bluuebunny/crossref_metadata_2025 huggingface dataset:
Coordinating Tax Strategies at the EU Level as a Solution to the Economic and Financial Crisis
Authors: Pitrone Federica , Melis Giuseppe
Published: February 2022

The global economic and financial crisis that started in 2008 is strictly connected with national and European tax policies, concerning both the existence of specific elements of the tax systems that have contributed to the crisis and the role played by tax policies implemented by states in countering the crisis itself. This article provides an analysis of national and European tax policy strategies introduced during the crisis and points out the necessity of a tax coordination at the European Union (EU) level in order to increase fiscal integration among Member States while respecting national sovereignty and thus giving Member States the opportunity to adopt tax measures according to their needs and specificities.
Determinants of Effective Tax Rate: Evidence for USA and the EU
Authors: Martínez-Arias Antonio , Fernández Rodríguez Elena
Published: February 2022

This article carries out a comparative analysis of the tax burden borne by listed companies in the USA and the European Union (EU) and of the determinants of the Effective Tax Rate (ETR). A sample of companies was drawn up from the Datastream/Worldscope database over the period 1995-2007. By applying panel data estimation procedures, the main findings are, on the one hand, that ETRs are significantly lower for US firms than for European firms and that the tax burden is determined by both the actual characteristics of the individual firm and by the tax policies adopted by governments.
The (In)Consistency of the German Foreign Transaction Tax Act with European Law
Authors: Vogel Thorsten , Cortez Benjamin
Published: February 2022

The German Foreign Transaction Tax Act [FTTA; Außensteuergesetz (AStG)] has, in recent history, been the subject of criticism concerning its consistency with European law. The legislator has reacted to this criticism and adapted the FTTA to be in accordance with the requirements set forth by the European Court of Justice (ECJ) and European law. Despite the actions taken by the German legislator, doubts remain whether the FTTA fulfils the requirements of European law. This article, therefore, analyses the provisions of the FTTA in regard to their consistency with the basic European freedoms.
Employer Tax Implications of Inbound Assignments to Germany  A Wage Tax Driven Overview on Domestic German and Double Tax Treaty Regulations
Authors: Hilbert Lukas
Published: February 2022

The application of a withholding tax regime on employment income is common in many countries but continues to create difficulties for employers, especially in the course of international assignments. An analysis of the German wage system tax may reveal the critical points on which decisions are necessary when developing a regime. This article provides a wage tax driven overview on the domestic and double taxation treaty regulations as applied in Germany, summaries of current discussions in tax literature and the German authorities' as well as the federal tax court's view on several critical issues.
Update on the Dutch Fund for Joint Account (closed FGR): Asset Pooling Vehicle for International Investors and Pension Funds
Authors: Beudeker Michiel
Published: February 2022

The Dutch fund for joint account being transparent from a Dutch tax perspect ive (besloten Fonds voor Gemene Rekening (hereinafter 'closed FGR') is a well-established and flexible international asset pooling vehicle for domestic and international investors and pension funds. The attractiveness of the closed FGR as international asset pooling vehicle has been further increased over the last months as the Dutch authorities concluded mutual agreements on its tax transparency with various tax treaty partners and also indicated in their recently updated Policy Note on the Dutch Tax Treaty Policy that they intend to conclude many more similar mutual agreements. Although the closed FGR may already be considered transparent from a foreign tax perspective, confirmation of such classification by means of a mutual agreement provides more certainty. Pursuant to its tax transparency, for purposes of application of the respective tax treaties, all income and gains from the closed FGR's underlying assets are thus allocated to its investors in proportion to their participations in the closed FGR and tax neutrality is achieved. By concluding these agreements, and as the closed FGR may be categorized as a collective investment vehicle (CIV), the policy of the Dutch authorities is in line with the views of the Organization for Economic Co-operation and Development (OECD) expressed in the 2010 Report on the Granting of Treaty Benefits with Respect to the Income of CIVs, which gave rise to amendments in the recently updated Commentary to Article 1 of the 2010 OECD Model Convention. In this article, the author addresses (1) the main characteristics of the FGR, (2) the international tax aspects of the closed FGR, (3) the content of the abovementioned mutual agreements, (4) the views expressed by the Dutch authorities in the updated Policy Note on the Dutch Tax Treaty Policy, and (5) the aforementioned points in relation to the recent OECD developments on CIVs. Furthermore, although the developments initiated by the Dutch authorities are very helpful and promising, the author provides recommendations to further support the closed FGR as international asset pooling vehicle.
Exit Taxes on Companies in the Context of the EU Internal Market
Authors: Zernova Daria
Published: February 2022

