MAY 2006
EUROPEAN TAXATION
187
EUROPEAN UNION
The Possible Introduction of Common Consolidated Base Taxation via Enhanced Cooperation: Some Open Issues Luca Cerioni*
Contents 1. INTRODUCTION 2. MATERIAL REQUIREMENTS FOR ENHANCED COOPERATION 3. CCBT UNDER ENHANCED COOPERATION: SOME PROBLEMATIC ISSUES 3.1. Introductory remarks 3.2. The Marks & Spencer case and cross-border loss relief 3.3. Structural benefits and non-discrimination 3.4. Compliance with freedom of establishment, State aid and undistorted competition 3.5. Cooperation on part of non-participating Member States 4. CONCLUSIONS
1. INTRODUCTION The introduction of a “Common Consolidated Base Taxation” (CCBT), which would allow multinational companies with subsidiaries and branches throughout the European Union to determine their tax base under a new set of common rules rather than under different national ones, is unlikely to be deferred by the opposition of some Member States. Specifically, in October 2005, the Commission reaffirmed its commitment to the objective of introducing CCBT, which it had set in 2001.1 The Commission has also clarified that, in the event of persisting opposition by some Member States, CCBT could be introduced by way of enhanced cooperation2 under Art. 43(f) of the Treaty on the European Union (TEU) amongst those Member States accepting CCBT. Such a scenario would give rise to important issues regarding the Member States inside CCBT and those outside CCBT. This article is intended to contribute to the debate on some of these issues. 2. MATERIAL REQUIREMENTS FOR ENHANCED COOPERATION At the time of the drafting of the TEU, it was clear that some Member States were willing to go “faster” than others in the process of an even closer integration in respect of any of the three “pillars” (the European Community, the Common Foreign and Security Policy, and Justice and Home Affairs) of the European Union. The drafters of the TEU, therefore, decided to provide a legal basis to allow a number of Member States to proceed in this direction. In so doing, the drafters had to ensure that the overall objectives of the European
Union were not compromised. Accordingly, Art. 43 of the TEU clarifies that those Member States that wish to establish enhanced cooperation between themselves may use the institutions, procedures and mechanisms in the TEU and the EC Treaty. Art. 43 of the TEU, however, requires that the proposed cooperation: (a) is intended to further the objectives of the European Union and of the European Community, to protect and serve their interests, and to reinforce the process of integration; (b) respects the TEU and the EC Treaty, and the single institutional framework of the European Union; (c) respects the acquis communautaire and the measures adopted under the other provisions of the EC Treaty and of the TEU; (d) remains within the scope of the power of the European Union or of the European Community and does not relate to areas that fall within the exclusive competence of the European Community; (e) does not undermine the Internal Market as defined in the EC Treaty or economic and social cohesion; (f) does not constitute a barrier to or discrimination in respect of trade between the Member States and does not distort competition between the Member States; (g) involves a minimum of eight Member States; (h) respects the competences, rights and obligations of the Member States that do not participate in the cooperation; and (i) is open to all Member States. The introduction of CCBT by means of enhanced cooperation would have to meet all of these requirements. Assuming that requirements (g) and (i), i.e. the participation of at least eight Member States and being open to all Member States, were met, it would be necessary to assess whether or not any of the other requirements could not be satisfied. As the requirements in Art. 43 of the TEU refer to enhanced cooper* LL.M., PhD, University of Essex, and business consultant. The author can be contacted at
[email protected]. 1. COM(2001) 582, “Towards an Internal Market without tax obstacles. A strategy for providing companies with a consolidated corporate tax base for their EU-wide activities”. 2. This position was made clear by the EC Commissioner for Taxation and Customs Union when the Commission set out actions to encourage EU competitiveness (see European Commission Press Release IP/05/1352, 26 October 2005). See also COM(2005) 532 final, “The Contribution of Taxation and Customs Policies to the Lisbon Strategy” of 25 October 2005, p. 5, in which the Commission states its intention to present a Community legislative measure by 2008. The Member States currently opposed to CCBT are the Czech Republic, Estonia, Ireland, the Slovak Republic and the United Kingdom.
