bluuebunny/crossref_metadata_2025 huggingface dataset:
Mutual Agreement Procedures in Tax Treaties: Problems and Needs in Developing Countries and Countries in Transition
Authors: Protto Carlos
Published: February 2022

Mutual agreement procedure is a key tool that need to be strengthened in order to reduce unresolved treaty-related disputes, while providing certainty and predictability for business. Competent authorities need to improve the effectiveness of this mechanism, facing many obstacles that prevent them from solving disputes in due time. This article describes some problems that, additionally, competent authorities in developing countries have to address to perform their function, particularly those related to the organization itself, which may prevent them from considering arbitration as an alternative dispute resolution mechanism to deal with disagreements in the course of MAP cases.
Beneficial Owner: Judicial Variety in Interpretation Counteracted by the 2012 OECD Proposals?
Authors: Gooijer Jan
Published: February 2022

The 2012 OECD proposals on beneficial ownership aim to remove the existing ambiguity and differences in interpretation of this concept. This contribution contains an assessment of the proposals taking into account the historical development of the concept and case law from various countries. Some further amendments are proposed that will help to achieve a uniform interpretation.
Vienna Conference on Recent and Pending Cases at the European Court of Justice on Direct Taxation
Authors: Pinetz Erik , Cannas Francesco , Huisman Eline
Published: February 2022

On 22 and 23 November 2013, the Institute for Austrian and International Tax Law of Vienna University of Economics and Business organized a conference on 'Recent and Pending Cases at the European Court of Justice on Direct Taxation'. This article summarizes the main points of the conference. It will be followed by the publication of a book containing an elaboration of all cases presented during this event.
The Increasing Importance of Transfer Pricing Regulations: A Worldwide Overview
Authors: Riedel Nadine , Zinn Theresa
Published: February 2022

Intercompany transactions generally offer the opportunity to shift income from one jurisdiction to the other, which maybe a valuable instrument for multinationals to reduce the overall tax burden. At the same time, profit shifting imposes risk to governments as it may reduce tax revenues. More and more governments are, therefore, introducing and extending transfer pricing regulations in order to combat profit shifting through intercompany transactions. This study examines forty-four countries and analyses the development of different aspects of transfer pricing regulations over a time period of nine years (2001-2009). In order to show the differences of the regulations in a single measure, an attempt is made to categorize transfer pricing regulations regarding their stringency and impact. The results of the categorization confirm not only the increasing importance of transfer pricing regulations, but also offer very useful and valuable information for future research.
2014 Income Tax Reform in Norway
Authors: Zielke Rainer
Published: February 2022

On 30 April 2015, the individual income tax declaration for 2014 is due in Norway. The present article is the only English language publication worldwide that enables the reader to calculate the income tax and tax on net worth of individuals for 2014 on the basis of the individual income tax reform 2014 in Norway, including rules impinging on cross-border relations. This is of particular importance today, as Norway - due to its rich natural resources - has become an important country both economically and in terms of immigration. Today the country has international connections based on economic relations and immigration. The present article provides a praxis oriented overview on the 2014 tax changes in Norway with special respect to the taxation of individuals, the taxation of corporations, the real estate tax and other. After that the resulting effects of the tax changes on the tax burden of individuals in 2014 are outlined and calculated.
The Duty of Countries and Enterprises to Pay Their Fair Share
Authors: Stevens Stan A.
Published: February 2022

In this article the author examines to what extent countries and enterprises have a duty to pay a fair share of taxes. The conclusion of this article is that the current debate pays too little attention to the substance of the fair share obligation. What is a fair distribution of tax revenues among countries and what constitutes a fair distribution of the tax liability among multinational companies? Interests of states and companies are intertwined and sometimes collide. States try to attract investments by introducing tax incentives, but at the same time they want to combat aggressive tax planning by multinational companies to protect their own tax base. The current policy debate requires that the States redefine the allocation mechanisms for (international) taxation. The principle of origin might be a promising concept in that respect. At the same time multinational companies must be accountable for their tax policy, but that is difficult due to the absence of a clear set of standards.
A Brazilian View on Base Erosion and Profit Shifting: An Alternative Path
Authors: Rigoni João Marcus de Melo
Published: February 2022

This article argues that notwithstanding the formal invitation made to the OECD by the G20 to propose solutions to the problem of base erosion and profit shifting (BEPS), some countries, for reasons of their own, may prefer to act unilaterally. Brazil is used as a case study as a result of its intense tax policymaking activity in the past twenty years, which has deviated from the OECD's approach. Based on economic data, it is contended that Brazil has been able to design a tax system enabling it to tackle BEPS successfully. This article presents the salient features of the Brazilian tax system as an alternative to the OECD's future proposals, assisting policymakers of other countries - mainly non-OECD members - to redesign their tax system in order to strengthen the legal mechanisms that protect their respective tax bases.
A Possible Approach to Tax Competition and Economic Development: The Value of Time in Drafting Direct Tax Policies
Authors: Colcavagno Federico Balbiano di
Published: February 2022

