused on a traditional legal approach and consequently tend to consider this instrument either as a mere international treaty outside the European legal framework or as a no man's land between Community law and ordinary international law or even as a sort of 'legal fossil', i.e., a legally obsolete instrument at the border of European law. These approaches have generally emphasized the Convention's drawbacks, especially with respect to the potential advantages related to its adoption in the form of a European directive according to the Commission's original design. In other words, according to these approaches the Convention is but a sort of second-best, a watered-down compromise which the Commission had to accept in the wake of the Member States' reluctance to waive their fiscal sovereignty in the transfer pricing field. In contrast to these approaches, this work puts forward an analysis of the Convention which stems from soft law's ever-increasing role in international law and in the European integration process. As will be shown in the remainder of this essay, this alternative vision allows to account for the remarkable impact the Convention is starting to have in practice, both at international and national level.
Transfer Pricing Planning with Accuracy and Control
Authors: Zielke Rainer
Published: February 2022

Traditionally the Comtax® System provides not only current in-depth information on numerous national systems of taxation, but also quantifies crossborder payment transfers, and thus allows both a quick access on relevant detail knowledge and a direct comparison of different scenarios. This has now been upgraded by the new Comtax solution for transfer pricing were the arm's length principle, the definition of related companies, transfer pricing methods, business restructuring and dispute resolution are taken into consideration. The theory of international tax planning provides objectives and concepts of international tax planning and demands expertise in current and reliable information - also on transfer pricing. Comtax® System and Comtax® TP Tool are now jointly able to cover all aspects of international tax planning.
What Is Wrong with (The Rules of) the Game?
Authors: Snel Freek PJ
Published: February 2022

Public outrage is growing about 'immoral tax evasion by multinationals'. This calls for a thorough and polemical response from the tax advisory profession. This article investigates the following questions: 'can we define the boundaries to "ethical tax planning"; "is the Netherlands a tax haven"; "what are the fundamental reasons multinationals can pay little tax without acting illegally"; and "how can we really improve the rules of the game"?'

The growing criticism with respect to tax evasion by multinational companies is understandable. But, if one takes a closer look, this criticism is largely unjustified. The author concludes that we cannot ask more from multinationals than paying tax in accordance with the law and in a balanced relation to the value of the benefits they derive from government services.

The rules of the game can be improved with respect to the relation to the benefits from government services. In the author's view, this requires replacing the arm's-length principle for the allocation of profits to countries by a more robust approach. It requires the recognition by governments that there is a clear limit to what they can ask from multinational companies and what not.
The Impact of Science and Technology on Taxation
Authors: Van Brederode Robert F.
Published: February 2022

It is impossible to provide a complete overview of all occurrences where taxation exercises influence on or is influenced by technology and science. However, it is feasible to demonstrate the interaction of technology, science and taxation in a number of selected areas. This article describes this dynamic as it relates to empirical legal research, which has the purpose of determining whether a particular law or process is actually achieving its stated objectives; the use of statistical science in tax auditing to determine the level of compliance through the analysis a relatively small part of the available date (sample); the introduction of technology in tax administration to streamline and enhance the efficiency of processing vast amounts of data, and the different complexities encountered by developed versus developing countries; and finally, the use of software technology, i.e., ERP systems and tax engines, by global corporations to improve their tax compliance and tax planning, especially in the area of sales and consumption taxes and customs duties.
Critical Assumptions in Advance Pricing Agreements: A Comparison between the OECD Guidelines and the American Tax System
Authors: de Carolis Daniele
Published: February 2022

According to the OECD Guidelines, critical assumptions hold fundamental importance within the discipline of advance pricing agreements. Nonetheless, only a few countries provided detailed rules on this aspect in their national legislation on advance pricing agreements. In order to urge national legislators to pay greater attention to this crucial aspect of advance pricing agreements, this article will first look at how critical assumptions are dealt with in the OECD Guidelines; then, it will analyse the discipline of critical assumptions in one of the jurisdictions with the longest and most significant experience in the field of advance pricing agreements, i.e., the United States. Comparison between the OECD and the US systems will show two different approaches to critical assumptions which will be further discussed in the remainder of this work. Finally, relying on this comparison, some suggestions to improve the Italian legislation on advance pricing agreements will be put forward.
Anti-avoidance Legislation of Scandinavian Countries with Reference to the 2014 Corporate Income Tax Burden of the Thirty-Four OECD Member States: Denmark, Finland, Norway and Sweden Compared
Authors: Zielke Rainer
Published: February 2022

