bluuebunny/crossref_metadata_2025 huggingface dataset:
Dual Resident Companies and the Implementation of the Parent-Subsidiary Directive by Germany in Light of European Union Secondary Legislation and Primary Law: An Analysis and Review
Authors: Kollruss Thomas
Published: March 2022

Due to the European Court of Justice (ECJ) jurisprudence (Inspire Art/Centros/Überseering/Cartesio), the cross-border mobility of companies within the European Union (EU) area may increase steadily. Companies that have been established under the domestic law of one Member State with their statutory seat and registered office in that state (state of incorporation) but have their place of effective management in a different Member State are currently quite common. Such companies are called dual resident companies. For the first time in the literature on taxation, this article reviews the implementation of the Parent-Subsidiary Directive (90/435/EC) by Germany with respect to dual resident subsidiary companies that distribute their profits to a domestic German parent company. The Parent-Subsidiary Directive is part of the EU secondary legislation and should be generally implemented by the twenty-seven EU Member States in their particular national tax law. In this regard, the manner of the Parent-Subsidiary Directive's implementation into Germany's tax law is critically analysed in the light of European primary law (freedom of establishment). Moreover, the harmful tax effects caused by a potentially incorrect implementation of the Parent-Subsidiary Directive at the level of the German parent company are highlighted against the backdrop of EU law.
Exit Taxes for Companies in the European Union after National Grid Indus
Authors: Kok Reinout
Published: March 2022

On 29 November 2011, the European Court of Justice (ECJ) issued its ruling in the National Grid Indus case regarding the compatibility of exit taxes and the freedom of establishment. In this ruling, the ECJ ruled that levying an exit tax as such is not an infringement on the freedom of establishment, but it is not proportional to collect the exit tax immediately. Upon request of the taxpayer, collection has to be deferred until the built-in gains in the assets/liabilities are realized. Although the decision leaves some questions unanswered, the principal issue regarding the compatibility of exit taxes with European Union (EU) law is now resolved.

In the past, the European Commission had started infringement cases regarding exit taxation against Member States whose exit tax legislation allegedly was not in line with EU law. Now that the ECJ has ruled in the National Grid Indus case, those Member States should start to amend their legislation to bring it in line with the requirements set out by the ECJ.
National Approaches towards a Financial Transaction Tax and Their Compatibility with European Law
Authors: Dietlein George
Published: March 2022

After the British veto against a European financial transaction tax, the options of European legislation in this area are quite restricted. This paper deals with the question of whether financial transaction taxes as national solo efforts in the eurozone can be introduced in accordance with European law. The article focuses on the fundamental principle of free capital movement (Articles 63 et seq. Treaty on the Functioning of the EU) and the relevant provisions in European Union (EU) secondary law (Capital Duty Directive, General Agreement on Trade in Services). The author comes to the conclusion that national approaches towards a financial transaction tax would be a breach of European law, primary as well as secondary.
National Grid Indus Case: Consequences under an Italian Perspective
Authors: Letizia Giulia , Capitta Francesco
Published: March 2022

The article describes the impact of the decision of the European Court of Justice 'National Grid Indus' on Italian rules regarding exit taxation.

The former Italian legislation prescribed the immediate taxation of unrealized capital gains, except if a Permanent Establishment (PE) is maintained in Italy, without distinguishing between the establishing of the amount of taxes and their recovery. In the meantime, the European Commission opened an infringement procedure against Italy with regard to the rules on exit tax. In January 2012, such rules have been modified in compliance with the principles established in National Grid Indus, allowing Member States to tax corporations on latent capital gains at the time of the transfer of the place of effective management to another Member State, but deferring the collection until the actual realization of the assets. This change carries out a series of problematic aspects concerning the scope of application of the new provision with regard to the transfer of permanent establishments of foreign enterprises in Italy, the tax basis of the assets transferred and, in particular, the interaction with the Merger Directive.
Recent Development in Exchange of Information within the EU for Tax Matters
Authors: Seer Roman
Published: March 2022

In a more globalized world, the need for mutual assistance between sovereign states is increasing. Therefore, the Organisation for Economic Co-operation and Development (OECD) and the EU have intensified the instruments of information exchange. The OECD has enlarged the scope of Articles 26, 27 OECD-Model and has proposed a specific Tax Information Exchange Agreement (TIEA)-Model. Both sources have been increasingly used in the bilateral treaty practice. The EU has enacted two new directives: the Directive concerning Mutual Assistance for Recovery of Claims (2010/24/EU of 16 March 2010) and the Directive on Administrative Cooperation (2011/16/EU of 15 February 2011). Notwithstanding these sources, some Member States pursue a utilitarian bilateral solution with Switzerland, the so-called Rubik Agreements. This article will give a systematic overview of the recent developments by explaining the content and function of the legal sources delimiting each other and by giving an outlook for the future.
Harmful Tax Competition: Six Belgian Tax Incentives under the Microscope
Authors: Dirix Kim
Published: March 2022