© 2006 IBFD
188
EUROPEAN TAXATION
ation in areas that could fall within any of the three pillars of the European Union, the interpretation regarding a hypothesis in respect of such cooperation in a specific area and the procedures for implementing this hypothesis would have to take into account the pillar within which the relevant area fell. Taxation, by virtue of Title VI3 and Art. 2934 of the EC Treaty, falls within the European Community pillar without distinguishing between indirect and direct taxation and, in respect of direct taxation, without distinguishing between personal and corporate taxation. Accordingly, the requirements for enhanced cooperation to establish CCBT limited to a group of Member States would have to be interpreted as meaning that, as long as this helped to further the objectives of the European Community in terms of the undistorted functioning of the Internal Market, no legal obstacles would exist to the establishment of CCBT between a group of Member States. This interpretation could be deduced from: – the express reference to the objectives of the European Community, to the EC Treaty and to the acquis communautaire in requirements (a) to (c); – the circumstance that requirement (d) would have to be met to the extent that company taxation is not an area falling within the exclusive competence of the European Community; – the fact that the requirements not to undermine the Internal Market, not to constitute a barrier to or discrimination in respect of trade between Member States and not to distort competition between the Member States, taken from a previous version of Art. 11 of the EC Treaty, refer both to the establishment and the functioning of the Internal Market; and – the fact that the conditions ensuring the respect of the competences, rights and obligations of the nonparticipating Member States could also be deduced from the acquis communautaire developed to date, amongst which would be the case law of the European Court of Justice (ECJ) on direct taxation, under which direct taxation falls within the competence of Member States but the Member States must exercise this competence consistently with Community law.5 In particular, requirements (c), i.e. in respect of the acquis communautaire, and (f), the absence of a barrier to or discrimination in respect of trade between the Member States and of the distortion of competition between the Member States, would imply the remaining requirements. To the extent that the acquis communautaire was respected, the requirements to further the objectives of the European Union and of the European Community as well as to respect the EC Treaty, the TEU and the single institutional framework would have to be assumed to be satisfied. This would be to the extent that the acquis communautaire included (in addition to primary EC law) all the secondary legislation, the ECJ case law and the “soft law” developed with a view to attaining these objectives. The requirement not to undermine the Internal Market, which is already implied in respect of the acquis communautaire, would also be infringed if CCBT introduced by way of enhanced cooperation created barriers to or discrimination in respect of trade between the
MAY 2006
Member States, or distorted competition between the Member States. In this respect, it has been noted that, in the context of Art. 43 of the TEU, “... barriers to or discriminations in [respect of] trade between the Member States” has the same meaning as “... affect[s] trade between the Member States” in Art. 81 and Art. 87 of the EC Treaty.6 In addition, the requirement not to distort competition between the Member States would have to be interpreted as meaning that enhanced cooperation could not distort competition between enterprises resident or pursuing activities in different Member States.7 This would be on the basis that the requirement, taken from a previous version of Art. 11(e) of the EC Treaty, reflected all other provisions safeguarding undistorted competition in the context of the EC Treaty, for example, Art. 3, Art. 81, Art. 87 and Art. 96. In this respect, it should be noted that Art. 81 and Art. 87 of the EC Treaty have been broadly interpreted by the ECJ. Specifically, the conditions in Art. 81 of the EC Treaty are breached by businesses’ practices capable of constituting a threat, direct or indirect and actual or potential, to the freedom of trade between the Member States8 and, therefore, of modifying the structure of competition in the Internal Market. Similarly, competition between undertakings and trade between the Member States are considered to be threatened under Art. 87 of the EC Treaty by state financial aid that strengthens the position of an undertaking compared to other undertakings competing in intra-Community trade.9 If the “material requirements” for enhanced cooperation were considered globally, it could be argued that, to be admissible under enhanced cooperation, CCBT could not conflict with: – the general principles of EC law, including nondiscrimination (and equal treatment) and proportionality; – the EC Treaty’s provisions on the fundamental freedoms, including the freedom of establishment, on competition and on State aid for enterprises as well as the relevant secondary legislation and the interpretations in ECJ case law; and – the soft law issued by the European Community’s institutions (communications, resolutions, etc.), to the extent that all these “components” of the acquis communautaire indicated the conditions, under which 3. Common rules on Competition, Taxation and Approximation of Laws. 4. The abolition of double taxation is included amongst the objectives to be pursued. 5. ECJ, 14 February 1995, Case C-279/93, Finanzamt Köln-Altstadt v. Roland Schumacker [1995] ECR I-225, Para. 21 and ECJ, 27 June 1996, Case C-107/94, P.H. Asscher v. Staatssecretaris van Financiën [1996] ECR I-3089, Para. 36. 6. Deloitte & Touche LLP, “Study on analysis of potential competition and discrimination issues relating to a pilot project for an EU tax consolidation scheme for the European Company Statute (Societas Europaea)”, London, 18 August 2004, Deloitte-Report-TAXUD/2003/DE/305, Chapter 7, “Enhanced Cooperation”, pp. 70-71. 7. Id., p. 73. 8. ECJ, 13 July 1966, Joined Cases 56 and 58-64, Établissements Consten S.à.R.L. and Grundig-Verkaufs-GmbH v. Commission of the European Economic Community [1966] ECR 299, Summary, Paras. 6 to 9. 9. ECJ, 17 September 1980, Case 730/79, Philip Morris Holland BV v. Commission of the European Communities [1980] ECR 2671, Paras. 10 and 11.