In this contribution, the author would like to highlight the potential positive impact that a fair tax and transparent (where benefits are not granted on a discretionary basis) competition can have on the economic development of states. The author is looking at the topic of tax competition from the perspective of the value of time when states have to decide on their internal direct tax policies. In particular, the key issue is to generate trust through consistency in the tax strategies put in place by single states.
BEPS Action 2: Neutralizing the Effects on Hybrid Mismatch Arrangements
Authors: Marres Otto , de Boer Reinout
Published: February 2022

Curbing tax arbitrage is one of the main priorities of the Organization for Economic Cooperation and Development (OECD) (endorsed by the G20 and the G8) ever since the public debate on base erosion fully erupted. Neutralizing the effect of hybrid mismatch arrangements has become Action No. 2 of the OECD Base erosion and profit shifting (BEPS) Action Plan. This has resulted in the recent 2014 deliverable, which is divided into two parts: recommendations for domestic law (part I), and treaty issues (part II). The authors analyse and evaluate the report on the 2014 deliverables on BEPS action point 2. They submit that, given the draw backs of specific anti-hybrid rules as to practical and political feasibility, a further review of alternatives is warranted, particularly with respect to CFC and interest deduction limitations. A more simplified mismatch rule applicable to interest seems particularly worthy of further analysis, given that hybrid mismatch arrangements almost always evolve around interest deduction (a notable exception applies with respect to payments to reverse hybrids; however, effective CFC rules may be effective in countering this particular brand of mismatches). In addition, more generic interest deduction limitations (as opposed to specific hybrid mismatch rules) may be a viable complementary way to mitigate double non-taxation resulting from hybrid mismatches and thus act as a sufficient discouragement for entering into such arrangements.
Transfer Pricing in BEPS: First Round  Business Interests Win (But, Not in Knock-Out)
Authors: Brauner Yariv
Published: February 2022

Reforming the transfer pricing regime is not merely one of many equal tasks faced by the BEPS initiative; it is its core task. The Organisation for Economic Co-operation and Development (OECD) has responded to the challenge with an ambitious plan to reform the substantive transfer pricing rules so that they could realistically meet the challenges of sophisticated tax planning - particularly of transactions involving intangibles - and to standardize reporting to reduce compliance and enforcement costs for all stakeholders. On September 2014 the OECD has delivered only partially on these promises, progressing very little on the substantive reform front, yet meeting the not less important goal of standardizing transfer pricing reporting. The article takes a critical look at the progress of the BEPS project in the transfer pricing area, and makes recommendations to support the OECD's original intentions as articulated in the initial Base Erosion and Profit Shifting (BEPS) reports.
US-Based Pushback on BEPS
Authors: Lobo Kenneth , Rinninsland Robert G.
Published: February 2022

The US's Government's main goal is to prevent other countries from taxing what it views as "its" tax base through Base erosion and profit shifting (BEPS). While the US broadly agrees that the issues addressed by BEPS should be remedied, they disagree that a multilateral framework is the best solution for some of these problems.

In this regard, US lawmakers and regulators have publicly expressed doubt about the progress and effectiveness of the BEPS project. Along with the US corporate community, concerns are that: (i) there are areas of international tax law that are the province of the US and should be managed as such without the layering on top of a newly created set of rules and principles, (ii) the basic tenet of transfer pricing, the arms-length standard, should remain a cornerstone of international tax; and, (iii) US international tax reform is urgently needed to either compliment BEPS Action Plans, to protect US economic interests that would be adversely affected by implementation of BEPS or a combination of both.
Some Fiscal Issues of the Charter of Fundamental Rights of the European Union
Authors: Poelmann E.
Published: February 2022

The principles embodied in the Charter of Fundamental Rights of the European Union also affect daily fiscal life. Their significance increases as the European Court of Justice (ECJ) applies them in judgments on tax matters, including related penalties. The author reacts to some fiscally relevant aspects of the Charter. He concludes that the Charter will become increasingly important in years to come and will be decisive in specific cases.
Rethinking Article 19 OECD MC (Government Service): A Provision in Search of a Rationale?
Authors: Blank Michael
Published: February 2022

In recent years, Article 19 Organization for Economic Co-operation and Development (OECD) MC has become the subject of growing scholarly criticism and contentious court rulings. The authors argue that many of these reflect a confused understanding of Article 19 OECD MC's foundation and rationale. The history, drafting, and structure of the provision clearly show that the provision is motivated not so much by fiscal considerations, but by the aim of protecting the sovereignty of the contracting states. The interpretation should accordingly be guided by the public international law doctrine of (relative) sovereign immunity. This rationale, however, no longer applies once the government employment has ended. It would therefore be best if Article 19(2) were deleted.
The Impact of the Chinese Enterprise Income Tax Reform on the Reinvestment Incentive of Foreign Invested Companies
Authors: Zhang Yiping , Bachmann Carmen , Baumann Martin
Published: February 2022