In today's globalized environment, tax motives have begun to play an increasingly prominent role in a company's (re)location decision. Because of this development, national states have to ensure that their tax systems remain competitive in order to attract new investments (and the corresponding taxable income). However, in doing so, they should refrain from introducing tax measures which qualify as harmful tax competition, since these may have potential negative effects on the tax base of other states. The Organisation for Economic Co-operation and Development's (OECD's) 1998 Report on 'Harmful Tax Competition: An Emerging Global Issue' and the European Commission's Code of Conduct on business taxation both aim to curb harmful tax practices by establishing the criteria which can be used to identify harmful preferential tax regimes. In addition, the state aid provisions can be used to fight harmful tax competition.

The purpose of this article is to evaluate six Belgian tax incentives in search of any potentially harmful features. As will be demonstrated below, it appears there are still a number of loopholes in the current state of legislation, which mainly relate to the special tax regime for expatriates and the excess profit ruling system.
Retroactive Tax Legislation in view of Article 1 First Protocol ECHR
Authors: Pauwels Melvin R.T.
Published: March 2022

One of the principles derived from the rule of law is that laws should not be retroactive. Taking into account that the rule of law is inherent to the ECHR, the question arises as to how the ECtHR judges retroactive tax legislation. This question is particularly emerging since retroactive tax legislation is not uncommon in the Member States. This contribution examines in which way the ECtHR tests retroactive tax legislation for compatibility with Article 1 First Protocol ECHR, and which basic guidelines with respect to the testing of retroactive tax legislation can be deducted from the case law of the ECtHR.
Tax Design Issues in Respect to Foreign Branches and Controlled Companies and the Feasibility of a Consolidation Area in the EU
Authors: Garbarino Carlo
Published: March 2022

The Common Consolidated Corporate Tax Base (CCCTB) architecture seems to address the major tax design issues relating to foreign business profits in the EU which result from the intrinsic limitations of domestic tax consolidation systems but would intervene in a scenario in which Member States retain prerogatives in developing their own policies in respect to cross-border profits and losses of affiliated companies. The purpose of this article is to shed light on those policies and on the major tax design issues relating to foreign business profits in the EU in light of the case law of the European Court of Justice (ECJ) and of the potential adoption of the CCCTB Directive. The paper first addresses the tax treatment of foreign branches both in the case in which foreign profits are taxable and in the case in which are exempt in the residence-country (section 2) and then discusses the issues related to the tax consolidation of foreign controlled companies (section 3), with additional remarks about the tax design issues faced by host countries whose tax base can be eroded through certain tax planning strategies by resident companies that are controlled by foreign entities (section 4). The paper concludes by describing the common core of rules already existing at EU level and how this rules are conveyed in the CCCTB model which might be approved through enhanced cooperation (section 5) and finally draws a few conclusions of the feasibility of a residence-based consolidation area in the EU (section 6).
K v. Finland: EU Developments in the Area of Foreign Loss Deduction Rules
Authors: Staes Mélanie , Peetermans Marie-Aline
Published: March 2022

This article describes the recent judgment of the Court of Justice of the European Union (the Court) in K. v. Finland. The decision considers a Finnish rule disallowing the deduction of a loss on the sale of property situated in another Member State, when that loss exceeds the amount of foreign income received by the resident taxpayer. The Court has examined the deduction of foreign losses on several occasions in the past. This article is therefore an opportunity to assess whether the Court's recent decision is in line with its earlier case law and to what extent it develops the previously established principles.
Anti-avoidance Legislation of Mayor EC Member Countries with Reference to the 2014 Corporate Income Tax Burden in the Thirty-Four OECD Member Countries: Germany, France, United Kingdom, and Italy Comp
Authors: Zielke Rainer
Published: March 2022

Despite continuous instability in the European Community (EC) its mayor countries Germany, France, the United Kingdom, and Italy exhibit continuously economic growth and stability. According to the International Monetary Fund these European countries have - in this order - the highest gross domestic product in the European Community in 2012. In this article anti-avoidance legislation of - according to the gross domestic product - the four most important EC countries will be reviewed with reference to the tax differential to the thirty-four OECD Member Countries.