In Daily Mail, the Court of Justice (CJ) ruled that the freedom of establishment did not confer on companies the right to leave jurisdiction of a Member State (MS). Ever since, exit taxation of companies has been an area full of obscurities and unknowns. Among them are: restrictive effect of non-harmonized connecting factors; an appropriate comparability standard; the absence of comparability as a ground of breach versus applying the fiscal territoriality principle at the level of justification; and criteria for an internally coherent system of exit taxation rules. Discussion of the mentioned issues aims at defining how far EU law can affect national provisions on exit taxation. In particular, the developments that the CJ case law has undergone over a past decade induce to make an abrupt conclusion: double taxation in an exit taxation case can be a fault of an MS, if viewed from the internal market perspective.
New Tax Rules on Cross-Border Mergers and Demergers in Norway and Their Compatibility with the EEA Agreement
Authors: Scapa Passalacqua Anna B.
Published: February 2022

In this article the author provides an overview of the new Norwegian tax rules for cross-border restructurings and comments on the compatibility of the new rules with the fundamental freedoms in the agreement of the European Economic Area.

It is submitted that certain aspects of the new rules may create an unjustified restriction on the right of establishment and the free movement of capital. In particular this may apply to the exclusion of triangular mergers and demergers from the scope of application of the new rules, the termination of the right to utilize previous tax losses after the merger or demerger (in certain situations), the tax treatment applicable to inventory and intangibles taken out of the Norwegian tax jurisdiction and the introduction of the wholly artificial requirement as a measure to prevent tax abuse for cross-border mergers and demergers.
Visiting Academics in Double Tax Treaties
Authors: Csoklich Peter N.
Published: February 2022

Professors, researchers, lecturers and teachers have become more and more mobile and active throughout the world. Although science itself is borderless, visiting academics are forced to cross-national borders. As a consequence, among other issues, tax problems may arise. This article is devoted to issues concerning the taxation of visiting academics. First, it will analyse how OECD Model deals with the taxation of academics who teach and do research around the globe. Then, it will examine the specific clauses on visiting academics provided for in many tax treaties worldwide and will discuss the tax consequences of these clauses. The aim of the authors is to contribute to a better understanding of the international tax implications of temporary cross-border teaching or research activities by academics.
Internal and External Neutrality: On the Significance of the Allocation of the Powers of Taxation on the Choice between a Permanent Establishment and a Subsidiary in Relation to the Danish Territorial
Authors: Ronfeldt Thomas
Published: February 2022

This article analyses the principle of neutrality in establishment law, particularly in connection with the allocation of the powers of taxation. A provision - section 8(2) - has been inserted into the Danish Act on Corporation Tax that provides neutrality in the choice between a subsidiary and a permanent establishment abroad. The provision was inserted in order to secure equal tax treatment of groups with joint taxation, but the rule would appear to present a series of problems in Community law in that situations that are not analogous are treated alike, which is contrary to the basic principle of establishment law unless justified in an overriding public interest. With the decision in Case C-337/08, this would appear not to be the case, and this article argues that internal and external situations should not be assessed according to identical definitions of neutrality.
Advance Pricing Arrangement Reform in Australia: Was It Worth the Wait?
Authors: Markham Michelle
Published: February 2022

In June 2007, the Australian Taxation Office (ATO) announced that it had tendered for an independent review to evaluate the role and performance of its Advance Pricing Arrangement (APA) Program. Following the submission of the Review Report in 2008, the ATO took steps to co-design, together with industry representatives, a more efficient and effective system that would satisfy the needs of both internal and external stakeholders and be sustainable in the long term. The revitalized APA Program was finally introduced in March 2011.

This article will discuss and analyse the efficacy of the changes brought about by the new Program.
Exclusive Patents and Trademarks and Subsequent Uneasy Transaction Comparability: Some Transfer Pricing Implications
Authors: Visconti Roberto Moro
Published: February 2022

Intangible assets are intrinsically difficult to evaluate and compare; due to their immaterial nature, they are frequently negotiated within multinational groups and thus become sensitive to transfer pricing issues. OECD guidelines address the complex problem of trying to adapt standard transfer pricing methods to specific circumstances. Arm's length comparisons are particularly problematic for exclusive and specific patents and trademarks and also as a consequence of the intrinsic confidentiality that concerns their transactions.
Hybrid Entities Why Not Tax Pass-throughs as Corporations?
Authors: Rosembuj Tulio
Published: February 2022

It doesn't make sense to allow certain taxpayers to choose whether they are a corporation or not. The US check-the-box rules, since 1997, have produced a boost to international tax arbitrage. The hybrid entities are the result of the discordances between different jurisdictions, qualifying them at the same time as corporation or pass-through. The misuse of hybrid entities offered a powerful tool for tax minimization on local and foreign earnings. It is not by chance that the financial sector took clear advantages through the special purpose vehicles, structured arrangements, loan and credit transactions and parking of assets for tax purposes. The hybrid entities or reversal hybrid entities meant an incentive for aggressive tax planning. The right solution should be the taxation of pass-through entities as corporations: the partnership income and the attribution income to the partners.
Tax Aspects of Luxembourg Specialized Investment Funds
Authors: van Kuijk Frank , Lambion Michel , Peetermans Marie-Aline , Hendessy Marie-Aleth
Published: February 2022

