bluuebunny/crossref_metadata_2025 huggingface dataset:
Country notes: Tax and Whistle-Blower Protection: Part of a Commitment to Tackling Tax Misconduct in Australia
Authors: Sadiq Kerrie
Published: February 2022

Many jurisdictions face the question of whether to legislate to introduce a whistle-blower protection regime for disclosures of information regarding breaches of tax laws or misconduct relating to an entity’s tax affairs. To this extent, Australia is no exception and is in the process of passing legislation through Parliament to insert a comprehensive regime into the Taxation Administration Act 1953 for the protection of individuals who report breaches of the tax laws or misconduct. Like all regulatory reform, the introduction of the legislation has been a lengthy and controversial process which began with an announcement by the Government as part of their Federal Budget in May 2016. This article discusses Australia’s historical and recent approach to whistle-blower protection, provides an analysis of the processes which resulted in legislation being proposed and analyses some of the fundamental elements of the proposed whistle-blower protection regime for tax matters.
Case law note: The CJEU Confirms that Composite Services Cannot be Artificially Split in order to Benefit from a Reduced VAT Rate
Authors: Van der Noot Lionel , Boulangé Thibaut
Published: February 2022

On 18 January 2018, the Court of Justice of the European Union (hereafter ‘CJEU’) ruled in the Stadion Amsterdam CV case (Stadion Amsterdam CV v. Staatssecretaris van Financiën, Case C-463/16, ECLI:EU:C:2018:22 (18 January 2018)) that a single supply comprised of two distinct elements, one principal, the other ancillary, which, if they were supplied separately, would be subject to different VAT rates, must be taxed solely at the VAT rate applicable to that single supply. The rate must be determined according to the principal element, even if the price of each element forming the full price paid by a consumer can be identified.

In previous cases, the CJEU had already provided guidance on the VAT treatment applicable to a single supply comprised of several distinct elements. However, the question referred to the CJEU in the Stadion Amsterdam CV case seems to demonstrate that the concept of composite services and the related VAT treatment(s) remained partially unclear(s).

The purpose of this article is to re-examine the main guidelines regarding the concept of composite services as well as the VAT treatment applicable to such supplies in light of the clarification recently provided by the CJEU.
The Meaning and Scope of the Ancillary Principle Under Model Tax Conventions
Authors: Beretta Giorgio
Published: February 2022

This article discusses the meaning and scope of the ‘ancillary principle’ as laid down in various provisions of the OECD, UN and US Model Tax Conventions and the Commentaries thereon, i.e. the principle according to which if, under a mixed contract, an activity is ancillary to another main one, the former transaction is to receive the tax treatment accorded to the latter. Although the ancillary principle is specifically considered in various articles of the Model Tax Conventions and the Commentaries thereon, neither the meaning of the word ‘ancillary’ nor the scope of such rule is precisely clarified. The term ‘ancillary’, in fact, takes on different meanings and, thus, has divergent scopes in the relevant provision of each tax treaty. This may eventually cause two states to understand and apply the principle in a given case differently, thus leading to situations of double taxation or non-taxation. Moreover, a far-stretched interpretation of the principle could result in an erosion of the source state’s taxing rights in favour of exclusive residence-based taxation. Lastly, despite being influenced by the need to simplify taxpayers’ obligations and to facilitate their monitoring by tax authorities, the application of the ancillary principle raises several concerns in terms of potential competitive distortions between domestic and international businesses.
Country note: A Dutch Tax Law Perspective on the Implementation of a Preventive Restructuring Framework
Authors: Tol D. T. C. , Bobeldijk Arco C.P. , Akyürek T. P.
Published: February 2022

Through the proposed amendment of the EU Directive 2012/30/EU, the European Commission seeks the EU-wide implementation of a Preventive Restructuring Framework. The key objective is reduction of the likelihood of insolvency of generally viable businesses with (temporary) financial difficulties. Parallel to the Commission’s efforts, the Dutch legislator published a detailed draft bill regulating the sanctioning of pre-insolvency composition. In the EU proposal and the Netherlands’ draft legislation, relevant tax implications are not addressed. This may cause uncertainty and incentives for parties involved that interfere with the objective of a pre-insolvency composition. This article examines the Dutch tax aspects – for the debtor and involved creditors and shareholders – of common discharge and restructuring solutions in a binding restructuring plan. With every subject, general tax aspects are identified that may be relevant for other jurisdictions as well. It shows that a pre-insolvency composition may have important tax implications and that in some cases creditors and shareholders could even prefer bankruptcy over restructuring. The authors consider that the Dutch scheme needs further clarification and believe it even requires specific tax regulation. The authors recommend other EU Member States to assess the national tax elements of a binding pre-insolvency composition upon the implementation of the Preventive Restructuring Framework.
Case law note: EU VAT: Adjustment of Input VAT Case C-532/16 SEB bankas
Authors: Kristoffersson Eleonor
Published: February 2022