Foreign direct investment (FDI) is a major driver of the Chinese economy. In 2008, China introduced a new Enterprise Income Tax (EIT) Law, which abolished many tax incentives for foreign invested enterprises (FIEs). This article reviews and analyses the effect of tax reform changes on the reinvestment behaviour of foreign-owned Chinese subsidiaries considering the foreign tax system and leverage ratio. It can be shown that the EIT reform resulted in a significant increase in the reinvestment hurdle rate of FIEs.
Tax Havens and Tax Shelters: A Legal View on the Cross-Border Intermediate Holding Companies within the EU
Authors: Ronfeldt Thomas
Published: February 2022

This article will set out some points on the issue of Tax Havens which are also known as Tax Shelters. Tax Havens (or Tax Shelters) are a major concern in most of the world. This is because the Tax Haven issue has a great impact on the economies throughout the world. Politicians, particularly in Europe and the US, are discussing taking actions against Tax Havens. In the US some action has already been taken. It seems like the discussions and the upcoming decision-making are made on the grounds where the issue at hand is not fully understood. The main question may then be, what exactly is a Tax Haven?
The Italian Tax Regime of Outbound Dividends Distributed to Foreign Investment Funds: An Analysis from a European Perspective
Authors: Ampolilla Marina , Rossi Luca
Published: February 2022

This article analyses the new tax regime of Italian collective investment vehicles (CIVs) introduced by Law Decree No. 225/2010, converted into law with modifications by Law No. 10/2011 to evaluate its compatibility with European law. After describing the tax treatment of dividends paid to resident and non-resident CIVs, the authors analyse the most relevant judgments of the European Court of Justice (ECJ) dealing with the discrimination provisions regulating the tax treatment of dividends received by non-resident CIVs in order to evaluate the compatibility of the domestic law provisions with European principles, as interpreted by the ECJ. In the last part of the article, the authors examine whether such principles may be extended to third countries situations and if so, under what conditions a restriction of the fundamental freedoms granted by the Treaty may be denounced by CIVs established in non-Member States.
Tax Treaty Treatment of Start-Up Expenses in Connection with the Establishment of a PE
Authors: Hagemann Tobias
Published: February 2022

The author discusses the questions of attribution of income derived prior to the establishment of a Permanent Establishment (PE) based on a decision of the German Federal Fiscal Court. Therefore, the author gives an overview of the Court's findings, which lead to tax exemption of expenses incurred for establishing a PE, even if the PE fails. These findings are discussed thereafter with regard to the interpretation of treaties under particular consideration of the Treaty's purpose. This is because tax exemption of expenses relating to a failed PE leads to non-recognition of expenses, which may be regarded as a form of double taxation. Further, practical implications are discussed, whereat the author addresses implications of the ECJ's case law on the recognition of 'final losses' as well as of a Treaty Override clause in German Tax Law. Consequently, the author disagrees with the position taken by the Court and the German tax authorities. While attribution of income to a PE should not depend on the time when income is derived, to effectively avoid non-recognition of income, attribution should, in the author's view, not occur before existence of a PE.
Joint Audits: Next Level in Cooperation between Germany and The Netherlands?
Authors: van der Hel-van Dijk E.C.J.M.
Published: February 2022

The international landscape in tax matters is changing rapidly. In particular the taxation of multinational companies nowadays is closely scrutinized. As a reaction tax authorities are seeking for enhanced international cooperation in tax matters. Within that context the German and Dutch tax authorities last year completed a pilot project in which they examined whether they could add a new form of cooperation – the so-called joint audit – to the existing ones. The evaluation of the pilot project provides a number of insights that are important for the further development of mutual assistance in tax matters. In this contribution I will discuss the evaluation and its consequences for the future.
Fiscally Transparent Entities: Issues When Accessing Indian Tax Treaties
Authors: Achanta Vishal
Published: February 2022

Fiscally transparent entities face hurdles when trying to access tax treaties, because they may not meet the ‘person’ and ‘resident’ criteria usually contained in Article 1 of a tax treaty. In particular, courts may often consider them as not being ‘liable to tax’ in the residence State. This article aims to present an analysis of how Indian courts have dealt with fiscally transparent entities that claim the benefits of an Indian tax treaty. To this end, the Organization for Economic Co-operation and Development’s (OECD) jurisprudence on fiscally transparent entities as well as case law on the interpretation of the words ‘liable to tax’ has been laid out. With this background, the article examines the few cases in which fiscally transparent entities have claimed treaty benefits. Conclusions are then culled out from these cases, and the article deals with the possible outcome of a situation wherein a partnership – involving partners who are residents of numerous different states – tries to access an Indian tax treaty. The article ends by suggesting that India needs to clarify its position on fiscally transparent entities by attaching Protocols to its network of tax treaties.