Luxembourg is one of the world's main investment management centres. Luxembourg provides for a lightly regulated and tax efficient fund regime for well-informed investors, known as the Specialised Investment Fund regime. This article focuses on the Luxembourg and certain international tax aspects of this regime but starts with a high level outline of its regulatory and corporate aspects.
Bank Taxes in Forms and Sizes: EC Opts for FTT
Authors: Kavelaars Peter
Published: February 2022

Right now the implementation of some type of bank tax is a hot topic in the European Union, while globally the G 20 has shown a particular interest in this relatively new type of tax. The economic - mostly financial - crisis plays a major role in this development. This article will first discuss the general background of how a bank tax may be realized. Next, the draft Directive of the European Commission (EC) on implementing a type of bank tax, that is, a Financial Transaction Tax (FTT) will be considered.
Insourcing and Outsourcing in a VAT Context
Authors: Eskildsen Casper Bjerregaard
Published: February 2022

In recent years the choice between insourcing and outsourcing has been the subject of increased interest among economic operators. The continuous search for cost reductions, and the maintenance of competitiveness have entailed that both national and international undertakings must regularly consider the optimal mix of in-house production and external production. However, such considerations may not be based only on operational considerations, as the choice can have significant VAT implications. From this perspective, it is highly relevant to examine the VAT consequences of insourcing and outsourcing in the EU VAT system.
Exchange of Tax-Related Information by Brazil
Authors: Rocha Sergio André
Published: February 2022

This article deals with exchange of tax information by Brazil. It starts by analyzing Brazil's domestic regulations regarding secrecy of tax information and moves on to examine how Article 26 of the OCDE Model Convention appears in Brazilian treaties. Finally, we comment on the report on Brazil issued by the Global Forum on Transparency and Exchange of Information for Tax Purposes, highlighting its main remarks and conclusions.
Luxembourg Moves Up among the Leading Jurisdictions Holding Russian Investments
Authors: van Kuijk Frank , Housz Diederik Ingen
Published: February 2022

On 21 November 2011, Luxembourg and the Russian Federation signed a new protocol to the existing tax treaty of 28 June 1993. This article analyses and comments on the main changes introduced by the different provisions of this new protocol, comparing them where relevant with the new protocol concluded to the tax treaty between the Russian Federation and Cyprus and the tax treaty and protocol thereto concluded between the Russian Federation and the Netherlands.
Cross-Border Charitable and Other Pro Bono Contributions: The Situation in Europe and the US
Authors: Jochum Heike
Published: February 2022

The number and relevance of non-profit organizations (NPO) are growing significantly. This is true for many European Member States as well as for the US. With regard to their activities, an increasing number of cross-border situations arise. Income is generated in different countries by fundraising or by pursuing economic aims. Likewise, income is spent in several countries to support public benefit. As many countries grant tax privileges to NPO and tax incentives to donors, the question of the way in which income of non-resident NPO should be taxed has to be answered. In addition, the tax deductibility of contributions to such foreign NPO has to be discussed. The annual congress of the International Fiscal Association (IFA) 2012 in Boston presented a suspenseful seminar on this topic offering the opportunity for intensive debates.1 This article compares the basics of the tax treatment of NPO in Europe and the US in due consideration of these discussions as well as of the lessons learned by the research project recently completed by the European Association of Tax Law Professors (EATLP).
Real-World ACE Reforms and the Italian Experience. Towards a General Trend?
Authors: Petroni Carlo , Massimi Francesco
Published: February 2022

In this article, the authors analyze the allowances for corporate capital equity ('ACE') currently adopted in some countries. In the economic literature ACE properties are well known: ACE makes corporation income tax systems neutral with respect to the financing options of firms, since this incentive addresses the tax-induced debt bias by granting an allowance for the cost of equity, normally consisting in the notional return on equity invested by firms. In the last two decades some European countries implemented ACE-like measures, but abolished them after a few years, that is, Italy (with DIT legislation, in force from 1997 to 2003), Croatia and Austria. The authors compare, from a corporation tax law perspective, the existing ACE legislations (Belgium, Brazil, Latvia, Portugal, Leichtenstein) with the new Italian ACE regime (introduced in 2011). Finally, the analysis shows common features and drawbacks of these incentives as well as the perspectives of enacting an EU-wide ACE legislation.
The Revised UCITS Directive (UCITS IV): A Missed Chance for Creating Common Rules on the Taxation of UCITS
Authors: Adema Raymond P.C.
Published: February 2022

The taxation of domestic and foreign Undertaking for Collective Investment in Transferable Securities (UCITS) in the Member States differs substantially. These differences in taxation distort the competition between UCITS. The aim of the UCITS Directive therefore could not be fully realized. In this contribution, the desirability of common (harmonized) European Union (EU) rules is reviewed. According to the author, the Member States can eventually not escape from including a chapter on the taxation of UCITS in the Directive, unless they settle for the current incomplete market in UCITS.
Is the EU Harmonization of Excise Taxes on Tobacco Products a Barrier to Health Promotion?
Authors: Thygesen Jette
Published: February 2022

There is worldwide agreement that tobacco use causes health problems and must be fought. At European Union (EU) level there is general agreement that the harmful effects of tobacco use should be tackled through legislative action. The question is, what legislative measures are required to reduce tobacco consumption?