The initial deduction of input VAT shall be adjusted where it is higher or lower than that to which the taxable person was entitled. In SEB bankas, the CJEU stated that the obligation to adjust undue VAT deductions set down in Article 184 of the VAT Directive also applies to cases where the initial deduction could not be made lawfully because the transaction giving rise to that deduction was exempt from VAT. In contrast, the adjustment system for capital goods does not apply to undue VAT. It is up to the Member States to determine the date on which the obligation to adjust the undue VAT deduction arises and the time period within which that adjustment must be made, in accordance with the EU law principles, in particular the principles of legal certainty and legitimate expectations.
A Package Deal Is Not a Bad Deal: Reassessing the Method of Package Negotiation Under the Mutual Agreement Procedure
Authors: Cai Qiang
Published: February 2022

Traditionally, most international tax disputes among jurisdictions have been resolved through the mechanism of the mutual agreement procedure (MAP). A long-standing concern with MAPs is that competent authorities might pursue a so-called package deal, whereby a certain taxpayer’s interests would be sacrificed as part of a larger trade-off between the competent authorities. This article argues that, contrary to this common belief, a package deal under the MAP is not necessarily a bad deal; indeed, it even has the potential to strengthen the MAP mechanism. Specifically, this package deal method helps to reduce the average costs of handling MAP cases; expands the space for cooperation between competent authorities; and, if properly devised, helps to foster a stable fiscal climate. In a broader sense, the method of package negotiation also has implications for the mechanism of international tax mediation. This article adopts an interdisciplinary approach, combining the topic of the MAP with transaction cost theory.
Country note: The Principle of Ne Bis in Idem: On the Ropes, but Definitely Not Defeated
Authors: Poelmann E. , Baron J.
Published: February 2022

In the A. and B. v. Norway case decided by the European Court of Human Rights (ECtHR) on 15 November 2016 (24130/11 and 29758/11), the principle of ne bis in idem suffered a significant blow. Via the Luca Menci (C-524/15), Garlsson Real Estate (C-537/16) and Di Puma (C-596/16 and C-597/16) cases, the European Court of Justice (ECJ) was confronted with a challenging decision: either stay with the path set out by the ECJ on 26 February 2013 in the Åkerberg Fransson case (C-617/10) or follow the ECtHR and thereby strike a knockout blow to the right that is guaranteed by the principle of ne bis in idem. In its judgments of 20 March 2018, the ECJ came up with a surprising solution.
Case law note: Implications of Wayfair
Authors: Mason Ruth
Published: February 2022

By now everyone knows about the US Supreme Court’s blockbuster decision in South Dakota v. Wayfair (US: Supreme Court 21 June 2018, No. 17-494, Wayfair v. South Dakota), which overruled decades of precedent to declare that the Constitution did not bar a US state from imposing obligations on remote sellers to collect tax on sales they made into the state, even if they had no physical presence there.

 

Wayfair was hailed in US tax-policy circles for laying to rest an erroneous decision that had led to significant competition distortions between online and retain stores. It likewise has been cited as confirmation of the correctness of the OECD’s and EU’s movements to modernize the nexus standard for corporate tax, including by introducing changes to the definition of a permanent establishment (PE) that would make it easier for states to tax companies engaged in digital activities with no physical presence. This article describes Wayfair and provides some cautions about what it means for the US states and the rest of the world, especially Europe.
Case law note: Consistency of ECJ Case Law: Formal Requirements in VAT Matters
Authors: Mikula Pawel
Published: February 2022

The Court of Justice of the European Union (ECJ or the Court) has, on many occasions, considered the question of the formal requirements under VAT law. Its approach has remained consistent and can be summarized as follows: the taxpayer’s degree of liability should not be higher solely on the grounds that the taxpayer did not fulfil a formal requirement. Member States should not condition their taxpayers’ VAT burden on the satisfaction of a formal requirement if all the related substantive conditions have been met. This approach has been persistently upheld by the three most recent judgments relating to this matter, namely the Siemens Gamesa,(RO: ECJ, 12 Sept. 2018, Case C-69/17, Siemens Gamesa Renewable Energy România SRL, formerly Gamesa Wind România SRL v. Agenţia Naţională de Administrare Fiscală – Direcţia Generală de Soluţionare a Contestaţiilor, Agenţia Naţională de Administrare Fiscală – Direcţia Generală de Administrare a Marilor Contribuabili, ECLI:EU:C:2018:703.) TGE Gas Engineering (PT: ECJ, 7 Aug. 2018, Case C-16/17, TGE Gas Engineering GmbH – Sucursal em Portugal v. Autoridade Tributária e Aduaneira, ECLI:EU:C:2018:647.) and Enteco Baltic (LT: ECJ, 20 June 2018, Case C-108/17, UAB ‘Enteco Baltic’ v. Muitinės departamentas prie Lietuvos Respublikos finansų ministerijos, ECLI:EU:C:2018:47.) cases. This note will provide an overview of those newest decisions in light of the previous judgments of the Court.
Literature review: Luis Flávio Neto, International Tax Law: Context in the Interpretation and Application of Double Tax Treaties, Direito Tributário Internacional: 'Contextos'
Authors: Nogueira João Félix Pinto
Published: February 2022