Despite continuous instability in the European Union, Scandinavian countries exhibit continuously economic growth and stability. Three ( Denmark, Norway and Sweden) are not in the Eurozone and one (Norway) is only a European Economic Area Member State. In the article 'Transfer Pricing Planning with Accuracy and Control' (see intertax, issue October 2013, pp.542-550) the author had outlined the importance of transfer pricing planning in international tax planning. As the advantages and strategies of international tax planning with regard to antiavoidance legislation in Scandinavian countries had not been investigated so far, this is now done in detail - with reference to the corporate 2014 income tax burden of the thirty-four OECD Member States.
Legal Aspects of Statistical Sampling in Tax Compliance Auditing
Authors: Van Brederode Robert F.
Published: February 2022

Sampling is in essence an estimation of tax compliance. Taxpayers may be either in a position of underpayment, overpayment or zero payment. There is a direct correlation between the level of accuracy of the sample and the accuracy level of the underlying documents. After providing a short explanation of a statistical sample, this article examines whether sampling should be allowed and, if so, under what conditions, as sampling is an estimation method and does not provide exact information on the tax position of the taxpayer. Discussed are the role of the allocation of the burden of proof, the type of tax, the principle of fair play, the influence of the confidence interval, and the risk of inaccuracy.

Separate discussions are offered on the use of sampling for the determination of interest and penalty payments, and on the issue of extrapolation of sampling results. The author supports the use of sampling agreements between taxpayers and tax authorities, because it clarifies the terms under which the sampling will take place and will likely increase understanding of the process by the taxpayer and, thus, his acceptance of the outcome.
The New German DCL and Dividend Matching Rules and EU Law
Authors: Linn Alexander , Thömmes Otmar
Published: February 2022

Germany recently amended the scope of two rules that are designed to counter international double-non taxation: the scope of the dual consolidated loss rule has been expanded and a general matching principle has been introduced for dividends, under which an exemption is denied if the underlying payment was an expense for the payer. In this article, we argue that such uncoordinated action, even though understandable from a policy perspective, gives rise to cases of double taxation and, more importantly, is not in line with EU law.
Fundamental Change in Countries Corporate Tax Framework Needed to Properly Address BEPS
Authors: de Graaf Arnaud , de Haan Paul
Published: February 2022

Traditionally, countries impose their corporation tax on an entity-by-entity rather than a group-wide basis. As the taxability of entities, tax bases, and tax rates vary from one country to another, these differences give rise to mismatches, leading to double taxation, but also to non- or almost nontaxation. In practice, however, the overall operation of the countries' divergent corporation tax systems seems to allow MNCs to reduce their overall tax burden by entering into strategic 'Base Erosion and Profit Shifting' operations. In its February 2013 report, the OECD suggests developing a global and comprehensive action plan to provide solutions for realigning international taxation standards with the current global business environment. In its follow-up report of July 2013, the OECD identifies fifteen specific actions. It, however, advocates continuing to maintain the current building blocks of international taxation, including the separate entity approach and the arm's length principle. The question arises whether such an approach would address the issue of BEPS effectively. Another issue is that this will not result in MNCs' profits being fairly allocated between states, given that measures to counter hybrid mismatch arrangements and to strengthen CFC rules mean that an MNCs' residual profit will be attributed to the state in which its top holding company is resident.
Assessing the Tax Challenges of the Digital Economy: An Eye-Opening Case Study
Authors: Falcao Tatiana , Michel Bob
Published: February 2022