© 2006 IBFD
MAY 2006
EUROPEAN TAXATION
the (establishment and) undistorted functioning of the Internal Market would be considered to have been achieved. In this respect, it could nevertheless be deduced from the acquis communautaire that not all measures influencing the functioning of the Internal Market can be regarded as distortions. For instance, with regard to Art. 81 of the EC Treaty, ECJ case law has made it clear that a distortion in competition must be noticeable10 to fall within the provision. This has lead the Commission to adopt an ad hoc notice regarding agreements that are assumed to be allowed under Art. 81 of the EC Treaty.11 The Regulations regarding State aid also reveal that aid below the “de minimis” threshold and aid to small and medium-sized enterprises (SMEs) meeting certain conditions are assumed not to distort competition.12 In addition, Art. 96 and Art. 97 of the EC Treaty clearly make it possible to argue that it is for the Commission to assess when distortions must be eliminated. This implies that the negligible effects of a measure in respect of enhanced cooperation regarding the functioning of the Internal Market could be tolerated. In other words, that the requirement not to undermine the Internal Market would not be such so as to make enhanced cooperation impossible.13 3. CCBT UNDER ENHANCED COOPERATION: SOME PROBLEMATIC ISSUES 3.1. Introductory remarks The work of the CCBT Working Group, which, to date, has focused on the structural elements of the common tax base, i.e. items of taxable income, deductible expenses, etc.,14 would result in CCBT that would “compete” with regard to businesses choices with national provisions in respect of the tax base of each of the participating Member States. It could also be deduced from the acquis communautaire that CCBT that complied with the EC law principle of proportionality, i.e. that did not go beyond what is necessary to achieve its objective, would respect a requirement for enhanced cooperation. Nevertheless, CCBT, as an optional tax base, could achieve its objective, which is the removal in a unified manner of all tax obstacles to cross-border business activity, if successfully competing in businesses choices with national tax bases. For this purpose, the CCBT rules on the calculation of the tax base would have to be, globally, at least as favourable for eligible businesses as those of each participating Member State.15 In this case, multinational businesses could opt for CCBT because of the savings in administrative compliance costs and the “structural benefits”, such as cross-border loss compensation, the absence of transfer pricing issues and the risk of the economic double taxation of dividends and capital gains accrued in restructurings and no risk of the economic double taxation of interest and royalty payments. Conversely, the CCBT rules could be either more or less favourable than those of each of the nonparticipating Member States. Companies that were tax resident in Member States that did not participate in CCBT could also have subsidiaries and/or branches in Member States that participated in CCBT, and vice
189
versa. This would make it essential to define the territorial scope of CCBT.16 Should this occur, the overall tax treatment within the European Community of the companies that could opt for CCBT could be contrasted with that of companies that could not. In making this comparison, it could be supposed that the participating Member States would agree on a common definition of tax residence in all of the Member States17 and that the CCBT rules would apply according to the territoriality principle for tax residents. This could be one of the easiest solutions. In other words, a parent company that is tax resident in a participating Member State could include in CCBT those subsidiaries and branches in another participating Member State, but not those in a non-participating Member State. A parent company resident in a nonparticipating Member State could also not benefit from CCBT with regard to its subsidiaries and branches in a participating Member State.