‘Any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Convention applies’ – Article 3(2) of the OECD Model Convention (OECD MC).
Developing a Regulatory Framework for the Taxation of Virtual Currencies
Authors: Bal Aleksandra
Published: February 2022

This article reviews virtual currency regulations in five selected countries (Australia, Germany, the Netherlands, the United States and the Unites Kingdom), develops a methodology for creating an effective regulatory framework for the taxation of virtual currencies, and makes recommendations for the improvement of certain characteristics of the existing income tax systems that currently struggle with the enforcement of tax compliance obligations regarding transactions in virtual currencies. The author advocates the use of legislation to clarify the fundamental aspects of virtual currency transactions together with more detailed non-binding interpretative guidance that can be quickly adapted to changing circumstances. Enforcement and monitoring measures by tax authorities should not target an infinitely large number of unidentified individuals but a much smaller number of operators providing exchange services and wallet providers. A third-party reporting regime for virtual currency intermediaries should be aligned with the existing reporting obligations for anti-money laundering purposes.
Case law note: The ECJ as a Protector of Tax Optimization via Holding Companies
Authors: Kuzniacki Blazej
Published: February 2022

This contribution discusses and analyses the saga of the ECJ case law in the Eqiom (C-6/16), Deister Holding/Juhler Holding (C-504/16 & C-613/16) and Hornbach-Baumarkt (C-382/16) cases. The article demonstrates that the Court is the protector of tax optimization via holding companies that are established within the EU/EEA. Although the analysed conclusions of the ECJ arise from the examination of the compatibility of domestic tax law of Member States in question (France and Germany) with EU primary and secondary law in force before 2016, their relevance goes a way beyond it, in particular to Article 6 of the ATAD and Article 7(1) of the MLI. Once again, the ECJ case law analysed here shows that fight against tax avoidance must not go beyond its objective. Ultimately, a tax system of the EU should be designed so that the prevention of tax avoidance (proportional anti-tax avoidance measures) should go hand-in-hand with maintaining an attractive business and investment climate (tax exemptions and intelligent incentives). This would significantly stimulate fair competition by creating a level playing field between different stakeholders (taxpayers and Member States).
Eu VAT Note: Online Platforms: A Marketplace for Tax Fraud?
Authors: van der Hel-van Dijk E.C.J.M.
Published: February 2022

The rapid acceleration of developments in the world of e-commerce raises the question as to whether tax risks are manifesting at the same pace. The authors conclude that the current legal EU measures appear to cover only some of these risks. Tax authorities will have to collaborate with online platforms to adequately address e-commerce tax risks, as online platforms play a crucial role in e-commerce and could (unintentionally) become a breeding ground for tax fraud if they do not actively step up as gatekeepers to combat tax non-compliance.
Spiritus Ex Machina: Addressing the Unique BEPS Issues of Autonomous Artificial Intelligence by Using Personality and Residence
Authors: Carvalho Lucas de Lima
Published: February 2022

This article challenges an assertion made by the Organization for Economic Cooperation and Development (OECD) in the Final Report of Action 1 of the BEPS Action Plan, as well as in subsequent reports and policy notes. While the OECD claims in those documents that the digital economy only ‘exacerbates’ BEPS issues, we argue that the digital economy may also create unique BEPS issues related to Autonomous Artificial Intelligence (AAI) (specifically, the unique issues of ‘disappearing income’ and ‘powerlessness to tax’). AAI is defined as an Artificially Intelligent system that (1) is capable of performing tasks commonly associated with human intelligence and beyond, (2) is not directly or indirectly controlled by human beings, and (3) has full managerial power over its own actions and resources, which may be contained, but not controlled by human beings or by entities (legal or otherwise) representing the interests of human beings. The article provides policy recommendations to address the BEPS issues related to AAI, as well as comments on their impacts for tax administration, for enforceability and for the broader structure of domestic and international tax law.
Debt Push-Downs in Times of BEPS Action 4 and the ATAD
Authors: Boulogne G.F.
Published: February 2022

Debt push-downs are a common feature of mergers & acquisitions transactions. This article will address a key concern raised by debt-push downs: the decrease in the target company’s taxable income (through the interest deduction) is often not paired with any increase in taxable income. Given this concern, this article will discuss the Dutch approach of discouraging debt push-downs, whereby a specific measure was abolished on 1 January 2019 in light of the implementation in Dutch law of the earnings stripping measure contained in the Anti-Tax Avoidance Directive (ATAD); a rule that reflects the BEPS Action 4 recommendations. This move, from specific to generic, raises more general questions: how do debt push-downs fit within the policy notions underlying BEPS Action 4? Does the new earnings-based approach take away the concerns raised by them? Does the ATAD require Member States to take action against debt push-downs? The article concludes with outlook on the ability of multinational corporations to push down debt in current times.
Flow-Through Holding Companies in Light of the Parent-Subsidiary Directive: The Thin Line between Tax Planning and Tax Abuse
Authors: Schade Filip , Melkonyan Satenik
Published: February 2022