Since the first cigarette was introduced to the market in London in 1861, tobacco and tobacco products have become subject to extensive regulation and heavy taxation. The introduction of excise taxes was a milestone in this area. While the main objective of the first excise taxes on tobacco was fiscal, their function has changed over the years, and today they are also a tool of public health and social policies.

This situation gives rise to at least three questions. First, what are the most appropriate forms of taxation, especially in the context of the European single market? Second, can health objectives be achieved through tax policy, and should the EU allow price controls in this area?

The EU has gone through a more than thirty-year long process of trying to harmonize tobacco excise taxes within the framework of the internal market, in order to establish the most appropriate taxation. The goal of this process was to harmonize the structure of taxation and tax rates. However, due to national traditions and longstanding historical differences in national tax systems, the EU has failed to impose total harmonization in this area but it has taken steps towards the harmonization of both the tax structure and tax rates.

This article analyses the options for introducing measures designed to reduce the consumption of tobacco within the framework of Union law, without problems arising in relation to the structure of Directive 95/59/EC on taxes other than turnover taxes which affect the consumption of manufactured tobacco. This analysis is based on the Irish, French and Austrian rules for setting the retail prices of tobacco products. The article will specifically focus on minimum prices versus taxes as possible instruments in the fight to reduce consumption.
Enhanced Relationship Challenging the Swedish Model
Authors: Påhlsson Robert
Published: February 2022

The article investigates the legal conditions for the enhanced relationship project recently introduced by the Swedish Tax Agency. It is concluded that the current project has insufficient support in the legislation that establishes the Swedish public-sector model.
Taxation of Foreign Institutional Investors in India: The Hanging Fire
Authors: Jaiswal Anindita
Published: February 2022

Foreign Institutional Investors (FIIs) have always remained influential players in India's investment market. However, India's tax regime in respect of FIIs has constantly undergone turbulent phases. To start with, the controversy pertained to classification of FII income under the income heads of business income versus capital gains, which classification was critical considering its tax chargeability and tax rate implications under India's direct tax laws. While this debate appears to have been put at rest by the 2008 ruling in LG Asian Plus Ltd. v. ACIT, uncertainties for FIIs in the context of non-resident taxation in India followed.

The first limb of this uncertainty is found in the proposed General Anti-Avoidance Rules (GAAR) which seeks to implement the 'commercial substance' test if the Indian tax authorities believe that the transaction was undertaken only to avoid taxes or lacked commercial substance. This is proposed to apply notwithstanding that the transaction was routed through a tax friendly jurisdiction, and as per India's tax treaty with such jurisdiction, no tax liability arises in India.

While effectuating of GAAR has been pushed back to 2016, the retrospective amendments of 2012 undertaken in India's Income Tax Act, 1961, pursuant to the Vodafone ruling by India's apex court, has brought FII taxation under radar. The amendment, which adopted the 'look through' approach against the 'look at' approach, may expose investors/P-Note Holders behind the FIIs to taxation in India, notwithstanding that the FII may be located in jurisdiction like Mauritius, with whom India has a favourable tax treaty. Also, as no time limit is prescribed for retrospective application of the amendment, the whip will keep hanging on FII investments time immemorial.

Expert committees have been set up to scrutinize and settle these tax controversies and to create conducive tax environment for foreign investors in India, which is of utmost significance both, from an investment and economic standpoint. However, with the foregoing retrospective amendment in effect, it is to be seen how Indian authorities pacify FIIs from drawing out their investments from India amidst the tax qualms and mitigate the uncertainties and associated risks.

This article discusses India's FII tax regime in light of the foregoing controversies, the prevailing uncertainties and challenges, their impact on FII investments in India, and India's consequent exposure to potential actions under bilateral investment treaties.
National Tax Law - Under Influence of EU Rules for Freedom of Movement of Goods
Authors: Thygesen Jette
Published: February 2022

This article deals with the European Union (EU) law issues that an EU Member State must be aware of when introducing national taxes.