The article demonstrates how under the current state of world affairs, a digital service provider could render its services to different jurisdictions without actually meeting any of the OECD's current substantial presence tests that would legitimize the imposition of a tax in the country of source. It proposes a case study to illustrate how, by mere application of the current non-abusive rules contained in the OECD Model Tax Convention, a digital service provider could render a multitude of services to different countries without actually paying any taxes in the country where the revenue arises.
Service Income under Brazilian Tax Treaties: The Possible End of the Article 7 v. Article 21 Battle, but the Start of a New Old One?
Authors: Ferreira Vanessa Arruda
Published: February 2022

In this article the author presents the internal review by the Brazilian tax authorities of its position concerning the treatment of technical service income under tax treaties against the background of recent court decisions and the manifested intention of the Finnish government to denounce the Brazil-Finland tax treaty. It reveals that, although the Article 7 v. Article 21 battle may be close to an end, some elements in the internal review process suggest that taxpayers may face an old and thought-to-be-over battle again .
The Definitions of Dividends and Interest Contained in the OECD Model, Actual Tax Treaties, and the German Model
Authors: Bärsch Sven-Eric
Published: February 2022

Tax treaties distinguish between dividends and interest, and entitle recipients of this remuneration derived from financial instruments to different treaty benefits in the source country in particular. Hence, the definitions of dividends and interest for tax treaty purposes are decisive. This article presents and compares these definitions contained in the OECD Model and the tax treaties agreed by Australia, Brazil, Germany, Italy, and the Netherlands. It offers an analysis of the definitions of dividends and interest outlined in the German Model and reveals that legal certainty is not fully achieved. Moreover, the German Model does not comprehensively prevent the effect of hybrid mismatch arrangements.
The CJEUs Conflicting Case Law on Neutralization
Authors: de Groot I.M.
Published: February 2022

In this article, the author discusses the different ways the Court of Justice of the European Union (CJEU) applies the concept of neutralization in the area of withholding taxes on the one hand and in the area of personal allowances on the other hand. She also discusses recent case law developments in the area of personal allowances. In conclusion, the author explains why the CJEU has adopted different approaches to this issue and presents what she believes would be an accurate and consistent approach.
Taxation and Digital Economy: Europe Is Ready
Authors: Sutich Maria Teresa , Centore Paolo
Published: February 2022

The European Commission DG TAXUD published the report released by the Expert group on taxation of the Digital economy. The analysis provided in the said document shows the progress of the action begun by the European institutions with the aim to give the legal bases and the technical instruments implementing new rules for taxation of electronic services. From January 2015, the destination principle and the MOSS1 are going to enter into force. The application of that model projected within the VAT system is welcome from the Member States and also from international organizations such as the OECD and the G20, with the aim to extend the new rules also to tax field different from indirect taxation.
Aggressive Tax Planning in EU Law and in the Light of BEPS: The EC Recommendation on Aggressive Tax Planning and BEPS Actions 2 and 6
Authors: Dourado Ana Paula
Published: February 2022

The purpose of this article is to critically assess the meaning of aggressive tax planning and its scope in the current international move to fight against base erosion and profit shifting (BEPS). In the context of the BEPS initiative, aggressive tax planning has been broadly used in several Organization for Economic Cooperation and Development (OECD) and EU soft law instruments. However, it is not clear what new features aggressive tax planning does bring to the settled legal concepts of tax avoidance and tax evasion, and whether it is a legal or merely a tax policy concept. In order to find the meaning of aggressive tax planning in the BEPS context, some of the recommendations put forward in BEPS actions 2 and 6 and in the EC Recommendation on Aggressive Tax planning are analysed and compared in this article.