The fight against aggressive tax planning has become a global priority in recent years. On the initiative of the OECD and, particularly, through implementations at the EU level, many loopholes have been closed. However, as the current developments in this field show, no politically acceptable level of taxation of multinationals is in sight. This article scrutinizes a tax structuring technique which can – even in the post-Base Erosion and Profit Shifting (BEPS) era – lead to unfavourable results from a fiscal perspective. First, the disputed tax planning scheme is described (section 2). In particular, the authors show that by using partially tax-exempt companies under Article 2(a)(iii) of the Parent-Subsidiary Directive as flowthrough holding companies, the general partner of the latter can achieve a fully tax-free repatriation of profits within the EU. Subsequently, the article addresses the question as to whether this result can be tackled by currently available legal anti-abuse means (section 3). The authors’ findings suggest that the taxpayer-friendly settled case law of the EU Court of Justice (ECJ) makes it almost impossible for current anti-abuse rules to cover this technique. Finally, the authors recommend that the personal scope of the Parent-Subsidiary Directive be limited, which should provide an effective solution for such structures, while also being suitable for political consensus among the Member States (section 4).
Country Note: Review of Implementation of the Inclusive Framework on Base Erosion and Profit Shifting in Indonesia
Authors: Rosdina Haula
Published: February 2022

Tax avoidance by multinational enterprises in Indonesia has led to a massive, ongoing loss of tax revenue. A type of tax avoidance known as base erosion and profit shifting (BEPS) has become a global issue and compelled the OECD to take measures by releasing the BEPS Action Plan and launching the BEPS Project. Indonesia declared its commitment to adopt appropriate parts of the outcome of the BEPS Project for developing countries in Indonesia’s domestic tax rules, recognized as the Inclusive Framework on BEPS or BEPS Minimum Standards. This article analyses the implementation of the BEPS Minimum Standards in Indonesia and how the government has taken action to counteract tax base erosion. The author considers qualitative research and data collected through a literature study and in-depth interviews. Indonesia is in the process of implementing the BEPS Minimum Standards, as addressing transfer pricing issues and preventing tax treaty abuse are currently particular areas of focus for the government.
Why Cant the Germans  ? English as Lingua Franca for Tax Treaties
Authors: Resch Richard Xenophon
Published: February 2022

This article is a reply to Martin Wichmann’s reply from a German perspective to John F. Avery Jones’s article ‘Why Can’t the English … ?’, both published in the Bulletin for International Taxation of the International Bureau of Fiscal Documentation (IBFD), 2019 (Volume 73), No. 6/7. It argues that Wichmann’s concerns against Avery Jones’s suggestion for English-speaking countries to follow the lead of non-English speaking countries in concluding tax treaties with an English prevailing text or only in English are unfounded, and that also the few remaining non- English speaking countries with a tendency not to conclude treaties with English prevailing texts should embrace the emerging global reality of English as lingua franca for tax treaties. The article is based on an analysis of 3,358 tax treaties currently in force or yet to come into force.
Tax in History: Hundred Years Tax Code in Germany
Authors: Drüen Klaus-Dieter
Published: February 2022

This year, the Reich Tax Code (RTC) celebrates its hundredth birthday. This codification was a milestone for tax law and tax jurisprudence in Germany. It was the prelude and basis for the unification and consolidation of the countless tax laws of the German States. The German Tax Code that, as a general law, forms tax procedure law and tax law of obligations as an overarching part of tax law, has been employed as a model and source of inspiration for some foreign tax procedure codes. This hundredth birthday is the occasion to trace its origin, its content, and its impact history as well as essential further developments. At the same time, an outlook will be dared on the future of procedural law in the international and European open tax State.
Challenges of Applying the Comparability Analysis in Curtailing Transfer Pricing: Evaluating the Suitability of Some Alternative Approaches in Africa
Authors: Oguttu Annet Wanyana
Published: February 2022

This article asserts that transfer pricing is perhaps the greatest profit shifting problem facing the international tax system. Thus, countries have historically been keen on preventing transfer pricing and on finding effective and efficient methods for allocating revenue that are administratively cost effective for both taxpayers and tax administrators. However, the problem as articulated in this article is that the comparability analysis that underpins the application of the arm’s length principle (ALP) which is applied internationally to curb transfer pricing, continues to be a vexing problem for developing countries due to various conceptual, policy, legislative, administrative and capacity challenges in finding comparable data. Acknowledging these problems, various international bodies have recommended alternative approaches that are considered simpler and less administratively burdensome, that developing countries may adopt in certain cases so as not to carry out a fully fledged comparability analysis. This article explains the operation of some of these alternative approaches and it evaluates the advantages and drawbacks of each of them. The article provides examples of some African countries that have adopted the alternative approaches and the positions of others that have not adopted these approaches. Recommendations are then provided as regards the competing policy options that countries have to consider when adopting the alternative approaches. It is hoped that the article will be found useful by African tax administrations and policy makers when they consider whether to adopt the alternative approaches.