In principle, fiscal powers lie with the individual EU Member States, but membership of the EU involves obligations to comply with a number of rules. The EU framework for drawing up and implementing tax legislation is defined in the Treaty on the functioning of the European Union (TFEU), secondary EU law, the case law of the Court of Justice of the European Union (ECJ) and the European Commission's implementing decisions. The focus of this article is in an analysis of the EU rules which Member States must comply with when introducing a tax or charge. At the same time, the article will briefly illustrate the possibilities for obtaining approval of tax arrangements that clearly constitute a State aid scheme. The provisions in the TFEU that are relevant in this connection are Article 30 and Articles 34-36, on the free movement of goods, Article 107 on State aid, and Article 110 on fiscal provisions.
The Lawfulness of the Restriction of Losses - On the European Union (EU) Law Impact on the Deduction of Losses Incurred Abroad
Authors: Ronfeldt Thomas
Published: February 2022

In view of case law from Danish courts, the article will analyse whether provisions, such as the previously existing Danish provision in section 5 G of the Danish Tax Assessment Act, are inconsistent with the freedoms in EU law, which grant the right to free establishment within the borders of the EU. The article will illustrate the problem via a Danish High Court decision, SKM 2011.486 ØL, where the High Court held that the Danish provision was not inconsistent with community law, as it merely eliminates the risk of double dip, which, according to the High Court, is in compliance with existing EU law. Taking as its starting point the Danish decision, which will be reproduced in detail herein, the article will analyse the basis in EU law for deducting losses incurred abroad. The article uses the Danish provision as a platform for analysing the claims of EU law.
Operating Base and Taxation for Foreign Airline Companies Operating in Italy
Authors: Mattia Salvatore , Rizzardi Raffaele
Published: February 2022

Article 38 of the so-called Development Decree provided a definition for 'operating base' for airline companies operating in the passenger traffic sector by means of an operating bases system.

The said provision aims to prevent controversies that had already arisen in the past with airline companies, which adopted the above business model, assimilating operating bases equipped with infrastructures and service staff to a permanent establishment and, therefore, compelling the said companies to comply with national tax and social security rules and regulations.
The Concept of Associated Enterprises
Authors: Dwarkasing Ramon S.J.
Published: February 2022

The concept of Associated Enterprises is essential for the application of the arm's length principle, which is the internationally recognized tax standard for transfer pricing. The arm's length principle is the underlying principle of Article 9 of the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention (OECD Model) and of transfer pricing laws of many countries. Virtually all tax treaties are based on the arm's length principle. As stated by Article 9 OECD Model, the arm's length principle is applied to Associated Enterprises. The concept of Associated Enterprises consists of three elements: participation in management, control and capital. Despite the importance of the notion of Associated Enterprises, there is a lack of clarity on its meaning, in particular concerning the term 'control'. This study provides an in-depth analysis of the concept of Associated Enterprises in Article 9 OECD Model.
Agency Permanent Establishment Brazilian Style: Taxation of Profits Earned Through Commission Merchants, Agents and Representatives
Authors: Rocha Sergio André
Published: February 2022

This article explores the treatment of agency permanent establishments in Brazilian tax regulations. Brazil's legislation does not have general permanent establishment rules. However, it deals with certain types of agency PEs. After analyzing domestic regulations we have also explored the limited case law there is in Brazil about this topic. The last section of the article is dedicated to the interaction between Brazil's domestic rules and the double tax conventions signed by the country.
The EU Integration Process and Direct Taxation from a Southeast European Perspective: Part II Impact of Accession Negotiations on Direct Taxation in Acceding Countries
Authors: Popovic Dejan , Kostic Svetislav V.
Published: February 2022

Bearing in mind the very limited scope of the acquis which is supposed to be implemented within the Stabilization and Association Agreement framework, the second part of this article is dedicated to analysing the impact of the accession negotiations on direct taxation in the Southeast European countries.

Although the closing of the tax chapter during the accession negotiations with a particular acceding country should imply the required full alignment of its direct tax legislation with the acquis, the reality in numerous cases in the previous enlargement processes is far from the expected. In the area of European Union (EU) secondary tax legislation analysis has shown that the accession procedure will, in most cases, ensure the timely and full compliance of an acceding country with its requirements. However, the alignment of acceding countries legislation with the part of EU direct tax law stemming from the negative integration processes is much more demanding. In essence, there can be no absolute certainty that every provision of an acceding country's direct tax legislation has been placed under sufficient scrutiny during the tax chapter negotiations process and that its required full alignment with the case law of the European Court of Justice (ECJ) has been ensured.