The pivotal question is, therefore, to what extend can internal tax planning with mayor European countries be optimized by inclusion of anti-avoidance legislation. This article outlines the objectives and concepts of international tax planning with regard to anti-avoidance legislation and provides an overview of the concepts, laws and rules of anti-avoidance legislation in mayor EC Member Countries. After that the advantages and strategies of international tax planning with regard to anti-avoidance legislation in mayor EC Member Countries are deducted where an overview on anti-avoidance legislation of mayor EC Member Countries is provided - also with regard to new tax legislation - and locations for subsidiaries and for parent companies are reviewed. Finally, the concluding remarks are presented. Transfer pricing will not be reviewed here.
Ability to Pay in European Community Law
Authors: Vanistendael Frans
Published: March 2022

After the financial and economic crisis the principle of the ability to pay has regained importance as a principle shaping the structure of income tax. This article deals with the question whether that principle has any role to play in the application of EU tax rules. It analyses whether there is a legal basis to apply this principle in EU law and the way in which this principle is applied in cross-border situations. The conclusion is that although ability to pay is part of the general principles of EU law, there is no clear legal basis in the treaties for the principle to be applied. The absence of this legal basis combined with the one country approach of the ECJ in discrimination cases results in an occasional and inconsistent application of the ability to pay principle.
National Tax Law Presumptions and EU Law
Authors: Sanò Claudia
Published: March 2022

Legal presumptions serve essential and legitimate needs in national legal orders, where they are introduced for the purpose of simplifying the assessment and the recovery of tax or for tackling tax avoidance or evasion. Nowadays, however, the national choices concerning the use of tax law presumptions must be tested against European Union (EU) law, both in uniform or harmonized sectors and, albeit to a different extent, in non-harmonized ones.

In this article, after a brief discussion of the meaning and relevance of the concept on the basis of national juridical traditions, the case law of the Court of Justice of the European Union (CJEU) concerning the repayment of taxes unduly levied is analysed, so as to highlight the core scheme adopted when it evaluates the national tax law presumption's compatibility with EU law.

Afterwards, an examination of the most relevant CJEU case law on legal presumptions in different tax matters (customs law, VAT, direct taxation) is carried out. This, with a view to catching some interpretative trends peculiar to specific domains of taxation which should guide national legislators.

Finally, some general conclusions are developed on the overall approach to national tax law presumptions in the context of EU law, with an eye to national experiences.
Compatibility of IP Box Regimes with EU State Aid Rules and Code of Conduct
Authors: Luts Joris
Published: March 2022

The European Commission has recently started examining Member States' IP box regimes under the both the (soft law) rules of the Code of Conduct on Business Taxation as well as the (hard law) state aid provisions. However, as the scope and interpretation of these rules are unclear and subject to debate, determining whether an IP box regime actually falls foul of these rules is not straightforward. In view of the European Commission's scrutiny, light must urgently be shed on this issue.

In this article, the author has tried to address this compatibility query. In a first part, the characteristics of a 'generic' IP box regime are described. In a second part, the state aid provisions and rules on harmful tax competition (Code of Conduct on Business Taxation) are successively discussed. On the basis of that discussion, the author has tried to provide a framework to assess whether and to what extent IP box regimes are compatible with these rules. It is concluded that a well-designed IP box regime may pass the EU rules on state aid and harmful tax competition.
Overview of New Paths and Patterns in EU Tax Development with Focus on EU Soft Law and External Factors (Part 2)
Authors: Hinnekens Luc
Published: March 2022

A very different - more indirect and factual than formal legal - contribution to the EU tax law-making process is that of the influence of external multi-disciplinary factors. They relate in particular to economic, political and social embedding, comparative better international law, morality and historical imprint. As they are by nature external factors - and by the same token non-legal acts - their impact on the making and evolution of EU tax law is limited to inspiring the official competent EU authorities, eventually serving as 'bottom-up' element in the hard or soft tax law-making process when recognized and legitimized by the 'top-down stamp' of the official competent EU authorities.

Paraphrasing our opening citation: 'Some true, some light, but every one of you / Stamp'd with the image of the European Union'. What thus happens in the end is that we are looking, in this era of fiscal transparency, at new trends and patterns in the ongoing process of EU tax development related to the joint impacts of respectively external factors to the EU legal process (Chapter II) and of the 'reshuffling' of internal legal sources on the part of the competent EU tax authorities (and also, in different degrees and levels, of parallel international organizations as OECD) (Chapter I).

Finally, in Chapter III, the discussions of Chapters I and II are related to the strategic EU development of 'ever closer union among the people of Europe'.
Fiscal State Aids, Tax Base Erosion and Profit Shifting
Authors: Rossi-Maccanico Pierpaolo
Published: March 2022

In this article, the author describes the application of State aid rules in reviewing EU Member States' tax measures for multinationals providing possibilities for tax arbitrage (Base erosion and profit shifting - BEPS). The author provides examples of measures favouring tax arbitrage which are identifiable as State aid if analysed from that perspective and explains how the application of State aid rules is theoretically justifiable and even more appropriate from an EU perspective rather than the use national anti-abuse rules. The author suggests that State aid review is a more effective instrument to tackle abusive tax planning in the EU, because a supranational regulator, subject to EU judicature control, manages it. The author considers that the power of the tax administrations to correct the taxpayers' determinations of their taxable income and fix them on the basis of independent criteria is intrinsically discretional and that transfer-pricing corrections may be cast into legal uncertainty. Accordingly, a new procedural framework is required to restore legal certainty to an area of State aid control which puts into question the proper implementation of the transfer-pricing power of correction by the competent tax administrations. With the grant of an advance ruling a tax administration provides advance certainty about the acceptable determination of the taxable income that a taxpayer should follow; which the author considers to be a sui-generis special right within the meaning of Article 106(1) TFEU. The article accordingly suggests that the Commission adopts a directive under Article 106(3) TFEU to define the conditions under which individual rulings can be granted in respect of undertakings enjoying special rights such as the multinationals being the recipients of transfer-pricing adjustments.
Groupe Steria: A Threat to Group Taxation Regimes?
Authors: Korving Jasper
Published: March 2022