The article also aims to illustrate some of the reciprocal influences and interaction between EU law and OECD recommendations and tax treaties. For example, the EC Recommendation on ATP, proposing the introduction of a General Anti-Abuse Rules (GAAR) in the Member States' legislation, and the BEPS Action 6 proposal to introduce a GAAR (a Principal Purposes Test Rule or PPT Rule) in tax treaties illustrate the same spirit and a holistic approach. Moreover, a PPT Rule in tax treaties concluded by EU Member States will have to be compatible with the EU fundamental freedoms and the principle of abuse in EU law. The GAAR amending the EU Parent-Subsidiary Directive and approved by the Economic and Financial Affairs Council (ECOFIN) on 9 December 2014 illustrates how EU Member States could introduce a GAAR in their treaties compatible with EU law. These reciprocal influences among domestic, international and EU law and practices lead to an acquis communautaire and to international standards which may be justified as products of global identity and related to a global sense of fairness and unfairness and ultimately of a global tax morale calling for global solutions and global tax standards.
BEPS Action 6: Tax Treaty Abuse
Authors: Luts Joris
Published: February 2022

Action 6 of the BEPS Action Plan identified treaty abuse, and in particular Treaty Shopping, as one of the most important sources of BEPS concerns. In September 2014 the OECD has issued the deliverable for action 6 that consists of three parts: (1) development of model treaty provisions and recommendations regarding the design of domestic rules to prevent the granting of treaty benefits in inappropriate circumstances, (2) clarification that tax treaties are not intended to be used to generate double non-taxation, and (3) identification of tax policy considerations that countries should consider before entering into tax treaties. In this contribution the authors critically analyse the OECD's output on action 6.
Blueprint for Reform of VAT Rates in Europe
Authors: de la Feria Rita
Published: February 2022

Within Europe differentiated rates structures date back to the introduction of VAT itself. Evidence as regards the negative consequences of applying multiple rates has been apparent for some decades. Since the late 1980s, therefore, there have been several attempts to amend European rates structures under the political guidance of the European Commission. Yet, the most recent agreed upon amendments to the rates structure have increased the level of differentiation, rather than decreased it, with more goods and services being subject to reduced rates in Europe today than even as recently as ten years ago. This reality seems to be changing in the last few years. Since 2008, a staggering twenty-two of the twenty-eight EU Member State countries have increased their VAT rates, resulting in a broad convergence of VAT standard rates across the EU around the 21% mark. Furthermore, there has also been a decrease in levels of differentiation with a reduction in number of VAT rates applicable in many Member States, as well as various base broadening measures. The latest developments seem to indicate that conditions may be present which allow the reversal of the status quo bias, creating the opportunity for base broadening tax reform. This raises the possibility that European countries might engage in an involuntary process of convergence of VAT bases, fuelled by domestic necessities. A politically achievable blueprint for reform of VAT rate structures in European is presented, which would result in a broader-based, and thus more efficient and neutral, VAT. Moreover, application of this blueprint across EU Member States would have the additional advantage of resulting in further convergence of VAT rate structures in Europe, to replace the long-sought, but so far unattainable, EU harmonization.
Location Savings: International and Indian Perspective
Authors: Jain Pankaj
Published: February 2022

Outsourcing of operations from high cost countries to low cost countries has given birth to the location savings concept. Overtime, a related broader concept of location specific advantages (LSA) has emerged, the exploitation of which gives rise to location rents. The determination and allocation of location savings/LSA and rents is a key TP issue - especially in developing countries. This article outlines the approach expressed on the aforementioned issue, in the US TP regulations (and court practise), OECD TP Guidelines and the UN TP Manual. Thereafter, the approach of the Indian tax administration and Courts is scrutinized in light of the international guidance. Finally, the authors provide their view on the road ahead for determination and allocation of location savings.
The New Brazilian Position on Service Income under Tax Treaties: If You Cant Beat em, Join em
Authors: Ferreira Vanessa Arruda
Published: February 2022

In this article, the author presents the new position of the Brazilian tax authorities concerning the treatment of technical service and technical assistance income under tax treaties. It reveals that the new and more consistent position still allowing the undesired source taxation may be a harder battle for taxpayers, but at the same time also a pragmatic solution to international double taxation.
Tax Exemptions in Status of Forces Agreements
Authors: Van Brederode Robert F.
Published: February 2022