The authors conclude with an observation that the various approaches applied to different countries which have attempted or are attempting to become EU Member States within the accession process, beg the question of the objectivity of the process and how important is the role of political influences and interests on the success of a particular country in joining the EU.
The Impact of the Principle of Non-Taxation on the Tax Claim
Authors: Ronfeldt Thomas
Published: February 2022

Based on the concept of risk associated with a position in Danish civil law, the article will introduce risk associated with a position in tax law in order to determine whether a taxpayer, at the time when a legal decision is made, can demand that his position be redressed. This is pivotal in connection with decisions in cases where the taxpayer believes to have had a right to make certain arrangements under tax law, and the tax authorities change and reverse this decision from the part of the taxpayer. In certain cases, the taxpayer is forced to choose between two positions. First, the taxpayer can genuflect to the tax authorities' view and remain passive. Second, he can choose to believe in his right and conduct a case pursuant to the choice made. At this point, risk associated with a position in tax law is of vital importance to the taxpayer, seeing as the chances of redress under the tax law are greater if he undertakes risk associated with a position than if he chooses not to. The article will take as its starting point Danish principles concerning risk associated with a position and, on this basis, analyse whether such a principle is in compliance with a potential principle of non-action in EU law.
Treaty Eligibility from a German Perspective: Status Quo, Trends and Perspectives
Authors: Haase Florian
Published: February 2022

The question of whether or not a taxpayer qualifies as a 'Resident of a Contracting State' within the meaning of Article 4 paragraph 1 OECD-Model Convention goes to the very heart of the application of a double tax treaty. During the past decades, German tax courts, scholars and practitioners alike have approached this topic from many different perspectives and angles. Although there seems to be some common understanding of the requirements and consequences of the treaty entitlement status, the German international tax practice reveals that it is far from being sufficiently investigated. This is not only due to questions and problems that arise in the national tax law of Contracting States for the first time, but also because traditional legal institutes and classical problems are re-assessed and treated differently over time, which is particularly true for the treatment of partnerships. This article explains the relevant issues and hot topics alongside the German point of view only, but may be of broader interest to international readers.
Classification of Cost Allocation Agreements
Authors: Stradinger Theresa
Published: February 2022

Cost Allocation Agreements have begun to play an important role for MNEs in order to make intellectual property available to foreign subsidiaries. Cost Allocation Arrangements based on the pool-concept are a form of allocation financing. In the international context, different wordings for Cost Allocation Agreements (e.g., Cost Sharing Arrangements) are used. This paper is concerned with Cost Allocation Agreements in the area of R&D, which are based on the pool-concept. Cost Allocation Agreements are not based on specific national or international legal basis, but are the result of national transfer pricing guidelines and the OECD TPG. Due to the missing special provision and binding source of law of Cost Allocation Arrangements in Austria, this paper analyses Cost Allocation Arrangements in the field of R&D and its special questions by interpreting the regulations of civil law, tax law and treaty law and with it the arm's-length principle.
Cross-Border Fiscal Unities and Tax Treaties: Nothing New under the Sun?
Authors: Dijkstra Wiebe E.J. , Pötgens Frank P.G.
Published: February 2022

The application of tax treaties to fiscal unities has caused quite some discussion in Dutch tax literature in the past, given the route the Dutch Supreme Court had chosen to follow could result in imbalances. This article analyses the relationship between the Dutch Supreme Court case of 3 February 2012, No. 10/05383, BNB 2012/126 - concerning a cross-border fiscal unity for Dutch corporate income tax purposes having a dual resident parent company with its place of effective management in Belgium - and earlier case law on cross-border fiscal unities. The authors examine the fundamental questions on tax treaty application and interpretation raised by these cases, particularly as regards the residence of consolidated group companies for tax treaty purposes .
The Combined Application of the Fundamental Freedoms and the EU State aid Rules: In Search of a Way Out of the Maze
Authors: Staes Mélanie
Published: February 2022

With this article, the author aims at investigating the possible combined application of the fundamental freedoms and the EU State aid rules. The author takes as a concrete example two regional Belgian tax measures, namely the Flemish winwinloan-regime and the Walloon CIW-regime.

First, some general issues regarding fiscal State aid are considered, in order to provide the reader with the background necessary to understand the reasoning in the following sections of the article. Next, the author investigates the Belgian regional tax regimes on their compatibility with EU law. In a last and main part, the combined application of the fundamental freedoms and the EU State aid rules and its consequences are considered.
Arbitration under International Social Security Instruments
Authors: Spiegel Bernhard , Pöltl Manfred
Published: February 2022

In the EU binding EU provisions contain a comprehensive coordination of the different schemes of the Member States. These provisions also include dispute settlement rules. The competent institutions and authorities have to cooperate to resolve all disputes. If this does not lead to a solution the Administrative Commission, an EU body in which all Member States and the European Commission are represented, can decide on the issue (which does not include the possibility of enforcement of that decision). In a last step it is up to the courts to decide. These procedures are not perfect - an equality of arms between the different bodies involved is not yet guaranteed.
Formula Based Transfer Pricing
Authors: Brauner Yariv
Published: February 2022