Fiscally transparent entities are popular across the world because of the tax efficiency they offer. Fiscally transparent entities, such as partnerships or trusts, usually allow income to ‘pass through’ them: there is no taxation at the entity level. However, this ‘fiscally transparent’ attribute throws doubt on whether such entities can claim the protection of a Double Tax Avoidance Agreement (‘DTAA’ or ‘tax treaty’) with India. This is because the (otherwise highly beneficial) absence of taxation at the entity level may be used by Indian tax authorities to contend that a fiscally transparent entity is not a ‘resident’ in its State of incorporation/location, and therefore should not be granted treaty benefits. Indian tax authorities (Revenue) may also contend that such entities do not fall under the definition of ‘person’ in a DTAA.
To What Extent Business Restructurings Fall within the Scope of Transfer Pricing Regulations in Russia?
Authors: Hanninen Aleksei
Published: February 2022

While Russia's new transfer pricing rules regulated in Chapter V.1 of the Tax Code definitely provide improvements to several transfer pricing issues, many interesting and timely transfer pricing questions, in particular business restructurings, still remain unsolved in the Tax Code. As transfer pricing of business restructurings has not been directly discussed in the Russian case law either, the current legal state in this respect should be considered very ambiguous. In this article, I will discuss to what extent business restructurings may fall within the scope of transfer pricing regulations in Russia. One of the main questions is should the business restructurings be examined as transfers of a going concern or should all the assets transferred in the course of business restructuring be reviewed separately. In addition, while the Tax Code's new transfer pricing rules are to a large extent based on the OECD Transfer Pricing Guidelines, it has its own peculiarities which may be considered troublesome especially from the view point of business restructurings. For instance, the arm's length principle regulated in the Tax Code is applied only to controlled transactions where commodities, services and/or work are being transferred between related parties. As it is very common in business restructurings that intangible assets, e.g., trademarks, goodwill and know-how, are transferred from one company to another, the Tax Code's provision cannot easily be applied to business restructurings.
Expansion of the Danish Tonnage Tax Scheme
Authors: Baerentzen Susi Hjorth
Published: February 2022

This article aims to describe the latest developments in the taxation of shipping companies in Denmark. Recent political developments have aimed at expanding the tonnage tax regime, and a bill to do so has been adopted by the Parliament on 21 December 2015. Furthermore, this article encompasses an overview of the current rules for taxation of shipping companies and seafarers in Denmark plus an overall description of other European tonnage tax regimes.
Jurisdiction of the Italian Tax Judge on Administrative Acts Denying Access to the Arbitration Convention on Transfer Pricing: Towards a Dispute Resolution Procedure Ever More Independent of State Con
Authors: de Carolis Daniele
Published: February 2022

The Court of Cassation’s orders n. 12759 and 12760 of 2015, in acknowledging jurisdiction of the Italian tax judges on administrative acts denying access to the Arbitration Convention on Transfer Pricing, represent two fundamental decisions for the development of this Convention towards a dispute resolution regime which is more and more independent of State control. In order to illustrate the extreme importance of these decisions, this article first provides a synthesis of their contents, then it analyses the debate within the Joint Transfer Pricing Forum on the denial of access to the Arbitration Convention: this debate will allow some reflections on the role which the issue of denial of access to the Conventions plays, together with the improvement of the arbitral phase, in the process of rendering the dispute resolution regime envisaged by the Convention more efficient and, at the same time, ever more independent of State control.
The Interplay between the OECD Recommendations of Actions 2 and 3 Regarding Hybrid Structures
Authors: Kahlenberg Christian
Published: February 2022

On 5 October, the Organisation for Economic Co-operation and Development (OECD) submitted a package of measures for the BEPS project (‘Base Erosion and Profit Shifting’) for a comprehensive and coordinated reform of international tax regulations. The final reports relating to all fifteen action points have now been issued. It is clear that coordination among the individual measures is necessary in order to implement efficient preventive tools in the fight against harmful tax activities of internationally operating companies. The OECD is addressing this fact in an open and direct manner. The postulated coordination is necessary in particular to ensure that the fundamental goal of avoiding double taxation is not undermined. Whether such coordination with respect to hybrid structures is happening, especially in the areas of Actions 2 (Hybrid Mismatch Arrangements) and 3 (Controlled Foreign Corporation (CFC) Rules), is subject to this article.
Countries Aggressive Tax Treaty Planning: Brazils Case
Authors: Rocha Sergio André
Published: February 2022