Transfer pricing, comparability analysis, advance pricing agreements, safe harbours, arm’s length principle, low value-adding intra-group services, sixth method, multinational companies
Administrative Capability Analysis of OECD Proposals from the Perspective of Developing Countries
Authors: Castro Adriana Sánchez
Published: February 2022

On 13 February 2019, the OECD released the document ‘Addressing the Tax Challenges of the Digitalisation of the Economy Public Consultation Document’ and requested general and specific comments ranging from technical to policy aspects. Under the first pillar, the document revisited the profit allocation and nexus rules with primarily three different actions: the user participation proposal, the marketing intangibles proposal, and a proposal to update the standard of ‘physical presence’ with a ‘substantial economic presence’ concept. The second pillar, which is focused on the remaining base erosion and profit-shifting (BEPS) issues sets forth an income inclusion rule and rules for the taxation of tax eroding payments.

This article analyses these proposals from the perspective of developing countries including low income economies (LIEs), lower-middle income economies (LMIEs) and upper-middles income economies (UMIEs) as classified by the World Bank. Emphasis is given to the administrative capability issues that are present in all of them rather than fairness or efficiency parameters. The analysis suggests that both the value creation and the marketing intangibles proposals could not be easily administered in these developing countries nor are the proposals compatible with their legal systems.

The analysis developed in this article suggests that the preferable reform to tackle the remaining BEPS issues for developing countries is a tax on base eroding payments such as the global anti-base erosion proposal described in Pillar 2 of the consultation document that is similar to the base erosion anti-abuse tax (BEAT) recently enacted in the United States. However, this alternative minimum tax (AMT) should be paired with a significant economic presence (SEP) to tackle the challenges of the digitalization of the economy under Pillar 1.

Finally, a much simpler BEAT-like or AMT for developing countries is delineated further in the article if this option is to be administrable in jurisdictions with limited resources to enforce it.

international taxation, developing countries, global minimum tax, OECD, base erosion, profit shifting, digitalization, administrable, BEAT
Double Taxation Resulting from the ATAD: Is There Relief?
Authors: Soom Annika
Published: February 2022

Pursuant to the preamble of the Anti-Tax Avoidance Directive (ATAD), its primary purpose is to combat abusive practices in the EU and ensure that tax is paid where profits are generated without undermining the functioning of the internal market through double taxation (ATAD, recitals 1 and 5). Regardless of the aim of avoiding the creation of a double tax burden on taxpayers, the ATAD does not obligate Member States to effectively eliminate the aforesaid burden. It is, therefore, a taxpayer’s responsibility to identify the correct source of law for providing relief from double taxation.

This article focuses on the double taxation that is caused by the implementation of the ATAD and identifies the correct source of law, if possible, to provide relief for such double taxation. As the potential sources of law, the OECD MC (OECD Model Tax Convention on Income and on Capital 2017 (Full Version) (OECD Publishing 2019)), and European Union legislation have been analysed. The scope of this article is limited to the rule on interest deduction limitation and controlled foreign company (CFC) rules as provided in the ATAD.

ATAD, anti-tax avoidance directive, interest deduction limitation rule, CFC rules, double taxation, European Union, OECD, economic double taxation, juridical double taxation
The Vagueness of Tax Fairness: A Discursive Analysis of the Commission’s ‘Fair Tax Agenda’
Authors: Pirlot Alice
Published: February 2022

Unless treaties are read in very liberal terms, the European Union (EU) is not competent for defining the construct of a fair tax system and determining who should pay taxes and in which proportion within the EuropeanUnion.Yet, the European Commission has increasingly been using references to tax fairness in its tax policy discourse. This raises questions on the future of EU tax law, the commission’s role in responding to European citizens’ concerns, and achieving tax fairness.

By exploring six case studies, this contribution argues that the commission’s narrative on tax fairness remains vague and ambiguous which might indicate that it is not taking tax fairness – as a procedural and/or distributive issue – seriously. The commission uses fairness somewhat loosely to cover three main types of objectives including trade objectives that differ from what has traditionally been linked to tax fairness in the political philosophy literature. Building upon the work of legal scholars and economists, this article then concludes that the commission’s ‘fair tax’ agenda will, at best, achieve objectives in terms of procedural fairness.
International Corporate Tax Regime Post-BEPS: A Regulatory Perspective
Authors: Gadžo Stjepan , Jozipovic Šime
Published: February 2022