The article discusses the choice between the current arm's length based transfer pricing regime and a formula-based transfer pricing regime. It argues that a reform of our transfer pricing rules is imminent, even if it is not part of a comprehensive reform of the international tax regime (a necessary yet a more complex goal to meet). The article demonstrates that many of the objections to a formula-based transfer pricing reform may be valid in the context of the more comprehensive reform of the business income tax rules, but not, or to a lesser extent, in the context of the narrower transfer pricing reform. It concludes therefore that much of the objection to formulary apportionment becomes irrelevant in a narrower scoped reform, and that the ground is ripe for it.
Germanys Statutory Treatment of Special Payments in Transnational Cases
Authors: Sauer Christian , Heurung Rainer , Bresgen Ariane
Published: February 2022

In the field of business taxation, the German and Austrian concepts of co-entrepreneurship (Mitunternehmerschaft) take special positions. Following these concepts, partnership profits are attributed to partner shares and, accordingly, the partners are taxed independently under the transparency or pass-through principle (Transparenzprinzip) based on their respective shares and the special payments they receive from the partnership. Special payments (Sondervergütungen), for instance, interest on a loan granted to the partnership by a partner, are treated as income from commercial business according to domestic law. Therefore, section 50d, paragraph 10, of the Income Tax Act (Einkommensteuergesetz [EStG]) determines that the special payments are treated as a business profit for treaty purposes. As a result, Germany waives the right to tax the partner as a German permanent establishment (PE). In transnational arrangements, the unique German system often results in conflicts of qualification. On this account, our paper points out the consequences resulting from the treatment of special payments. Based on case studies with inbound and outbound investments, we outline the current status of the German treatment of special payments in transnational dealings and summarize future prospects.
Tax Treaty Override: A Jurisdictional Approach
Authors: Schoueri Luis Eduardo
Published: February 2022

Despite the recent developments grounded on constitutional arguments, the current country-by-country approaches to treaty override still fail to qualify the overriding as an unacceptable attempt to extend taxation beyond the limits agreed with treaty partners. Accordingly, treaty override has been seen as a problem the solution of which would depend on each country's view on the role of international law. This article suggests that such failure is due to limitations inherent to this misleading reasoning with respect to the relation between domestic legislation and international law. After describing the main approaches to treaty override, the author proposes that treaty override must be addressed as an issue of jurisdiction, instead of a matter of hierarchy. The proposed approach is consistent with the actual purpose of double tax conventions and with the need to preserve the jurisdictional limitations agreed under tax treaties.
A Normative Evaluation of Tax Law Enforcement: Legislative and Political Responses to Tax Avoidance and Evasion
Authors: Van Brederode Robert F.
Published: February 2022

The premise of this article is that there exist equilibrium between the fairness of a tax and the moral obligation to pay. In the context of tax avoidance, the question arises how much tax should be considered to constitute a fair share for an individual person or corporation. Current doctrine seems to accept that the law provides a bandwidth for fair share, and tax reduction planning within the bandwidth is acceptable. The scope of the obligation to pay fair taxes, and the moral legitimacy of enforcement methodology used by tax authorities in coercing compliance with tax laws also constitute a moral or normative equilibrium: the wider the scope of the obligation to pay, the further the reach of tax law enforcement; and, the narrower the scope of the obligation to pay, the shorter the reach of tax law enforcement. Tax law enforcement requires a degree of proportionality. Proportionality in this context means a cost/benefit analysis of any enforcement measure, including the impact of enforcement measures on bona fide taxpayers. On the basis of the normative standards developed in the first part of this article, three more recent developments in the area of tax law enforcement will be evaluated, namely the OECD fight against tax havens; the US Foreign Account Tax Compliance Act (FATCA); and the practice of public shaming in the UK.
BEPS: The Issues of Dispute Resolution and Introduction of a Multilateral Treaty
Authors: Malherbe Jacques
Published: February 2022

Any new international rule is liable to engender new disputes between States and/or States and citizens. Where a number of countries are concerned, dispute resolution is facilitated if mechanisms are provided in a multilateral treaty. So, why not embody the substantive rules themselves in such an instrument? There is a certain logic to dealing with these two problems simultaneously, insofar as they are raised by the Organization for Economic Cooperation and Development (OECD's) Base erosion and profit shifting (BEPS) Action Plan.
The 2014 Update to the OECD Commentary: A Targeted Hybrid Approach to Beneficial Ownership
Authors: Wardzynski Adrian
Published: February 2022

'This article argues that application of beneficial ownership test in Articles 10 to 12 of the OECD Model Convention is not a straightforward question of legal or economic approach. Rather, it is a matter of balance between the two that simultaneously ensures legal certainty and does not countenance blatant treaty shopping. Accordingly, the article first explores the legal basis and main drawbacks of the two approaches when applied irrespective of one another. Basing on this analysis, the author advocates a targeted hybrid approach which is to be regulated by the relative abusiveness of the tax structure in question. The hybridity is manifested through the reliance on the economic approach as an exception to the legal approach in egregious cases, i.e., targeted cases. It is submitted that the relevant threshold of abuse can be determined on the basis of the 2014 update to the OECD Commentary on beneficial ownership. This conceptualization cuts through the ostensible inconsistencies of the contemporary jurisprudence and reveals the implicit public rationale guiding actions of tax authorities and court decisions'.
Andorra: Exchange of Information and New Tax System in the Context of the OECDs and EUs Initiatives
Authors: Vega Alberto
Published: February 2022