In the international taxation sphere, countries are channelling efforts and resources in the fight against ‘aggressive tax planning’ by enterprises and individuals. However, it is not unusual that countries will also use aggressive tax schemes to increase tax revenues, through measures that exceed internationally accepted standards. Brazil might be considered such a violator, at least from a moral standpoint. The Country has been creating tax-like contributions to tax transactions with non-residents beyond the thresholds established in tax treaties. The objective of this article is to analyse whether discussions regarding morality in taxation can also be applied to State behaviours, demonstrating that shortcomings in ethics are not just the privilege of taxpayers.
The Application of Revised Transfer Pricing Rules to Aspects of Business Models
Authors: Hickman Andrew
Published: February 2022

The author discusses specific concerns about the efficacy of the application of transfer pricing rules to aspects of business models that have been addressed in the revisions to the Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines contained in the 2015 base erosion and profit shifting (BEPS) Report, Aligning Transfer Pricing with Value Creation. Distinctions are made between business models and transfer pricing business models that risk constraining the business to convenient explanations. Transfer pricing business models involving transfer of contractual risk and of legal ownership of intangibles are examined. Finally, the author predicts interest in single entity cross-border business models and the need to develop consistent guidance on attribution of profits to permanent establishments.
Group Structuring and Profit Repatriation
Authors: Wiman Bertil
Published: February 2022

This article is based on a presentation at the Uppsala conference on Base Erosion and Profit Shifting (BEPS) and its impact on business models, 16–17 June 2016. While discussing the impact from the several BEPS Actions in general terms, the author focuses on the principle purpose test and its potential application on holding companies. He argues that avoiding the multiple or recurrent taxation of profits in the corporate section may conform to the object and purpose of a tax treaty, and that this issue should be further developed in the continued work on BEPS.
Base Erosion and Profit Shifting and Business Restructurings
Authors: Wood Stuart , Hall Mikael
Published: February 2022

In anticipation of the release of the new Chapter IX of the Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines, this article looks at the potential impact that the outcome of the Base Erosion and Profit Shifting (BEPS) project will have on business restructurings. Specifically, the article examines some of the areas of convergence and divergence between the 2010 version of Chapter IX and the new guidance issued under the BEPS Actions 8–10 Final Reports (Aligning Transfer Pricing Outcomes with Value Creation). Whilst the new guidance arising from Actions 8–10 is anticipated to offer additional clarifications in the area of business restructurings, we note that there are additional areas of complexity which are likely to lead to increased controversy for multinational enterprises (MNEs), with double taxation as an inevitable result.
From Compliance to the C-Suite: Value Creation Analysed Through the Transfer Pricing Lens
Authors: Markey Bram , Verlinden Isabel
Published: February 2022

Business models in a global context have evolved at a much speedier pace than the international tax framework. The internet of things, powerful corporate identities, innovative ways to play the market and an increasing reliance on intangibles are vital elements that lead to unprecedented ways of ‘value creation’. The Base Erosion & Profit Shifting (BEPS) project by the Organisation for Economic Co-operation and Development (OECD)/ Group of Twenty (G20) aims at ensuring that profits are effectively taxed where the economic activities generating the profits are performed. This is embedded in the premise that transfer pricing outcomes should be aligned with value creation. Many tax authorities and tax practitioners grapple with interpreting and translating value creation under innovative business models of multinational enterprises (MNEs) to the transfer pricing dictionary. In this article, the authors describe by means of examples how successful companies nowadays create value and unlock ‘economic rent’ across the value chain based on distinctive capabilities and unique business models. The authors subsequently put forward a novel economic approach to grasp value creation from a tax perspective in order to test whether there is a match with the transfer pricing outcomes. They started from the insights shared in ‘Strategy that works’ from PwC Strategy&, a playbook for the C-Suite to close the ‘strategy-to-execution’ gap.
Cross-Border Financial Transactions and Arms Length Interest Rates: A Two-Step Approach
Authors: Schilling Dirk , Greil Stefan
Published: February 2022

Financial transactions between related parties are often scrutinized in tax audits. In order to analyse whether the conditions (transfer prices) underlying these transactions, in particular regarding intercompany loans, are appropriate from a tax point of view, they have to be in line with the arm’s length principle. Given this, there is a substantial burden for the taxpayer as there are no precise regulations on how the arm’s length prices are to be determined, neither on a national nor on an international level. Subject of this article is to discuss cross-border financial intra-group transactions by taking into account economic as well as administrative reasoning. Basing on this discussion, a two-step approach is developed which combines the two pillars by providing an indication on how arm’s length prices could be determined on the one hand while also focusing on administrative issues on the other hand. This two-step approach could be applied to any kind of financial transactions.
Convergence of Dividend and Capital Gains Taxation in the European Union from 1990 to 2015
Authors: Schanz Deborah , Maier Christoph
Published: February 2022