On 2 September 2015, the CJEU issued its judgment in the Groupe Steria case. According to the CJEU, the French group consolidation regime is incompatible with EU law. General tax law provisions that are equally applicable to domestic and cross-border situations are, as a consequence of the scope of the consolidation regime that is limited to domestic groups, more advantageous to these domestic groups. The CJEU in this case determined that also combinations of legal provisions cause incompatibilities with EU law. The author examines the place of this judgment within EU law and especially in relation to the neutrality principle.
Dividend Withholding Taxes after Miljoen, X and Société Générale
Authors: Spindler-Simader Karin
Published: March 2022

The judgment in the cases Miljoen, X and Société Générale is the latest of various judgments regarding dividend taxation and withholding taxes. The ECJ has confirmed its line of reasoning on many issues and given insights on its understanding of other ones. Concerning the deductibility of non-residents’ directly linked expenses, which have to be granted a deduction according to previous case law, the ECJ held that the direct link must exist to the actual payment of the income. Moreover, the Court confirmed its previous case law according to which residents and non-residents find themselves in comparable situations regarding the tax amount levied by the source state. The possibility of neutralizing different treatment by the source state under application of a double tax treaty was again affirmed by the ECJ. In the particular cases, however, it could not be clarified whether such neutralization could be achieved. A unilateral neutralization by the residence state was not accepted by the ECJ. Regarding neutralization in subsequent years, i.e., a carry-forward, the ECJ did not give a judgment due to the hypothetical question.
The Automatic Exchange of Tax Information and the Protection of Personal Data in the European Union: Reflections on the Latest Jurisprudential and Normative Advances
Authors: González Saturnina Moreno
Published: March 2022

In this article, we examine from the perspective of the fundamental right to protection of personal data, the main problems derived from the generalization of the automatic exchange of tax information and, more specifically, the treatment of this issue in Directive 2011/16 EU on administrative cooperation in the tax area in its original text and after the changes incurred to date to promote the automatic exchange of information at the community level. The study is based mainly on the opinions of the European Data Protection Supervisor (EDPS) and the latest EU Court of Justice’s case law.
Tax Policy: Trends in the Allocation of Powers Between the Union and Its Member States
Authors: Kube Hanno , Reimer Ekkehart
Published: March 2022

Over the last twenty-five years, the picture of European tax law has changed significantly. While the European Economic Community (EEC) had largely harmonized indirect taxes already, the law of direct taxation had not realized any substantial influence of EEC law before the 1990 Directives entered into force. With a turbulent start in the mid-1990s, the Court of Justice has reshaped income taxation of cross-border activities and investment by activating the fundamental freedoms. Further developments brought about additional waves of intra-European Union (EU) tax neutrality – joint efforts to combat unfair tax competition, to improve cross-border administrative assistance and to counter Base erosion and profit shifting (BEPS).

In their interdisciplinary analysis, two lawyers and one economist reflect on these developments from the specific perspective of the vertical allocation of powers. Avoiding any misleading split-of-sovereignty language, they demonstrate the current balance of taxing powers between the EU (Commission [COM], Court of Justice of the European Union [CJEU]) and its Member States, most notably the balance of positive and negative integration (section 2). On this basis, they explore options for future EU rule-making on the field of direct taxes (section 3), stress the persistent relevance of negative integration (section 4) and indicate ‘third ways’ – informal cooperation in tax legislation, indirect influence of non-tax measures to tax policy (section 5) and eventually, the introduction of European taxes (section 6).
Reduced Rates and the Digital Economy: The Treatment of (E-)Books Highlights Some Possible Inconsistencies of the EU VAT System
Authors: Cannas Francesco
Published: March 2022

The author analyses the VAT treatment of books and e-books. He provides an overview of the legal framework regulating reduced VAT rates and of the ongoing debate surrounding this topic, and critically examines recent ECJ judgments in this field. The article highlights some inconsistencies arising from the current reduced rates scheme which are amplified by the most recent technological advancements, and aims to stimulate debate regarding possible solutions.
The Brisal and KBC Finance Decision: Once Again the CJEU Assesses the Compatibility with EU Law of Gross Withholding Taxation of Non-residents
Authors: Beretta Giorgio
Published: March 2022

