Later today the European Parliament’s Special Committee on Tax Rulings and other Measures Similar in Nature or Effect (TAXE) will finally have the opportunity to meet with a group of multinationals of its choice. Already months ago TAXE invited these multinationals to be present during one of TAXE’s earlier hearings. Then the multinationals kindly declined. Several members of TAXE have repeatedly expressed how annoyed they were that the multinationals dared to decline an invitation to be present at a hearing of the mighty European Parliament. Some of TAXE's members even suggested (or is threatened a better word?) that the declining multinationals somehow should be punished.

Most (ex-)colleagues who have worked with me probably remember how much I have discouraged them to answer a tax question from the top of their head without checking what the Law or a DTA exactly states. In taxes the slightest mistake can be very costly and especially tax laws are being updated all the time. Therefore I have always encouraged my colleagues to read the text of a Law, Directive or DTA before answering a question. And I do not know whether it is caused by the OECD’s BEPS project or not, but regular visitors of InternationalTaxPlaza might have noticed that, now even more than ever, it is so important to carefully read the text of a DTA.

(May 26, 2015)

The above perfectly describes my weekend. For the first time in a year I took three days off. Went on long nice walks with my 4 year-old daughter in the forest, watched the wild Scottish Highlanders and gave the latest tax news some thoughts. Unfortunately I did not come up with satisfying answers to my own questions.

It has been a while, but now it is here. My next column. 

On May 8, 2015 on the website of the European Parliament a list of countries that will be visited by a Delegation of Members of the European Parliament’s Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect was published. For those who have followed the debates of the Special Committee it does not come as a surprise that the list is very predictable.

I reckon I have been lucky that a significant part of my work has related to Dutch tax matters. This means that I was often dealing with the capable and qualified Dutch tax inspectors. It also means that I have been dealing with the approachable Dutch tax authorities. This approachability is one of the things that makes the Dutch business environment so attractive. Once one is seriously considering a certain structure or transaction, he or she can contact the Dutch tax authorities and discuss the potential Dutch tax consequences of the intended structure/transaction. If the taxpayer and the Dutch tax authorities agree upon the tax consequences of the intended structure, taxpayer and tax authorities can conclude an Advance Tax Ruling (ATR). By doing so the taxpayer obtains upfront certainty regarding the Dutch tax consequences of an intended structure/transaction and avoids uncertainty and potentially lengthy legal procedures. Next to the possibility to obtain an ATR, under conditions it is also possible to conclude an Advance Pricing Agreement (APA) and by doing so avoid uncertainty regarding intercompany prices to be charged/paid for certain services or products.

At first the title of this column might seem a bit strange, but look again. What is the first thing that comes to your mind when you see the title? Keep that thought! 

When we came up with the idea to introduce a column to our website, the subject for the first column was quickly found. Coming up with a good title however was more of a struggle. Should it be something like “Pavlov response triggered by the word royalties”, or something like “Watch out! Do you have an entity in Luxembourg? Then sooner or later you’re going to be accused of misbehavior”. The struggle was ended by my four-year-old daughter. She gave me the inspiration for the title. My daughter is slowly learning to recognize letters. “A” she for example recognizes because it is the first letter of my name. “L” is the first letter of her own name. And “M”? She does not recognize an “M” because it is the first letter of her mommy’s first name. Nor does she recognize the letter “M” because it is in the word “mama”. No, for her the letter “M” stands only for one thing: McDonald’s! And that for a four-year-old girl that in her whole life perhaps visited McDonald’s 4 times. So now back to the subject we chose for this column.

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