The European Parliament’s Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE) has published the following interesting so-called supporting analyses on its website.
· Intellectual Property Box Regimes
· EU State Aid Law and National Tax Rulings
· Legislation Practices- Exchange of Information between National Tax Administrations
· Overview of Existing EU and National Legislation on Topics covered by TAXE Mandate
· Nominal vs. Effective Corporate Tax Rates applied by Multinational Enterprises
· Selected International Third-Country Tax-Governance Issues
Intellectual Property Box Regimes
The full title of this supporting analysis is: “Intellectual Property Box Regimes - Tax Planning, Effective Tax Burdens and Tax Policy Options”.
On the first page of the document, the following abstract is given:
“This paper forms part of a series of analytical pieces on various key tax issues, prepared by Policy Department A at the request of the TAXE Special Committee of the European Parliament. This paper contributes to the current debate on Intellectual Property (IP) Box regimes, IP tax planning and OECD’s base erosion and profit shifting (BEPS) project. The aim is three-fold: First, to provide a systematic overview of the 12 IP Box regimes in place in Europe by the end of 2014, and present effective tax rates associated with the IP Box regimes and the use of popular IP tax planning modes; second, to evaluate the IP box regimes on the basis of the EU State Aid rules and the EU Code of Conduct for business taxation; third, to discuss options to reform the taxation of IP income in order to counter profit shifting and tax base erosion.”
Click here to be provided to the supporting analysis: “Intellectual Property Box Regimes - Tax Planning, Effective Tax Burdens and Tax Policy Options”.
EU State Aid Law and National Tax Rulings
On the first page of the document, the following abstract is given:
“This paper forms part of a series of analytical pieces on various key tax issues, prepared by Policy Department A at the request of the Special TAXE Committee. It sets out how tax rulings can be subject to state aid scrutiny if they lead to a beneficial tax treatment of a particular undertaking that is not in line with the normal application of national tax law. However, a deviation from national law in itself is not always an indicator of selective aid. As national law is the only relevant benchmark, the state aid regime is not designed to impose particular doctrines or best practices on the tax systems of Member States.”
Subjects discussed in this supporting analysis include a.o.:
· THE NOTION OF (FISCAL) STATE AID
o Article 107(1) TFEU
o Aid must be present
o Granted by a Member State
o Distortion of trade and competition
o Selectivity
· TAX RULINGS
o Monitoring
o At arm’s length pricing
o Mismatches
§ Mismatches causing double non-taxation
§ Deliberate mismatches
§ Increasing transparency
§ Hybrids: do state aid rules require anti-abuse measures?
o Is a beneficial ruling selective by definition?
§ Burden of proof
§ Rulings open to major investors
o Can a C(C)CTB reduce the risk of state aid and tax rulings?
§ A C(C)CTB cannot do without rulings either
o Can state aid be a substitute for infringement proceedings?
· RECOVERY OF FISCAL STATE AID
o Method of recovery & tax credits
o Windfall benefits to Member States
Click here to be provided to the supporting analysis: “EU State Aid Law and National Tax Rulings”.
Overview of Legislation Practices Regarding Exchange of Information between National Tax Administrations in Tax Matters
On the first page of the document, the following abstract is given:
“This paper forms part of a series of analytical pieces on various key tax issues, prepared by Policy Department A at the request of the TAXE Special Committee of the European Parliament. It deals with the need for information exchange between sovereign states on tax-related issues, which is increasing rapidly. In this vein, the Organisation for Economic Co-operation and Development (OECD) and the EU have developed better instruments of information exchange. The OECD has enlarged the scope of Articles 26, 27 of the OECD Model Tax Convention (MTC) and has in parallel proposed a specific Tax Information Exchange Agreement (TIEA) Model. Both sources have been increasingly used in the bilateral treaty practice. In parallel, the EU has enacted two new directives: the Directive concerning Mutual Assistance for the Recovery of Claims and the Directive on Administrative Cooperation. This paper aims at providing a systematic overview of recent developments (including on the concept of 'automatic exchange') and explains the content and function of the legal sources delimiting each other. The paper also deals with the legal protection of taxpayers, especially with the protection of personal data and commercial, industrial, business and professional secrets. It emphasizes the necessity of an international tax secret as an EU minimum standard.”