The levying of withholding taxes on non-residents by the source state is a long-standing topic in EU tax law. The recent case Brisal and KBC Finance, concerning a withholding tax levied on an outbound interest payment, constitutes just the last addition to the line of judgments on this issue rendered over years by the Court of Justice of the European Union. In Brisal the Court first confirmed that Member States are permitted to use different techniques for charging a tax on residents and non-residents for the same item of income, i.e. through a final-year assessment and an immediate retention upon the payment. However, the judiciary of Luxembourg found that residents and non-residents are in a comparable situation with respect to the deductibility of operational costs and thus both categories shall be treated equally in this regard. Although this conclusion could most likely have been anticipated in light of precedent decisions of the Court, the judgment in Brisal is equally remarkable since it disrupts a fundamental tenet of taxation of income earned by non-residents without a permanent establishment, i.e. that the source state can levy a withholding tax on the gross amount of such income and that the expenses of the underlying activity have to be considered by the residence state. Besides and more generally, the decision confirmed that the CJEU is increasingly willing to scrutinize the methods for calculating the tax base adopted by Member States in cross-border scenarios.
Case X v. Staatssecretaris van Financiën: Fractional Allocation of Personal and Family Tax Benefits for EU Resident Individuals with Multi-State Income
Authors: Niesten Hannelore
Published: March 2022

According to the well-established principles of the Schumacker-doctrine, a source state does not have to grant personal and family tax benefits, applicable for its own residents, unless (1) the non-resident earns ‘all or almost all’ his family income in the working state, and (2) the income in the residence state is insufficient to take into account the personal and family circumstances. This article critically analyses the judgment of the Court of Justice in the X-case, where the Court had to decide about the last so-called ‘income requirement’ of the Schumacker-doctrine in a multi-state situation. As the residence state could not take into account the personal and family situation, the Court insisted that the personal and family tax benefits should be allocated on a pro rata basis.
The Report Ways to Tackle Cross-Border Obstacles Facing Individuals Within the EU
Authors: Vergouwen Mees , Pötgens Frank P.G.
Published: March 2022

In 2015 the Expert Group of the European Commission published a report identifying various procedural and substantive tax obstacles that individuals face when operating across borders in the internal market. Regarding the identified tax obstacles, the Expert Group proposes both hard and soft law solutions which would require legislative cooperation of the Member States as the focus has been on those obstacles that cannot be tackled by the European Court of Justice (ECJ) as they qualify as disparities or justified restrictions on the fundamental freedoms.

In this article the authors discuss the various substantive tax obstacles and the proposed solutions. The authors subscribe to the view of the Expert Group that harmonization of direct taxation for individuals would be beneficial for enhancing the internal market. Regarding the way in which harmonization can be achieved, the authors would prefer a directive or multilateral treaty including a one-stop-shop.
Aggressive Tax Planning: An Analysis from an EU Perspective
Authors: Cachia Franklin
Published: March 2022

Courts in many countries have found that the tax laws should be interpreted so as to prevent their avoidance by the use of transactions that have no business purpose. This goes to say that the lack of a proper business motive or transactions which do not reflect the economic reality may be interpreted as a step further to tax avoidance and therefore leads to aggressive tax planning. The European Commission (EC) had launched a public consultation on the 10 November 2016 to gather feedback on the way forward for EU action on advisers and intermediaries who facilitate tax evasion, tax avoidance and aggressive tax planning. Following the EC’s public consultation, the EC published a tax paper entitled the Study on Structures of Aggressive Tax Planning and Indicators, Final Report highlighting the model Aggressive Tax Planning (ATP) structures and identifying ATP indicators which facilitate or allow ATP. This article examines the said tax paper by selecting the most prevalent ATP structures and the ways in how such are countered though the EC’s Anti-Tax Avoidance Package.
Interest on VAT Claims
Authors: De Troyer Ilse
Published: March 2022

It is generally accepted that taxpayers can expect to be entitled to interest in case of late refunds of taxes and that they are expected to pay interest in the case of late payment of their taxes. (European Commission, Guidelines for a Model for a European Taxpayers’ Code (2016), point 3.3.4., https://ec.europa.eu/taxation_customs/sites/taxation/files/guidelines_for_a_model_for_a_eur opean_taxpayers_code_en.pdf.) In practice, the implementation of these principles raises a number of questions, in particular in the field of VAT, where account has to be taken of the particularities of the VAT system.
Is an Instruction to Make a Payment an Exempt Supply for VAT Purposes?
Authors: Gamito Philippe
Published: March 2022

