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On May 28, 2021 on the website of the Dutch Courts (De Rechtspraak) a judgment of the Court of Appeal Arnhem-Leeuwarden of May 18, 2021 in the Case: 19/00599, (ECLI:NL:GHARL:2021:4878), was published. The case regards the question which jurisdiction has the right to tax signing bonuses of professional football players which are lent out/rent out by a Belgium professional football organization (a BPFO) to a Dutch professional football organization (a DPFO).
Before discussing the case I have to admit that this case were an eye-opener for me. From time-to-time I hear/read about the new contracts top players sign with a club. The press then talks about the huge signing bonusses the players receive. The naïve football fan in me always believed that when the player signs the new contract on day X, one day later the millions were remitted to his bank account. The facts of the underlying case gave me some new insight with respect to signing bonusses.
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Op 27 mei en 28 2021 zijn op de website van De Rechtspraak 3 conclusies gepubliceerd van Advocaat-Generaal Niessen waarin hij zijn licht laat schijnen wat moet worden verstaan onder de Exploitatie van een schip in het internationaal verkeer in de zin van artikel 15, lid 3, van het Verdrag Nederland-Zwitserland. Of beter gezegd wat daar niet onder valt.
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On May 21, 2021 on the website of the Dutch Courts (De Rechtspraak) an opinion of Advocate General Wattel in the Case: 21/00564, Stichting [X] versus de inspecteur van de Belastingdienst/kantoor [P] (the tax inspector/tax office [P]) (ECLI:NL:PHR:2021:440), was published. The opinion concerns questions referred to the Dutch Supreme Court for a preliminary ruling by the District Court of Noord-Nederland.
Before discussing the tax consequences of the restructuring it might be good to get some understanding regarding the position of the taxpayer in the underlying case and why it came in the position it is.
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Op 21 mei 2021 is de website van de Rechtspraak de conclusie gepubliceerd van de Advocaat-Generaal Wattel van 30 april 2021 in zaak nummer: 21/00564, Stichting [X] tegen de inspecteur van de Belastingdienst/kantoor [P] (ECLI:NL:PHR:2021:440). Deze conclusie betreft prejudiciële vragen die zijn gesteld door de Rechtbank Noord-Nederland.
De Rechtbank Noord-Nederland vraagt zich met name af of de nieuwe vastrentende leningen moeten worden beschouwd als voortzettingen van de vroegere variabel rentende leningen met IRS-hedges, waardoor de IRSs-afkoopsom beschouwd zou moeten worden als de rente die de belanghebbende zich tijdens de looptijd van die nieuwe leningen bespaart. Gegeven HR BNB 2014/116 (market maker) en HR BNB 2020/13 (IRS: een voldoende samenhangende IRS en variabel rentende lening worden tezamen behandeld als een vastrentende lening), is de vraag wat rechtens is als de looptijd van de swap en de daaraan gekoppelde variabele-rente-lening niet wordt uitgezeten, maar (vermoedelijk) wél de looptijd van de vervangende vastrentende lening. De rechtbank heeft de Hoge Raad daarom bij tussenuitspraak van 9 februari 2021 verschillende vragen gesteld.
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On May 20, 2021 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Tanchev in the joined Cases C-45/20, (E versus Finanzamt N) and C-46/20 (Z versus Finanzamt G) (ECLI:EU:C:2021:417), was published.
These requests for a preliminary ruling from the Bundesfinanzhof (Federal Finance Court, Germany, ‘the referring court’), seek clarification of the Court’s case-law on allocation of capital goods and, more specifically, immovable property used for both business and private purposes (‘mixed-use assets’), to a taxpayers private assets, or to the assets of a taxpayer’s business, or to a combination of both (‘the allocation decision’). More specifically, the questions address the consequences flowing from the allocation decision for the right to deduct input tax, under Articles 167 and 168(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2009/162/EC of 22 December 2009 amending various provisions of Directive 2006/112/EC on the common system of value added tax (‘the VAT Directive’).
The questions ask about the compatibility with EU law, particularly in the light of the Court’s ruling in the judgment of 25 July 2018, Gmina Ryjewo, of what is in effect a limitation period under German law for communication to the German tax authorities of the allocation decision, the expiry of which has been interpreted in the case-law of the referring court as resulting in the loss of the right to deduct input tax. The same appears to follow from the presumption in the referring court’s case-law of allocation of mixed-use assets to a taxpayer’s private assets, which applies in the absence of sufficient indications to the contrary.