Subjects discussed in this supporting analysis include a.o.:
· LIMITATION BY TERRITORIALITY PRINCIPLE
· INFORMATION EXCHANGES BASED ON BILATERAL LEGAL BASIS 10
o Information clauses modelled on Art. 26 OECD Model Tax Convention
o Agreements on Mutual Assistance modelled on OECD Model Tax Convention 2002 (Tax Information Exchange Agreement)
· INFORMATION EXCHANGES BASED ON EU-LAW 14
o EC Mutual Assistance Directive 77/799/EC and EU Directive on Administrative Cooperation
o Council Directive 2003/48/EC (Saving Directive)
o Council Directive 2014/48/EU (amended Saving Directive)
o Council Directive 2014/107/EU (amended EU Directive on Administrative Cooperation)
· INFORMATION EXCHANGES BASED ON MULTILATERAL LEGAL BASIS
· CONCURRENCES OF THE LEGAL BASES
· TYPES OF INFORMATION EXCHANGE
o Short Overview
o Exchange of Information on Request
o Spontaneous Exchange of Information
o Automatic Exchange of Information
o Concurrences of the Information Types
· USE OF INFORMATION EXCHANGE FOR STATE AID CONTROL
· LEGAL PROTECTION OF TAXPAYERS
o Legal Enterprise Secrets
o Personal Data Protection by EU law
o Jurisdiction of the CJEU regard personal data protection
o Specific data protection needs regarding automatic exchange of information
o Additional effective procedural instruments needed to protect the freedom rights of taxpayers
Click here to be provided to the supporting analysis: “Legislation Practices- Exchange of Information between National Tax Administrations”.
Overview of Existing EU and National Legislation on Topics covered by TAXE Mandate
On the first page of the document, the following abstract is given:
“This paper forms part of a series of analytical pieces on various key tax issues, prepared by Policy Department A at the request of the Special TAXE Committee of the European Parliament. It 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.”
Subjects discussed in this supporting analysis include a.o.:
· 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 provided to the supporting analysis: “Overview of Existing EU and National Legislation on Topics covered by TAXE Mandate”.
Nominal vs. Effective Corporate Tax Rates applied by Multinational Enterprises
On the first page of the document, the following abstract is given:
“This paper forms part of a series of analytical pieces on various key tax issues, prepared by Policy Department A at the request of the TAXE Special Committee of the European Parliament. The international tax system is at a critical juncture. The G20 and the OECD are leading an important international project for its reform: the Base Erosion and Profit Shifting (BEPS). The project was launched following unprecedented public and political anger at the aggressive tax planning activities of multinational enterprises (MNE). Reform at the EU level is also underway; both in parallel with the BEPS project but also beyond it. This paper provides some background to these developments. In particular, it explains a number of significant aggressive tax planning techniques and mechanisms used by MNEs and provides an overview of the empirical evidence on the scale of this behaviour. In other words, this paper looks at how and how much aggressive tax planning by MNEs takes place. The paper also provides a concise overview of the basic structure of the international tax system as well as the factors undermining it.”
Subjects discussed in this supporting analysis include a.o.:
· 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
o Corporation tax systems in EU Member States
· TAX PLANNING TECHNIQUES AND MECHANISMS
o Techniques and Mechanisms
§ Exploitation of Transfer Pricing Rules
§ Debt Shifting
§ Hybrid Mismatch Arrangements
§ Tax Treaty Abuse
§ Artificial avoidance of Permanent Establishment status
§ Tax Rulings
o An Example of a Tax Planning Structure
· EMPIRTICAL EVIDENCE
o Statutory Corporate Income Tax Rates vs Effective Tax Rates
o Studies using other methods
§ Aggregate approaches
§ Specific Profit Shifting Channels
§ Conclusion
o How can the empirical evidence be improved?
Click here to be provided to the supporting analysis: “Nominal vs. Effective Corporate Tax Rates applied by Multinational Enterprises”.
Selected International Third-Country Tax-Governance Issues
On the first page of the document, the following abstract is given:
“This paper forms part of a series of analytical pieces on various key tax issues, prepared by Policy Department A at the request of the TAXE Special Committee of the European Parliament. It examines some of the pressures that European countries will face over the coming decade as they move towards a more transparent tax environment and continue to push for better tax compliance and the impact on promoting good governance in third countries. The first part of this paper provides a brief overview of some of the megatrends that will affect tax systems and then looks at some of the trends in tax levels and structures. This is followed by an examination of some of the challenges that EU tax policy makers facing and how EU governments are responding to these challenges.”
Subjects discussed in this supporting analysis include a.o.:
· THE IMPACT OF MEGATRENDS ON GOVERNMENT EXPENDITURE AND TAX SYSTEMS
· THE IMPACT OF TAX HAVENS ON EU COUNTRIES, THEIR DEPENDENCIES AND THIRD COUNTRIES
· CHANGE IN TAX LEVELS AND STRUCTURES
· CHALLENGES FACING TAX POLICY MAKERS OVER THE NEXT DECADE
o Reconciling national tax systems with globalization
o Redesigning the international tax rules of the game
o Exchange of information
o The move towards tax transparency
o Dealing with illicit activities
o Countering Harmful Tax Competition
Click here to be provided to the supporting analysis: “Selected International Third-Country Tax-Governance Issues”.
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