Over the last years, the VAT exemption applicable to transactions concerning payments and transfers has been subject to a strict interpretation by the Court of Justice of the European Union (CJEU). What constitutes these transactions has been narrowed down by the CJEU to the function of ‘having the effect of transferring funds and entail changes in the legal and financial character’. This has reduced the opportunity for intermediaries in the supply chain to benefit from the exemption. On 21 March 2018, the Advocate General (AG) handed down his Opinion in DPAS Limited (DPAS) (Case C-5/17), whose conclusions appear to potentially narrow down even further any scope for exemption as regards transactions concerning payments or transfers. According to the AG, the exemption should not apply to a provider that ‘only’ instructs banks to transfer sums of money insofar as it constitutes a ‘mere physical, technical or administrative service’ that is not covered by the exemption. In this article, the author analyses the AG Opinion and provides some alternate views in light of previous case law.
The New Face of International Tax Dispute Resolution: Comparing the OECD Multilateral Instrument with the EU Dispute Resolution Directive
Authors: Govind Sriram
Published: March 2022

With the recent focus on BEPS and digital taxation, it is expected that we will see a ‘tsunami’ of disputes in the coming decade. In order to counteract this, both the OECD and the EU have introduced new dispute resolution measures through the MLI and the Dispute Resolution Directive respectively. Although the provisions in these instruments may appear to have similar structures at first glance, they vary greatly in terms of scope and procedure. In fact, taxpayers will soon be facing questions as to which procedure to apply and how they relate to each other and interact. Accordingly, this article aims to compare the dispute resolution provisions in both instruments so as to point out similarities, differences and the consequences thereof.
Sin Taxes and the New Tobacco Products: EU Tax Law and Morality?
Authors: García Antón Ricardo
Published: March 2022

The launching of the new tobacco products, namely e-cigarettes and heat-not-burn tobacco, poses a challenge to the current EU legal framework of the excise duty applied to manufactured tobacco, currently under the revision by EU Commission. This contribution grasps the tobacco example to question the EU legitimacy to harmonize within Article 113 Treaty of Functioning of the European Union (TFEU).
Definitive VAT Regime: Ready for the Next Step?
Authors: Gruson John
Published: March 2022

Since the European Commission presented the outlines of the definitive VAT system for intra-EU trade in October 2017 a lot has happened. The European Commission released the accompanying proposals on VAT rates, SMEs and administrative cooperation in December 2017 and January 2018. In May 2018 the European Commission tabled a proposal on the detailed implementation of the definitive VAT system. The quick fixes and the regulation on administrative cooperation were adopted by EU Member States. In this article the authors analyse these (adopted) proposals and provide critical comments.
The VAT Treatment of Cryptocurrencies
Authors: Kollmann Jasmin
Published: March 2022

Cryptocurrencies such as Bitcoin and the Blockchain technology will gain importance for the VAT (Value Added Tax) practice and for tax authorities in the future. The European legislator has not dealt with this issue comprehensively. In literature, the discussion regarding the VAT treatment of cryptocurrencies is still in its infancy. This article is therefore intended to illustrate the VAT treatment of cryptocurrencies. Among others, it analyses the exchange of cryptocurrencies, using cryptocurrencies as a means of payment and the mining of cryptocurrencies.
The Concept of Special Tax Zones in EU Tax Law Claudio Cipollini
Authors: Cipollini Claudio
Published: March 2022

The aim of this article is to define a general concept of STZs in the context of EU tax law to be able to explain the different experiences of territorial tax incentives in the Member States. The research is conducted through the review of the relevant sources such as the literature on the topic, the EU legal framework, and the experience of the Member States. The concept of STZs developed here includes a territorial dimension related to the presence of a geographical border as well as of a reference framework with a territorial connecting factor, a structural dimension focusing on the typologies of the tax benefits, and, finally, a functional dimension that considers the objectives of tax policy carried out by public authorities. In the conclusion, a comprehensive definition of STZs is formulated summarizing the key features as they emerge from the research process. At the end, the results achieved offer a common reading key for a deeper understanding of STZs within EU tax law and for a more conscious use of such an instrument in the context of economic and social policies.
Comparative Analysis of the General Anti-Abuse Rule of the Anti-Tax Avoidance Directive: An Effective Tool to Tackle Tax Avoidance?
Authors: Öner Cihat
Published: March 2022

The primary aim of this article is to question whether the general anti-abuse rule (GAAR) of Anti-Tax Avoidance Directive (ATAD) is an effective tool to tackle tax avoidance. By using a comparative technique as a method, other directives that include a GAAR will be analysed as a companion to the ATAD to identify whether there is a common understanding of the concept of abuse of tax laws within the EU legal order. Then the general consequences of the application of the GAAR of the ATAD will be exposed. The difficulties which could be encountered in the application procedure will be explained around some potential scenarios, based on simple models developed by the author.