When a country stations military and associated personnel, including contractors, in another country, the question arises whether these activities and related income attract tax in the so-called host country. Typically, the sending and host countries will conclude a so-called status of forces agreement (SOFA) to address a number of practical and legal issues associated with the presence of foreign personnel in the host country, including entry and departure rules, postal services, and taxation. SOFAs may relate to military or law enforcement purposes, or serve in the context of foreign aid programmes. After a stage-setting section, explaining the background, purpose, and scope of SOFAs in general, this article focuses on the tax provisions typically found in SOFAs. A small number of SOFAs has been selected to show similarities and differences in tax provisions and explain the associated legal issues: the multilateral NATO-SOFA and EU-SOFA as well as a number of bilateral SOFAs concluded by the United States in the areas of security, foreign assistance and counter-narcotics operations. The tax provisions vary significantly in scope, the categories of persons covered and the extent to which they are protected from taxation in the host country. Determining the correct allocation of taxing rights is further complicated due to the concurrence of multiple sets of tax rules in SOFA, bilateral tax treaties and domestic law of the host country.
The UKs New Diverted Profits Tax: Compliance with EU Law
Authors: Self Heather
Published: February 2022

In December 2014, a new UK tax was announced called Diverted Profits Tax (DPT). It is intended that this 25% tax will apply from 1 April 2015 to profits artificially diverted from the UK. In this article the author sets out how the tax will apply and considers whether the new tax is compliant with EU law and the UK's Treaty obligations. She also considers some key features of the administration of the tax which are likely to give rise to compliance burdens and legal challenges. The author also considers how the new tax fits with the Base Erosion and Profit-Shifting (BEPS) project.
Corporate Bonds in Denmark
Authors: Tell Michael
Published: February 2022

Corporate financing is the choice between capital generated by the corporation and capital from external investors. However, since the financial crisis shook the markets in 2007–2008, financing opportunities through the classical means of financing have decreased. As a result, corporations have to think in alternative ways such as issuing corporate bonds.

A market for corporate bonds exists in countries such as Norway, Germany, France, the United Kingdom and the United States, while Denmark is still behind in this trend. Some large Danish corporations have instead used foreign corporate bonds markets. However, NASDAQ OMX has introduced the First North Bond Market in December 2012 and new regulatory framework came into place in 2014, which may contribute to a Danish based corporate bond market.

The purpose of this article is to present the regulatory changes in Denmark in relation to corporate bonds. The purpose is further to analyse the tax consequences of issuing bonds in both a direct issue of bonds and through securitization.
Is a Carbon Tax Compatible with the WTO Treaties?
Authors: Falcao Tatiana
Published: February 2022

This article examines if and to what extent the World Trade Organization (WTO) is competent to issue legislation concerning environmental law obligations. It also investigates whether the WTO would be authorized to resolve conflicts arisen as a result of the imposition of unilateral environmental tax measures. In doing so, the author demonstrates the degree to which the WTO has legitimacy to impose, shape, define, exclude or admit environmental taxes.
The General Anti-Abuse Rule Proposed by the European Commission
Authors: Franz Tobias
Published: February 2022

This article takes a close look at the General Anti-Abuse Rule (GAAR) proposed by the European Commission in the recommendation of 6 December 2012 on aggressive tax planning. After an explanation of the background, the wording of the GAAR will be analysed. Next, aspects of the different approaches to interpretation and differences in the judicial system of Germany and the United Kingdom as two Member States as well as different styles of legislation will be analysed insofar as they could be relevant to the application of a uniform GAAR. The analysis shows that it is likely that German courts would interpret the proposed GAAR more broadly and apply it more often than British courts as German and British courts have different approaches to interpretation. Furthermore, in the parts of Germany where the ministerial administration is responsible for the selection of judges and the majority of them comes from the revenue, judges might be more revenue-friendly. It is therefore likely that the proposed GAAR would not be applied uniformly and most of the potential benefits such as simplification and increased legal certainty are unlikely to be achieved. However, the GAAR would impose a minimum standard of anti-avoidance measures, so there is no run towards the lowest standard. These conclusions can be applied to a supranational concept of tax abuse as well.