Among the other rationales underlying the existence of corporate income tax (CIT) as a standalone tax on the profits derived by legal entities, some scholars have underlined its regulatory function, i.e. its potential to steer the behaviour of private sector actors. In this regard, it has to be noted that significant constraints on the use of CIT as a regulatory tool have emerged in the aftermath of the base erosion and profit shifting (BEPS) project. One example may be found in the new ‘modified nexus approach’ with regard to tax incentives for R&D activities. This article takes a regulatory perspective regarding the recent attempts to overhaul the ‘international corporate tax regime’, resulting in the adoption of new hard- and soft-law rules. The regulatory perspective is understood here as the capacity of the rules of international tax law to affect the behaviour of both corporate taxpayers in arranging their cross-border activities and the States in designing their CIT systems. The BEPS initiative, being an unprecedented exercise in tax coordination aimed at widespread avoidance practices, serves as a prime example of how international tax law fulfils its regulatory function, by guiding the behaviour of both governments and taxpayers. Accordingly, the paper argues that the international corporate tax regime post-BEPS exhibits two sides of the same regulatory coin: on the one hand, taxpayers are disincentivized to resort to particular types of international tax planning; on the other, the incentives for individual States to engage in corporate tax competition are significantly reduced. It is further argued that the most far-reaching proposal in this area relates to ‘global minimum tax’, drawn under Pillar Two of the ‘BEPS 2.0’ initiative.

international tax law, tax competition, regulatory taxation, tax incentives, tax avoidance, BEPS, global minimum tax.
VAT Treatment of Cryptocurrency Intermediation Services
Authors: Ehrke-Rabel Tina , Zechner Lily
Published: February 2022

The bitcoin blockchain was construed as a self-regulating system that would eliminate financial institutions serving as trusted third parties. Instead however, various new intermediaries emerged carrying out economic activities related to the blockchain. The most common 'gateways' are cryptocurrency exchange platforms and wallet providers. Moreover, bitcoin's main purpose has shifted from means of payment to speculation. In this article, the authors assess how the mentioned gateways are to be treated for value added tax purposes and challenge the Hedqvist-decision of the European Court of Justice against the backdrop of how bitcoins are being used today.

Bitcoin, Ethereum, blockchain, cryptocurrency, token, exchange platform, wallet provider, intermediation, agent, undisclosed agent
The Digital Consumption Tax
Authors: Avi-Yonah Reuven , Fishbien Nir
Published: February 2022

Amid rising tension between the United States and France over the Digital Services Tax (DST), this article propositions the imposition of a Digital Consumption Tax, rather than the gross-receipts DST. The Digital Consumption Tax is not a new tax. It is a consumption tax (i.e. Value-Added Tax, or VAT, in Europe and sales tax in the United States) that is imposed on digital transactions. Such consumption tax would be applied on the seemingly free interaction between Facebook (and other companies alike) and its Users. This interaction, under which Users gain access to the Facebook platform for ‘free’ – should be treated as a barter exchange, where Users pay a deemed monthly subscription fee for the right to access the platform, and Facebook pays a deemed royalty-like payment to Users for the right to use data collected on them by such platform, and for the right to show targeted advisements on the platform. The main proposition of this article is that these deemed payments – the deemed subscription fee and the deemed royalty-like fee – are equal and offset each other, resulting in the current ‘free’ interactions that are taking place in the market. The immediate implications is that general principles of consumption tax that apply to barter exchanges should result in a ‘new’, uncollected, tax liability to Facebook, because the deemed subscription fee (as received by Facebook) should be subject to consumption tax (VAT or sales tax) in the country or state where service is consumed – where the individual User resides.

Consumption Tax, Value-Added Tax, Digital Service Tax, Facebook, France, United States, Sales Tax
The Use of Paragraphs 1.119 to 1.128 of the 2017 OECD Transfer Pricing Guidelines for the Application of Transfer Pricing Rules
Authors: Durán Rojo Luis , Nina Paul Nina
Published: February 2022

This article aims to analyse the paragraphs 1.119 to 1.128 of the 2017 OECD Transfer Pricing Guidelines and their relation to the comparability analysis, sham transactions and domestic anti-avoidance rules. For this purpose, the authors discuss the nature of the transfer pricing rules, the limits of the OECD transfer pricing guidelines to the application of transfer pricing rules and the main features of the comparability analysis, sham transactions and the anti-avoidance rules. It is concluded that part of these paragraphs contains recommendations that exceed the purpose of the transfer pricing rules when they are structured over the arm’s length principle.

OECD Transfer Pricing Guidelines, arm’s length principle, transfer pricing rules, comparability analysis, sham transactions, anti-avoidance rules.
Case Law Note: CJEU: Developments on VAT Exemptions in 2019
Authors: Yiallourou Kyriaki
Published: February 2022

This article presents a comprehensive overview of the recent case-law developments on value-added tax (hereinafter VAT) exemptions delivered by the Court of Justice in the European Union (hereinafter CJEU). During 2019, the CJEU was asked in a series of eight cases to interpret the exemptions established under Articles 132 and 135 of the VAT Directive. Three cases examine the VAT exemption on financial services whilst two cases address the immovable property exemption. The remaining cases inspect the VAT exemptions for the supply of medical care services, postal services, and the provision of services by autonomous groups of people to their members. This article summarizes the eight judgments rendered by the CJEU and analyses their potential impact on the European Union VAT framework.