Tax Avoidance, Abusive Tax Practices, Artificial/Genuine Arrangement(s), Main Purpose(s) Test, Tax Advantage, General Anti-abuse Rule(s) (GAARs), Anti-Tax Avoidance Directive (ATAD), Interest-Royalties Directive, Merger Directive, Parent- Subsidiary Directive.
The ‘DAC 6’ and Its Compatibility with Some of the Founding Principles of the European Legal System(s)
Authors: Cannas Francesco , Ballancin Andrea
Published: March 2022

The current article has two main ‘centres of gravity’. First, it proposes a critical description of the primary points of the European Council Directive known as the ‘DAC 6’ for which the deadline for transposition into the domestic legislation of the Member States is rapidly approaching at the time of this writing. The description is contextualized in the findings of the Base Erosion and Profit Shifting (BEPS) Project. Subsequently, the authors address some of the main points raised by scholars and commentators with regard to its contents, especially the possibility that the mandatory disclosure rules clash with the professional privilege of certain tax advisors, the principle against self-incrimination, or the risk that it will initiate a ‘race to the bottom’ in the sanctioning powers to be exercised by Member States.

Administrative cooperation, Mutual Assistance, DAC 6, Directive 2011/16/EU, Directive 2018/822/EU, Professional Privilege, Self-Incrimination, European Convention on Human Rights, Penalties System, Race to the Bottom
EU Fiscal State Aid Rules and COVID-19: Will One Survive the Other?
Authors: Luja Raymond H.C.
Published: March 2022

In order to facilitate tax relief to deal with the ramifications of the Corona virus, the European Commission temporarily eased the EU’s state aid framework. This contribution will provide a first glance of some of the tax-related measures taken both within and outside of the scope of state aid rules. Their range is wide, from tax filing and payment deferrals to changes to personal and corporate income taxes, VAT and property taxes. Some Member States still struggle with the remaining requirements not to provide tax advantages (other than deferrals) to companies already in financial difficulty before the COVID-19 lockdowns and with handling fiscal years ending after 2020. As for umbrella aid schemes that do not yet specify which measures will be taken but just serve to get approval based on a certain budget, the author suggests to provide a block exemption to reduce the need for prior notification to the Commission. Once government efforts to deal with sudden income loss, liquidity and solvency issues move to stimulating economic recovery, other policy objectives (like the Green Deal) might also enter the equation when companies apply for financial support.

COVID-19, Corona, State aid, Tax relief, Tax advantage, Tax deferral, Financial difficulty, European Union
Economic Reality in EU VAT
Authors: Nellen Frank J.G. , van Doesum Ad
Published: March 2022

In this article, the authors analyse the notion of ‘economic reality’ in EU VAT and how it is applied by the CJEU in its case law. The purpose is to clarify the concept of economic reality, to establish how it affects the taxation of transactions, and to what extent it should affect that taxation when taking into account the principle of legal certainty.

Economic reality, EU VAT, CJEU, case law, judicial interpretation, abuse of law, legal certainty, objective character, fiscal classification, neutrality
The Rule of Law in Taxation, Two Recent ECtHR Judgments on Failure to Respect Final Judicial Decisions
Authors: Attard Robert
Published: March 2022

Rule of Law, Taxation and Human Rights, ECHR, ECtHR, Article 1 of Protocol 1 ECHR, Article 13 ECHR, Effective Remedy, Right to Property, Final Judgments, Credit for Input VAT
Between Apples and Oranges: The EU General Court’s Decision in the ‘Apple Case’
Authors: Parada Leopoldo
Published: March 2022

This contribution provides a brief summary of the EU General Court’s decision in the joined state aid cases T-778/16 and T-892/16 (‘Apple case’) and explores the main reasonings provided by the Court. In particular, it analyses the arguments related to the use of the arm’s length standard as an ‘allocation benchmark’ and the use of the OECD TP Guidelines for this purpose, including also issues of comparability and burden of proof. Finally, the commentary elaborates upon two more general implications with regard to this Court’s decision, namely the use of state aid law as a tool to tackle tax avoidance both within and outside the internal market, as well as the general approach towards ‘stateless income’.

Apple case, state aid, arm’s length, profit allocation, TNMM, selectivity, comparability, TP guidelines, stateless income, tax avoidance
Are the OECD/G20 Pillar Two GloBE-Rules Compliant with the Fundamental Freedoms?
Authors: Broe Luc De , Massant Mélanie
Published: March 2022

In this article the authors focus on whether the Global Anti-Base Erosion (‘GloBE’) rules, as set out in an Organisation for Economic Co-Operation and Development (‘OECD’) Blueprint of October 2020, comply with the EU fundamental freedoms. This compatibility is tested in two distinct scenario’s. In the first scenario the assumption is taken that the GloBE-rules will be implemented directly by the Members States and in the second scenario the assumption is taken that the GloBE-rules will be implemented indirectly through an EU Directive. It is clear from the analysis of the first scenario that the GloBE-rules collide with the freedom of establishment. For the GloBE-rules to be fully in line with this freedom, it is recommended that they include a substance-based carve-out such like the one foreseen in Article 7(2) of the Anti-Tax Avoidance Directive (ATAD). The analysis of the second scenario, which focuses on the EU principles of subsidiarity and proportionality, shows that, even though the GloBE-rules might collide with the freedom of establishment, they could still be successfully implemented given the broad discretion that the Court of Justice of the European Union (CJEU) leaves to the Union legislature. Nonetheless, also here recommendations are made to reduce disproportionate frictions.