The common regulatory framework and the European integration process determine the taxation of corporate distributions in the European Union (EU). Against the background of EU law and jurisdiction, we examine the development of the domestic tax rules and tax burdens on distributions in the form of dividend payments and capital gains in fourteen EU Member States from 1990 to 2015. We find that tax burdens differ for individual and corporate shareholders, particularly at the beginning of the observation period. Individual shareholders face higher tax burdens on dividend payments than on capital gains. For distributions to corporate shareholders, tax systems provide opposed tax incentives due to higher tax burdens on capital gains than on dividend payments. Despite the overall lack of EU harmonization regulation for direct taxes, our results reveal implicit convergence of the tax systems. Hence, tax reforms in the EU Member States show a trend toward equally taxed dividends and capital gains for both shareholder groups.
Comparing Tax Entities in a European Perspective Part I The Issue of Comparable Situations Required for Being Covered by European Union Law
Authors: Ronfeldt Thomas
Published: February 2022

Against the backdrop of recent practices of the Court of Justice of the European Union, these articles will seek to analyse which group structures are assumed to be comparable and are thus tax entities protected by the European Union (EU), and which group structures are assumed to be non-comparable and thus do not constitute tax entities protected by the EU. This is covered in two consecutive articles. This is the first article.
Taxation of Individuals in the Sharing Economy
Authors: Beretta Giorgio
Published: February 2022

This article explores some of the tax implications that may arise in the context of the sharing economy. In particular, the author analyses the main challenges, from an individual taxation perspective, resulting from this new model of production and consumption. In this respect, different typologies of transactions and their tax characterization are surveyed. The contribution also includes a comparative overview of the steps taken so far by countries to regulate this new phenomenon and it formulates some suggestions in designing adequate tax policies.
The EU Anti-Tax Avoidance Directive and the Base Erosion and Profit Shifting (BEPS) Action Plan: Necessity and Adequacy of the Measures at EU level
Authors: Ginevra Guglielmo
Published: February 2022

The article scrutinizes the recently adopted Directive 2016/1164/EU (also known as the Anti-Tax Avoidance Directive) in the light of BEPS Actions 2, 3 and 4.

For this particular purpose, after a brief overview of the general policy objectives of the Directive, the analysis is focused on the measures of the Directive that refers explicitly to the content of these actions, namely the interest limitation rule in Article 4, the Controlled Foreign Company (CFC) rules in Articles 7 and 8 and the anti-hybrid mismatch rule in Article 9. In respect to each of these provisions, the article illustrates to which extent they are consistent with the corresponding provisions in the BEPS Action Plan and whether they comply with the initial objects and scope of the Directive. Finally, it is assessed their compatibility with the EU primary law and the jurisprudence of the European Court of Justice.
EU Value Added Tax: The Directive on Vouchers in the Light of the General Value Added Tax Rules
Authors: Amand Christian
Published: February 2022

The Directive 2016/1065/EU of 27 June 2016 intends to clarify the definition of vouchers, as well the transfer thereof by a taxable person and it’s taxable base. In this article, it is observed that the solutions of the new Directive are similar to those of the regulation 1042/2013/EU interpreting the Directive 2006/112/EC regarding the invoicing and payments via a telecommunication network, as well to the existing provisions applicable to Undisclosed and Disclosed intermediaries. Therefore, the specific rules applicable to the different categories of intermediaries are useful in order to determine which are the rules applicable to the place of supply, exemptions, taxable event, deduction of input VAT regarding a transfer of vouchers. These general rules may also be useful in order to determine the VAT treatment of operations similar to transfer of vouchers, such as tickets, admission to sport and cultural events and trading operations in unallocated goods.
The Reverberation Effect of the EU Notion of Abuse of Law on the Italian Tax Legal System: Towards an Enhanced Horizontal Interaction Among National General Anti-Abuse Rules?
Authors: de Carolis Daniele
Published: February 2022

In the preface to the seminal book ‘Prohibition of Abuse of Law – A New General Principle of EU Law?’1prof. de la Feria relies on the metaphor of ‘reverberation’ in order to account for the creation and development of an EU principle of abuse of law and its impact on the different Member States’ national legal systems. Building on this idea, this article shows how the reverberation metaphor can effectively be used to explain the impact of the EU notion of abuse of law on the Italian tax legal system and the horizontal interaction of this latter system with other Member States’ legislations. On this reading, the first section illustrates the main features of the reverberation process; the second examines the impact of this process on the Italian tax legal system with particular reference to the process of codification of a national General Anti-Abuse Rule (GAAR); finally, the third section attempts a comparison between the Italian and the English anti-abuse provisions in order to work out an example of possible horizontal interaction between the two national systems.
Transfer Pricing in Russia and Germany: Similarities and Differences
Authors: Friegel Sebastian , Ivanova Natalia Georgievna , Orlova Anastasia Aleksandrovna , Petuhova Rimma Alekseevna , Meyering Stephan
Published: February 2022

Transnational related companies are allowed to settle border-crossing internal obligations by use of transfer prices. For related companies, it is assumed that internal business relationships are not determined predominantly by the competing interests normally prevailing between unrelated third parties. Since transfer prices affect the tax burden in individual countries, the problem arises of the appropriateness of transfer prices between cross-border related companies. This study primarily aims to provide an overview of transfer prices in the international context. It focuses in particular on their configuration respectively in Germany and in the Russian Federation.