The Advocate General has reached the conclusion that, in the circumstances of the main proceedings, an interpretation of Member State law in the case-law of the referring court, and pursuant to which a taxable person loses the right to deduct input tax for failure to communicate an allocation decision with respect to mixed-use assets within the time limit for so doing operative under Member State law, is incompatible with Articles 167 and 168(a) of the VAT Directive, for inconsistency with the principles of fiscal neutrality and proportionality, given that there is no indication in the case file of any active concern with respect to tax evasion. The same conclusion applies to the aforementioned assumption of allocation to the private assets of the taxpayer when it results in loss of the right to deduct.
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On May 20, 2021 the Court of Justice of the European Union (CJEU) judged in Case C‑209/20, Renesola UK Ltd versus The Commissioners for Her Majesty’s Revenue and Customs (ECLI:EU:C:2021:400).
This request for a preliminary ruling concerns the validity of Commission Implementing Regulation (EU) No 1357/2013 of 17 December 2013 amending Regulation (EEC) No 2454/93 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code (OJ 2013 L 341, p. 47) and the interpretation of Article 24 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p. 1), as amended by Regulation (EC) No 2700/2000 of the European Parliament and of the Council of 16 November 2000 (OJ 2000 L 311, p. 17) (‘the Community Customs Code’).
The request has been made in proceedings between Renesola UK Ltd (‘Renesola’) and the Commissioners for Her Majesty’s Revenue and Customs (United Kingdom) concerning the imposition of anti-dumping duty and countervailing duty on solar modules imported into the United Kingdom.
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On May 18, 2021 the European Commission adopted a Communication on Business Taxation for the 21st century.
In this respect the European Commission issued 2 press releases.
Withdrawing of the proposal for a CCCBTB and the introduction of a BEFIT
In a more specific press release the European Commission announces that by 2023 the Commission will present a new framework for business taxation in the EU. The purpose of this new framework will be to reduce administrative burdens, remove tax obstacles and create a more business-friendly environment in the Single Market. The “Business in Europe: Framework for Income Taxation” (or BEFIT) will provide a single corporate tax rulebook for the EU, providing for fairer allocation of taxing rights between Member States. BEFIT will cut red tape, reduce compliance costs, minimise tax avoidance opportunities and support EU jobs and investment in the Single Market. BEFIT will replace the pending proposal for a Common Consolidated Corporate Tax Base, which will be withdrawn. The Commission will launch a broader reflection on the future of taxation in the EU, which will culminate in a Tax Symposium on the “EU tax mix on the road to 2050” in 2022.
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On May 12, 2021 we already reported that on that same date the General Court of the European Union (the General Court) judged in the joined Cases T-816/17 (Luxembourg v Commission) and T-318/18 (Amazon EU Sàrl and Amazon.com, Inc. v Commission) (ECLI:EU:T:2021:252). As we reported the General Court concluded that none of the findings set out by the Commission in the contested decision are sufficient to demonstrate the existence of an advantage for the purposes of Article 107(1) TFEU, with the result that the contested decision must be annulled in its entirety.
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On May 12, 2021 the General Court of the European Union (the General Court) judged in the joined Cases T-516/18 (Luxembourg v Commission) and T-525/18 (Engie, Engie Global LNG Holding Sàrl and Engie Invest International SA v Commission) (ECLI:EU:T:2021:251).
Unfortunately the full text of the judgement(s) is not yet available on the website of the General Court. The General Court however has issued a press release in this respect. In the press release issued the General Court announces that it concludes that the General Court finds that it cannot be disputed that the Engie group received preferential tax treatment owing to the non-application, in the contested tax rulings, of the provision relating to abuse of law. In the light of the objective pursued by the provision relating to abuse of law, namely to combat abusive practices in tax matters, Engie and, in particular, the holding companies are in the same factual and legal situation as all Luxembourg taxpayers, who cannot reasonably expect to benefit as well from the non-application of the provision relating to abuse of law in cases where the conditions for its application have been satisfied. Consequently, the General Court holds that the Commission demonstrated to the requisite legal standard a derogation from the reference framework comprising the provision relating to abuse of law.
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On May 12, 2021 the General Court of the European Union (the General Court) judged in the joined Cases T-816/17 (Luxembourg v Commission) and (T-318/18 Amazon EU Sàrl and Amazon.com, Inc. v Commission) (ECLI:EU:T:2021:252).
Unfortunately the full text of the judgement(s) is not yet available on the website of the General Court. The General Court however has issued a press release in this respect. In the press release issued the General Court announces that it concludes that none of the findings set out by the Commission in the contested decision are sufficient to demonstrate the existence of an advantage for the purposes of Article 107(1) TFEU, with the result that the contested decision must be annulled in its entirety.