Pillar II – GloBE – OECD – BEPS – Minimum taxation – Tax competition – European Law – Freedom of Establishment – Subsidiarity – Proportionality
Commercial Arbitration As the Most Effective Dispute Resolution Method – Still a Fact or Now a Myth?
Authors: Okekeifere Andrew I.
Published: March 2022

“It has always seemed to me—and I cannot resist saying this even thought it might not be traditional and to do so might be controversial—that we lawyers are too complacent. Do we examine our system often enough or closely enough to see how it can be improved? . . . How often are these fundamental questions even addressed, let alone answers sought? These and many others should be.”

per Justice Gerald Butler QC in his retirement address at the Southwark Crown Court,

London, 8 May 1997.
International Investment Law and the Host State’s Power to Handle Economic Crises – Comment on the ICSID Decision in LG&E v. Argentina
Authors: Schill Stephan W.
Published: March 2022

Argentina is facing several claims under bilateral investment treaties (BITs) relating to its emergency legislation passed to tackle its economic crisis in 2001–2002. This article critically analyzes the second ICSID decision on the merits handed down in this context in LG&E Energy Corp. v. Argentina and compares it to the earlier award in CMS v. Argentina. While the decisions do not differ substantially as to the interpretation of substantive investment law, they diverge significantly on the concept of necessity. Unlike CMS, LG&E in part accepted Argentina’s plea of necessity. The article argues that the award in LG&E misconstrued the burden of proof for limiting elements of necessity, such as the question of Argentina’s contribution to the crisis and the selection of less restrictive means, and questions whether its exclusion of compensation for the investor’s material loss was accurate even if the plea of necessity was operative.
Final Offer Arbitration from a Civil Law Perspective – How to Play Baseball in a Soccer Country
Authors: Borris Christian
Published: March 2022

Final offer or “baseball” arbitration, a specific form of arbitration frequently adopted in the United States, is slowly beginning to be recognized also in civil law countries as a useful tool in the speedy resolution of disputes. A key feature of baseball arbitration is its particular conduciveness to settlements, while at the same time maintaining the power of the arbitrator to render an enforceable award. This article describes the characteristic features, as well as the different variants of final offer arbitration found in the practice of modern ADR from a civil lawyer’s perspective. In addition to discussing its advantages and disadvantages, the article also contemplates the circumstances in which final offer arbitration may be a potentially useful method of dispute settlement, and outlines strategic considerations that may come into play in the course of the proceedings.
The Notion of the Superiority of Arbitration Agreements over Jurisdiction Agreements: Time to Abandon It?
Authors: Brekoulakis Stavros
Published: March 2022

The article undertakes a comparative analysis of jurisdiction and arbitration agreements, showing that arbitration agreements are afforded a preferential treatment over jurisdiction agreements. As the article explains, the pro-arbitration trend favouring the enforcement of arbitration agreements has, in effect, gone too far: it has led to the development of the notion of the superiority of arbitration agreements over jurisdiction agreements, which threatens to overthrow the balance of party autonomy in forum selection agreements. This article challenges the notion of the superiority of arbitration agreements, showing that arbitration and jurisdiction agreements have the same objective: to serve procedural party autonomy. It concludes that any special treatment provided to arbitration agreements is not supported by convincing reasoning, or, at least, it is not justified by any sort of “inherent superiority” of arbitration agreements over jurisdiction agreements.
The International Law Association’s Recommendations on Res Judicata and Lis Pendens in International Commercial Arbitration
Authors: Bensaude Denis
Published: March 2022

In June 2006, the Executive Committee of the International Law Association approved recommendations on res judicata and lis pendens in international arbitration which resulted from the work of its International Commercial Arbitration Committee. This article briefly describes the content of these recommendations, which are directed to arbitrators only, and summarises the reports upon which these recommendations are based. In particular, the article sheds light on the practical implications of the recommendations, as well as their limits.
The Public Policy Ground for Setting Aside and Refusing Enforcement of Arbitral Awards — Comments on the New Zealand Approach
Authors: Kawharu Amokura
Published: March 2022

As an adoption of the Model Law, New Zealand’s Arbitration Act 1996 includes conflict with the public policy of New Zealand as a ground for setting aside and refusing enforcement of awards in domestic and international arbitrations. This article examines the public policy ground under the New Zealand Act. It considers the basis for judicial oversight of awards for conflict with public policy, and reviews the approach taken by the New Zealand courts to both the scope and content of substantive and procedural public policy issues. Notably, the New Zealand cases, by adopting a restrictive approach to public policy, establish a high threshold for review. Some further refinement in approach is justified to reflect international developments on the topic of public policy, and to further support the arbitral process.