To sum up, it can be stated that the transfer pricing rules in Germany and the Russian Federation are based on the OECD’s recommended transfer pricing rules. However, when it comes to their specific elaboration, both countries partially diverge from them. In both countries, the arm’s length principle is established as the key standard for evaluating the appropriateness of transfer prices both in the international and national context.
A Multidimensional Analysis of the Concept of Place of Effective Management in India: A Panacea to the Double Taxation Conundrum?
Authors: Das Anand Swaroop , Sharma Kamal
Published: February 2022

Today, at a time when unprecedented structural and reformative changes are taking place in the Indian Taxation paradigm, the recent amendment in section 6(3)(ii) of the Income Tax Act, 1961 through Finance Act, 2015 acquires critical importance. Section 6(3)(ii) determines ‘residence’ of a company i.e. if the company is found to be resident in India, Income Tax would be levied upon its worldwide income. By amendment, the ‘control and management’ test has been replaced by ‘place of effective management’ test which would be effective from the assessment year of 2017–2018. In December 2015, draft guidelines regarding the aforementioned were released by the Central Board of Direct Taxes. The authors in the present article attempt to distinguish between source and residence based taxations along with an elaborate discussion of the Organization for Economic Co-operation and Development’s interpretation of the ‘place of effective management’ test. After a detailed study of the US, UK, and South Africa’s variations of the same test and the Double Taxation Agreements entered into by India with the said three countries, the authors argue that the test has to be applied on a case by case basis depending upon the peculiarities in the factual scenario. The authors highlight the drawbacks in the old test and analyse as to what extent the new test remedies the anomalies with a critical analysis the draft guidelines. The possible implications of the test have been discussed sector wise which is followed by recommendations/suggestions of the authors. In the conclusion, the authors assert that it is necessary to remedy the loopholes before releasing the final draft of the test.
Interest Deduction in the Netherlands: Tax Aspects of the Different Interest Deduction Limitation Rules
Authors: Hendriks Tim , Bobeldijk Arco C.P.
Published: February 2022

The difference in taxation of equity and debt capital encourages to finance with debt capital. In order to prevent the erosion of the Dutch corporate income tax base, the Netherlands has a number of interest deduction limitation rules. In this article the most important interest deduction limitation rules are discussed.
The Impact of BEPS Actions 810 on Comparability Analysis in the Context of Attribution of Profits to Permanent Establishments
Authors: Tracana Dinis
Published: February 2022

This article outlines the changes introduced by BEPS Actions 8–10 on the transfer pricing comparability analysis, focusing in particular on the new comparability factors and the new role of the ‘control over risk’ criterion, and discusses its application on the attribution of profits to permanent establishments
Taxation and the European Convention for the Protection of Human Rights: Substantive Issues
Authors: Endresen Clement
Published: February 2022

When the European Convention on Human Rights (ECHR) was agreed, clearly it did not apply to substantive tax issues. The author aims to show that there is nothing to suggest that the inclusion of the protection of property rights in paragraph 1 of the First Protocol to the Convention represented a change in this respect.

In spite of this, there is in the literature considerable enthusiasm for the notion that the Convention is also important as regards this issue.

The author examines the jurisprudence of the European Court of Human Rights (ECtHR) in cases which involve substantive tax issues, and argues that the Court, with the help of the concept of an extraordinary margin of appreciation, has indeed shown great reluctance towards getting involved in these issues.

This approach is applauded, and it is argued that the old notion that taxation is a fundamental part of national sovereignty, is still valid, and that it justifies the restraint shown by the ECtHR.

The question of legal security for taxpayers – to the extent that this principle is also relevant to substantive issues – must be balanced against the principle of effectivity. Thus, the solutions to legal security issues in this sphere of the law may well differ from the solutions to parallel questions in other legal contexts.
Tax Sparing: Use It, But Not as a Foreign Aid Tool
Authors: Li Na
Published: February 2022

Tax sparing should not be treated as a foreign aid tool, but that instead, it should be used as an effective treaty device where both residence states and source states may benefit from in order to achieve ‘two-headed’ goals. As tax sparing changes the present zero-sum game for sharing tax revenue from involving two-parties to involving three-parties, doubts and criticisms will unavoidably arise. However, the successful approaches of Singapore, as well as China’s resumed use of this mechanism, demonstrates that tax sparing may be effective if, and when, used well.
When Taxation Meets Arbitration: Recent Initiatives to Introduce and Promote Arbitration in International and European Taxation
Authors: Zeyen Gaëtan
Published: February 2022