VAT, VAT exemptions, CJEU, financial services, immovable property, merit exemptions, case-law.
COVID-19 and Fiscal Policies: Tax and Fiscal Policy in Response to the Coronavirus Crisis: Strengthening Confidence and Resilience
Authors: O’Reilly Pierce , Perret Sarah , Dender Kurt Van
Published: February 2022

The outbreak of COVID-19 has resulted in a health crisis and a severe decline in economic activity that are without precedent in recent history. This article first provides an overview of the tax and fiscal policy responses adopted in response to the health and economic shock caused by the COVID-19 pandemic. Countries have responded firmly, focussing on liquidity and household income support. Next, adopting a forward-looking perspective, the article discusses how tax policy could evolve, as containment measures are maintained and start being phased out. It suggests a strong need for continued support, adapting to the changing nature of risks, and for stimulus to encourage economic recovery once the crisis abates. Lastly, some options to restore public finances post-crisis are explored.

COVID-19, taxation, fiscal policy, liquidity, solvency, stimulus, fiscal consolidation.
COVID-19 and Fiscal Policies: Solidarity in the European Union in the Time of COVID-19: Paving the Way for a Genuine EU Tax?
Authors: Traversa Edoardo , Bizioli Gianluigi
Published: February 2022

A study of the European Union financing structure shows a disjunction between the EU taxing powers and the rules determining the resources funding the EU budget. Such a disconnection has deep historical roots, however, currently constitutes an obstacle towards the achievement of a sustainable Economic and Monetary Union. At the same time, the emergence of the solidarity principle in EU law is tangible proof that, in certain circumstances, the European Union also has as one of its objectives to grant financial assistance to Member States in distress. However, from a legal perspective, the current institutional framework needs reform in order to effectively serve this purpose, considering the magnitude of the economic consequences of the current pandemic. In this context, the debate on the adoption of truly European taxes must be relaunched.

EU budget, tax solidarity, EU taxes, EMU, fiscal policy, EU tax competences, COVID-19.
COVID-19 and Fiscal Policies: Unnecessary and Yet Harmful: Some Critical Remarks to the OECD Note on the Impact of the COVID-19 Crisis on Tax Treaties.
Authors: Moreno Andrés Báez
Published: February 2022

The COVID-19 pandemic has restricted freedom of movement and imposed forced, or at least unplanned, displacement. Insofar as the International Tax Regime continues to be based on the physical presence of individuals, this has led to unexpected and often undesirable tax consequences. The reaction of the OECD Secretariat to this situation has been to issue a note claiming, in essence, that everything remains the same. This article critically approaches that note by exposing its general methodological flaws and analysing each of the four specific aspects to which it refers: Permanent Establishments (PEs), Place of Effective Management (POEM), Cross-Border Workers and Residence of Individuals.

Double taxation conventions, COVID-19, residence, permanent establishment, agents, services-permanent establishment, place of effective management, cross-border workers, tie-breaker rules.
New Taxing Right in the Unified Approach: Old Wine in a New Bottle
Authors: Cai Qiang , Cerioni Luca , Li Xiaorong (Sharron)
Published: February 2022

The OECD’s ‘Unified Approach’ (UA) features new taxing rights allocated to market jurisdictions irrespective of the existence of physical presence. While this new taxing right is intended to address tax challenges of a new economic pattern, i.e. the digitalization of the economy, these authors note that similar challenges already existed even before the era of digitalization, particularly with respect to the attribution of profit to the dependent agent permanent establishment (DAPE). The authorized OECD approach (AOA), which hinges the profit attributable to a DAPE upon the significant people function performed by the dependent agent (DA), has been heavily criticized. In this regard, the UA provides a more reasonable and simplified solution: the source state is entitled to tax at least a portion of the residual profit made by the non-resident enterprise from the business undertaken in that state through the DAPE regardless of the extent of the functions performed by the DA enterprise. This approach has indeed already been implemented by certain countries in their domestic tax practice regarding the DAPE profit attribution, albeit couched in traditional transfer-pricing terms. At the same time, these domestic tax practice on the DAPE profit attribution may enlighten the improvement to the UA that has been criticized for its complexity and uncertainty.

Tax challenges of the digitalization of the economy, unified approach, new taxing right, dependent agent permanent establishment, profit attribution to a dependent agent permanent establishment, authorized OECD approach, benefit principle, destination-based transfer pricing methods
A General Income Inclusion Rule as a Tool for Improving the International Tax Regime – Challenges Arising from EU Primary Law
Authors: Schmidt Peter Koerver
Published: February 2022

The overall concept of the OECD’s Global Anti-Base Erosion Proposal is to develop a coordinated set of rules to address ongoing risks from profit shifting and to curb international tax competition. Two important components of the proposal are the income inclusion rule and the switch-over rule and, in this article, these components are examined in consideration of EU primary law. Depending on the final design of the rules, it is concluded that the proposed income inclusion rule – however, probably not the switch-over rule – may end up restricting the fundamental freedoms by treating comparable situations differently. Against that background, a number of policy options for designing the income inclusion rule in accordance with primary EU law requirements are presented, and pros and cons of these design options are discussed.

