On December 15, 2015 the new European Parliament’s Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE II) published 4 in-depth analyses. All 4 these papers form part of a series of analytical pieces on the absence of EUcoordination regarding aggressive tax planning and its effects, prepared by Policy Department A at the request of the ECON Committee of the European Parliament.
‘Tax rulings’ in the EU Member States
The paper was drafted by Elly van de Velde and deals with the question what advance tax rulings, advance pricing agreements and other tax arrangements currently are like and how they are meant to develop. Therefore, it is necessary to understand the reasons of their existence and to know the legal and policy limits that should be taken into account on OECD, EU and national levels. The paper gives an overview of the features of tax rulings in general and of the tax rulings practices in the 28 Member States in concrete terms.
The paper discusses a.o. subjects like:
· The context in which tax rulings can exist
o Similar reasons for the existence of tax rulings worldwide
§ Horizontalisation and tax compliance
§ Tax uncertainty and foreign investments
o Tax rulings as an instrument towards a more reciprocal relationship between the tax authorities and the taxpayer…
o … within the limits of the law, but with respect for taxpayer’s rights
§ Legal or policy limits on the international, European and national level
§ Taxpayers’ rights
· ‘Tax rulings’: Advance Tax Rulings, Advance Pricing Agreements and other ‘Tax Arrangements’
o Terminology
§ ‘Tax rulings’
§ Advance tax rulings
§ Advance pricing agreements
§ Other ‘advance tax arrangements’
§ Parallelism
o The EC proposal: ‘Advance cross-border rulings’ and ‘advance pricing arrangements’
· Non-harmonized ‘Tax Rulings’ systems in the EU
o Towards an EU harmonized tax rulings system?
o Long traditions and recent developments in the EU Member States
o Legal or administrative/policy framework
o Tax topics
o Binding effect
o Competent authority
o Fee
o Disclosure
o Appeal
Click here to be forwarded to the in-depth analysis: ‘‘Tax rulings’ in the EU Member States” as published on the website of TAXE II, which will open in a new window.
Corporate tax practices and aggressive tax planning in the EU
The paper was drafted by John Vella and provides some background to the political debate and to the efforts which are currently underway to reform the tax system both at an international level, through the Base Erosion and Profit Shifting (BEPS) project led by the OECD and the G20, as well as at an EU level. It describes the basic structure and the fundamental flaws of the current international tax system. A number of techniques and mechanisms have been and are used by modern multinational enterprises (MNEs) for aggressive tax planning purposes. It also illustrates that these structures exploit the interaction of the tax systems of different states. The paper concludes with a description of the key features and role of the Platform for Tax Good Governance, Aggressive Tax Planning and Double Taxation.
The paper discusses a.o. subjects like:
· An introduction to the international tax system
o The basic structure of the international tax system
§ Domestic tax law
§ Bilateral double tax treaties
§ Anti-avoidance measures
§ EU law
o Flaws of the international tax system
§ Outdated System
§ Competitive Tax Policies of National Governments
· Tax planning techniques and mechanisms
o Debt Shifting
o Hybrid Mismatch Arrangements
o Tax Treaty Abuse
o Artificial avoidance of Permanent Establishment status
o Tax Rulings
o An Example of a Tax Planning Structure (double Irish)
· The platform for tax good governance, aggressive tax planning and double taxation
Click here to be forwarded to the in-depth analysis: ‘‘Corporate tax practices and aggressive tax planning in the EU” as published on the website of TAXE II, which will open in a new window.
Role and functioning of certain EU groups in the area of taxation
The paper was drafted by Elly van de Velde and deals with recent EU initiatives on tax issues on the fight against tax avoidance and aggressive tax planning. Many EU Groups can contribute to the realisation of this work in progress, because of their different priorities. This paper overviews the history, set-up, working methods and results of three EU Groups, i.e. the Council Code of Conduct Group on Harmful Business Taxation, the EU Joint Transfer Pricing Forum Expert Group and the Commission Expert Group on Automatic Exchange of Financial Account Information. Finally, the interaction between these Groups is discussed.
The paper discusses a.o. subjects like:
· COUNCIL CODE OF CONDUCT GROUP ON HARMFUL BUSINESS TAXATION
o History
o Set up
o Working methods
o Results
o Follow-up and future
· EU JOINT TRANSFER PRICING FORUM (EXPERT GROUP)
o History
o Set up
o Working methods
o Results
· COMMISSION EXPERT GROUP ON AUTOMATIC EXCHANGE OF FINANCIAL ACCOUNT INFORMATION (AEFI GROUP)
o History
o Set up
o Working methods
o Results
· INTERACTION BETWEEN THESE GROUPS
Click here to be forwarded to the in-depth analysis: ‘‘Corporate tax practices and aggressive tax planning in the EU” as published on the website of TAXE II, which will open in a new window.
Promoting Good Tax-Governance in Third-Countries: The Role of The EU
The paper was drafted by Jeffrey Owens. According to the paper globalization is knitting separate national economies into a single world economy. This is occurring as a result of rising flows of trade and investment, greater labour mobility, and rapid transfers of technology. Deregulation of financial markets, reductions in trade and investment barriers, and reduced communications and transportation costs have spurred those trends. High tax rates are more difficult to sustain in this new economic environment. As economic integration increases, individuals and particularly businesses gain greater freedom to take advantage of foreign economic opportunities. However, the lack of transparency is giving raise to political concerns to opposition to unfair international tax competition. Against this background, the paper sets out some suggestions for how the EU could use taxation to promote good governance in third countries and intensify its work in this area.
Click here to be forwarded to the in-depth analysis: ‘‘Promoting Good Tax-Governance in Third-Countries: The Role of The EU” as published on the website of TAXE II, which will open in a new window.
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