In a globalized world, arbitration plays an increasing role in settling international disputes. Almost all areas of Law are or might be concerned. Until very recently, [international] taxation was – as a rule – seen as a not ‘arbitrable-friendly’ matter. As the ‘classical’ method of settling international tax disputes – i.e. based on the so-called ‘Mutual Agreement Procedure’ (shortly, ‘MAP’) – has shown its limits (mainly: lack of efficiency and involvement from the taxpayers themselves), arbitration became a subject of study for well-known and established academics and even an appropriate method of settling such international tax issues. As a result, both on international (OECD) and European levels, legal initiatives have been taken, in order to promote arbitration as an additional tool of settling disputes in the field of international taxation. The purpose of the present article is, therefore, to describe and scrutinize these [very] recent legal initiatives and raise some potential issues that, at least in the author’s view, need to be addressed. One of these issues concerns the enforcement of such arbitral decisions.
A European Taxpayers Code
Authors: Valente Piergiorgio
Published: February 2022

The European Commission published ‘Guidelines for a Model for A European Taxpayer’s Code’. The Guidelines seek to clarify taxpayers’ fundamental rights and obligations in the EU while proposing best practices for their enhancement. The European initiative follows several international ones to the same end. Their comparison reveals the Guidelines’ rather restricted scope. Although they constitute a step forward, they fall short of their potential, demanding further steps to ensure due protection of taxpayers’ rights.
The Limitation on Benefits (LOB) Provision in BEPS Action 6/MLI: Ineffective Overreaction of Mind-Numbing Complexity  Part 1
Authors: Kuzniacki Blazej
Published: February 2022

This comprehensive two-part article addresses the usefulness of the limitation on benefits (LOB) rule in the base erosion and profit shifting (BEPS) Action 6 project and a Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) to prevent abusive treaty shopping – the most prevalent and typical form of treaty abuse. Although a certain flexibility in the prevention of treaty abuse was envisaged by the BEPS Action 6/MLI, only twelve out of the sixty-eight Signatories to the Multilateral Instrument (MLI) have so far chosen to add the MLI’s LOB rule to the principal purposes test (PPT). Such little interest in implementing the MLI’s LOB rule may have something to do with its mind-numbing complexity. Or perhaps tax administrations simply prefer to have more discretionary power under the PPT? This study interrogates this unexplored research area by performing a comprehensive, in-depth analysis of abusive treaty shopping and the MLI’s LOB rule. The overarching question pertains to the effectiveness of the MLI’s LOB rule in the prevention of treaty shopping. In the event of critical findings, de lege ferenda conclusions will follow.
Action 2 and the Multilateral Instrument: Is the Reservation Power Putting Coordination at Stake?
Authors: Galdino Guilherme
Published: February 2022

In order to address tax arbitrage on hybrids arrangements, Action 2 of the Action Plan on Base Erosion Profit Shifting requires coordination on the modification of both levels domestic provisions and tax treaties. In this sense, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting includes three provisions (Articles 3, 4 and 5) related to the hybrid mismatch arrangements. However, as these provisions may be subject to reservations, the coordination requirement may not be verified, undermining its effectiveness. Through an empirical analysis, this article shows that the signatories present a low commitment to these provisions. After explaining the coordination requirement in light of Action 2 recommendations and the need to modify tax treaties, the authors describe Articles 3, 4 and 5, and test such coordination. As the signatories of the Multilateral Instrument often reserve the right to apply one or more of these provisions, the reservation power is putting coordination at stake.
The Limitation on Benefits Provision in BEPS Action 6/Multilateral Instrument: Ineffective Overreaction of Mind-Numbing Complexity  Part 2
Authors: Kuzniacki Blazej
Published: February 2022

This is the second part of a comprehensive two-part article addressing the usefulness of the limitation on benefits (LOB) provision in base erosion and profit shifting (BEPS) Action 6 and the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) in prevention of abusive treaty shopping – the most prevalent and typical form of treaty abuse. The study concludes that the MLI LOB rule is an ineffective overreaction of ‘mind-numbing complexity’ which, despite its great potential to reflect the nature of tax treaties and treaty shopping, seems to be a lost opportunity to address that most prevalent form of treaty abuse in a targeted, effective manner. After a critical analysis, de lege ferenda conclusions will follow.
Country note: Integrity  The Keystone to Good Tax Administration
Authors: D’Ascenzo Michael
Published: February 2022

Corruption has a corrosive impact on the wellbeing of a nation, and is especially damaging to tax administrations. The article explores the causes of corruption both from the perspective of the design of tax systems and from the perspective of tax administrations. It outlines a range of generic remedies that can be used to minimize the risk of corruption. In giving life to these generic remedies the article follows the approach taken by the Australian Taxation Office to reinvigorate its integrity framework as a result of the improper conduct of an assistant commissioner (Petroulias) in the late 1990s.