Global anti-base erosion proposal (GloBE), EU tax law, fundamental freedoms, tax avoidance, tax competition, tax policy
Tax In History: The Italian Statute of Taxpayers’ Rights: State of the Art 20 Years after Its Enactment
Authors: Sartori Nicola
Published: February 2022

The Italian Bill of Taxpayers’ Rights (so called Taxpayers Statute) is twenty years old. Even if it is formally a primary law, its provisions are deemed to be general principles of the Italian tax system that directly derive from the Constitution. This is why it is the most important set of Italian tax rules. The Statute not only recognizes the main taxpayers’ rights, but also provides guidance to both the legislature and tax authorities in tax matters. It dramatically changed the relationship between tax authorities and taxpayers.

During the twenty-year period since its enactment, the effectiveness of the statutory provisions has increased and changed. This is primarily because of the fundamental role of the Supreme Court, that has been a key player in the recognition of taxpayer rights and might also have a fundamental role in the future. The Taxpayers Statute and the literature encouraged the Supreme Court toward an innovative way of thinking and approaching tax cases by looking not only at taxpayer duties but also at their rights.

Italian Taxpayers Statute, constitutional tax principles, taxpayers’ rights, bona fide principle, ‘state of the reasons’ duty, provocatio ad opponendum doctrine, right to be heard, legitimate expectation doctrine, tax ruling, general anti avoidance rule.
What Should Be the Scope of the Beneficial Owner Concept?
Authors: Janssen Jeroen J.M. , Garibay Mónica Sada
Published: February 2022

In this article, the authors present their considerations regarding the differences between the OECD beneficial owner concept and the interpretation and use that the European Court of Justice has given to it in the so-called Danish Cases, including the recent European tendency to use it as an anti-abuse instrument. The authors analyse the implications of both approaches for recipients that are, for example, parties to (secured) financial transactions, limited recourse loans, or prescheduled repayment schemes in private equity structures. The authors conclude that a recipient can both be and not be the beneficial owner of an item of income depending on whether the OECD beneficial owner concept or the interpretation and use of the European Court of Justice are followed. In the view of the authors, the more ‘economic’ approach of the European Court of Justice in respect of the beneficial owner concept leads to legal uncertainty in bona fide transactions.

Beneficial owner, OECD, Danish cases, abuse, financial transactions, private equity, tax treaties, EU law, limited recourse loan, anti-avoidance
Skandia America and VAT Grouping in Spain
Authors: Llopis Estefanía López
Published: February 2022

For the first time since the publication of the Court of Justice of the European Union’s (CJEU’s) decision in Skandia America, a Spanish administrative authority has spoken out explicitly about the impact of such a judgment on Spain. With its resolution, the Spanish administrative authority reopened a closed debate when pointing out that it would be totally inadmissible to reject the application of the Skandia America case to the Spanish legal system only as a result of the particular manner that Article 11 of the VAT Directive has been implemented by the Spanish legislator. This article analyses the problems and doubts concerning the application of the Skandia America judgment to VAT groups constituted under the Spanish VAT Act. To do so, this article performs a three-step analysis. First, the arguments presented by the CJEU to justify its decision in such a judgment are reviewed. Secondly, the author provides a description of the VAT grouping scheme that is applicable in Spain. Finally, the attention is focused on the reasoning offered by the Spanish administrative authority in its resolution to support the fact that the Skandia America judgment is fully applicable to VAT groups located in Spain.

EU Law, VAT Directive, VAT grouping, branch, fixed establishment, head office, supply of services, single taxable person, intra-group transaction, principle of subsidiarity.
Revising the Fiscal and Social Security Landscape of International Teleworkers in the Digital Age
Authors: Niesten Hannelore
Published: February 2022

The challenges of digitalization – exacerbated by the COVID-19 crisis – provide an excellent case study in which the fiscal and social security landscape of international teleworkers can be subjected to a critical evaluation. This contribution discusses whether and how policymakers should consider adapting the longstanding tax and social security rules and principles for tele-employment to new working practices created by digital developments in a globalized economy. Various elements make the traditional assimilation of the source state to the (performance of) activity state no longer suitable to tackle the challenges in the digital economy. The special focus lies on a critical comprehensive, in-depth evaluation of the interpretation and application problems with regard to (1) the place of exercise of employment of international teleworkers for the allocation of taxing rights for employment income, (2) the creation of a permanent establishment for the employer by teleworking from home (i.e. home office) or contract conclusion in the homes of employees/agents, (3) the loss of personal and family tax benefits, and (4) the affiliated (dis)coordination between the tax allocation rules (double tax treaties) and the social security law rules (Regulation (EC) No 883/2004). These issues matter even more considering the tax implications and potential new burdens arising due to the economic effects of the COVID-19 pandemic crisis under which teleworking is – at least temporarily – the new normal. Suggestions are made regarding the tax jurisdiction over employment income of international teleworkers and effective coordination between fiscal and social security law.

Telework, digitalization, physical presence, discoordination between taxation, social security.