Andorra, a microstate located in the Pyrenees, between France and Spain, used to be characterized by strict bank secrecy and the absence of direct taxes on income. However, given the pressure exerted by the European Union and, especially, by the OECD, Andorra finally committed in 2009 to exchanging tax information upon request according to the OECD standards. Since then, Andorra has introduced important legal reforms following these standards, in a process which is still evolving and which may even lead to automatic exchange of information in the near future. Moreover, as a result of the crisis suffered in recent years, Andorra has also undergone a complete reform of its tax system and has approved, for the first time in the history of the country, a corporate and a personal income tax, even though the fiscal pressure is still very low. The aim of this article is to systematically analyse this major transformation of the Andorran legal framework in the context of the initiatives undertaken by the EU and the OECD in tax matters.
Turkey: A New Tax Amnesty
Authors: Biçer Ramazan
Published: February 2022

This article mainly discusses tax related provisions of a new law on public receivables. The Law enables, from the point of public receivables, public debtors to pay their debts either by cash or instalments by restructuring public claims, which have difficulty in collection. The article also provides certain examples of new restructuring program for public receivables by focusing on the defined public receivables and accounting adjustments associated with the cash and the receivables from the company's shareholders.
The New De Minimis Anti-abuse Rule in the Parent-Subsidiary Directive: Validating EU Tax Competition and Corporate Tax Avoidance?
Authors: Bogenschneider Bret N. , Tavares Romero J.S.
Published: February 2022

In this study, the authors propose that the 2014 amendment to the EU Parent-Subsidiary Directive (which introduces a new minimum ‘anti-abuse’ rule) effectively sets a standard definition of abuse under EU law that would only curb ‘wholly artificial arrangements’ and likely fosters tax avoidance, in spite of the express intent of the Directive to allow Member States to adopt stricter norms. The study explores hypothetical fact patterns to illustrate multiple instances of seemingly abusive or artificial structures, or functionally thin interposed entities, that could be deemed valid under the terms of the amended directive by one state and trigger disproportionate tax relief in other states irrespective of their national tax policies, thus fostering tax competition and base erosion within Europe, particularly in fact patterns wherein third-country capital is (re)invested in the EU/ EEA. Furthermore, this study discusses whether fundamental principles of primary EU law would systematically and coherently condone such result.
The Attribution of Profits to Permanent Establishments within the Framework of the European Arbitration Convention: The Interpretation of Article 4(2) of the AC
Authors: de Carolis Daniele
Published: February 2022

At the Joint Transfer Pricing Forum meeting of 12 March 2015, the issue of improving the functioning of the European Arbitration Convention on Transfer Pricing was the main item of discussion. In particular, the Joint Transfer Pricing Forum (JTPF) members reached an agreement on the finalized text of the revised Code of Conduct, which is due to replace the previous 2009 version. One of the most innovative and complex provisions introduced by this latest version of the Code of Conduct is included in the new point 6(b) concerning the interpretation of Article 4(2) of the Arbitration Convention on the attribution of profits to permanent establishments. The drafting of this provision spurred a wide debate within the JTPF, which is worth to look at in its essential features, since it involved the main issues on the functioning of the Arbitration Convention, starting from its purpose, its legal nature, its raison d’etre, up to the complex issue of its interpretation and relationship with Double Taxation Conventions (DTCs).
International Tax Issues in Relation to Cross-Border Investment Funds
Authors: Letizia Giulia
Published: February 2022

The article will analyse the main international tax issues that arise with regard to cross-border investment funds, such as the entitlement to treaty benefits, the residence for tax purposes and the existence of a permanent establishment in the country in which the investment is made if certain activities are carried out therein. Specific focus shall be dedicated, inter alia, to the international tax issues connected with the provisions of the EU directive on Alternative Investment Funds.
The Selectivity of Tax Measures: A Tale of Two Consistencies
Authors: Piotrowski Sophia
Published: February 2022

The selectivity criterion under Article 107 (1) Treaty on the Functioning of the European Union (TFEU), which in many cases is decisive for assessing whether Member States’ tax benefits constitute state aid, is often still construed along the lines of the ECJ’s Adria-Wien Pipeline decision. However, the ECJ has in the meantime taken a markedly different course with its landmark Paint Graphos and Gibraltar decisions. Against this background, the present contribution argues that the selectivity criterion should impose two cumulative consistency requirements on Member States. De jure selectivity addresses internal consistency, i.e., the consistent implementation of their own reference systems whereas de facto selectivity could in the future guarantee external consistency, i.e., compliance with international minimum standards.