10. ECJ, 9 July 1969, Case 5-69, Franz Völk v. S.P.R.L. Ets J. Vervaecke [1969] ECR 295, Sec. 7 and ECJ, 6 May 1971, Case 1-71, Société anonyme Cadillon v. Firma Höss, Maschinenbau KG [1971] ECR 351, p. 356, Para 9. 11. Commission notice on agreements of minor importance that do not appreciably restrict competition under Art. 81(1) of the Treaty establishing the European Community, Official Journal (EC), C 368, 22 December 2001, p. 13. 12. Commission Regulation No. 69/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to the de minimis aid, Official Journal (EC), L 10 of 13 January 2001, pp. 30-32 and Commission Regulation No. 70/2001 of 12 January 2001 on the application of Arts. 87 and 88 of the EC Treaty to State aid to small and medium-sized enterprises, Official Journal (EC), L 10, 13 January 2001, pp. 33-42. 13. That is, from a procedural viewpoint, the circumstance that taxation is an area referred to by the EC Treaty would determine the application of Art. 11 of the EC Treaty. The Member States that wished to establish CCBT by means of enhanced cooperation would have to address a request to the Commission, which could submit a proposal to the Council. With regard to the proposal, the Council, acting on a qualified majority, could decide to grant authorization to establish CCBT by way of enhanced cooperation “in compliance with Articles 43 to 45 of the Treaty on European Union” (Art. 11 of the EC Treaty). In the process of granting this authorization, the last resort clause in Art. 43a of the TEU would make it necessary to ascertain, within the Council, that the objectives of the cooperation could not be attained within a reasonable time by applying the relevant provisions of the EC Treaty. Once it had been determined that a proposal for CCBT by way of enhanced cooperation met the material requirements and, therefore, that it should be authorized on its own merit, establishing that its objectives could not otherwise be attained would not be difficult in the event of persistent opposition by some Member States, as such opposition would make it impossible to meet the unanimity requirement for Council decisions in respect of direct taxation. 14. At the time of the writing of this article, the Working Group, which will meet again to resume its discussions on aspects not dealt with in 2005, has dealt with general tax principles and assets and liabilities depreciation (the first meeting, 23 November 2004), intangible assets, liabilities, reserves and provisions (the second meeting, 10 March 2005), assets and tax depreciation, liabilities, reserves and provisions, capital gains and losses (the third meeting, 2 June 2005), the concept of a “tax balance sheet” (the fourth meeting, 23 September 2005), and the international aspects of CCBT (the fifth meeting, 7 and 8 December 2005). The Working Document in respect of the fifth meeting (CCCTB/WP/019) recognizes that the issues relating to the implementation of CCBT by less than 25 Member States will have to be considered. This will, however, be addressed at a later stage in line with the Draft Work Programme (CCCTB/WP/003). 15. Which could be possible even if CCBT had fewer incentives than all of the present national tax bases. (See the working document, “Progresses to date and future plans for the CCBT”, CCCBT/WP/020, p. 6.) 16. The document of the Working Group relating to the international aspects of the CCBT (CCCTB/WP/019) describes this as the “CCCTB water’s edge”, p. 3, Para. 8. 17. Id., p. 9, Para. 32.
© 2006 IBFD
190
EUROPEAN TAXATION
The hypothesis of CCBT introduced by way of enhanced cooperation and more favourable than those rules regarding the tax base of all of the non-participating Member State would, however, be open to the objection that this would strengthen the “attractiveness”, as business locations, of the participating Member States at the expense of the non-participating Member States. Although, in this case, tax competition could eventually induce the non-participating Member States to align their rules with those of CCBT, it could be argued that CCBT would extend beyond what would be necessary to achieve the purpose of eliminating, in a unified manner, all cross-border tax obstacles within the participating Member States. CCBT would, therefore, conflict with the proportionality principle. Accordingly, the hypothesis underlying the analysis could be that of CCBT applied to companies of every size and legal form, with CCBT rules as favourable as the tax base rules of each of the non-participating Member States. In this case, it could be assumed that the advantage for companies resident in a Member State participating by way of enhanced cooperation in opting for CCBT would consist of all of the structural benefits of this comprehensive approach. 3.2. The Marks & Spencer case and crossborder loss relief In this respect, a first issue would arise regarding cross-border loss relief, which has long been considered to be the main obstacle to intra-EC business activities.18 In the Marks & Spencer case,19 the ECJ accepted the deduction by a parent company of the losses of subsidiaries in other Member States, subject to the condition that all the possibilities for taking these losses into account in the Member State of residence of the subsidiary had been exhausted. The ECJ set these conditions on the basis that, if losses incurred by subsidiaries in a Member State could be unconditionally deducted from the taxable profits of the parent company in a different Member State, the double deduction of the same losses would occur and multinational groups would be free to deduct the losses in the jurisdiction in which they would generate the highest tax value.20 As the ECJ recognized that these tax planning practices should be countered, the Court implicitly regarded such techniques as distortions in the functioning of the Internal Market. Without CCBT, parent companies could deduct losses subject to the rigorous conditions set out in the Marks & Spencer case. This would give rise to a problematic choice in respect of CCBT, which has consistently been regarded as capable of fundamentally resolving the problem of cross-border loss compensation.21 The question, therefore, arises as to whether or not CCBT that permitted cross-border relief for losses incurred by subsidiaries without these conditions would conflict with the acquis communautaire and would do more than would be necessary to achieve its objective. CCBT introduced by way of enhanced cooperation, which, hypothetically, allowed cross-border loss compensation without the limitations set out in the Marks & Spencer case, could be very attractive to companies. At the same time, this could result in a situation in which a parent company based in a participating Member State could unconditionally deduct losses incurred
MAY 2006
by subsidiaries in another participating Member State and also losses incurred by subsidiaries in a non-participating Member State subject to the conditions set out in the Marks & Spencer case. Specifically, those practices that the ECJ implicitly regarded as distortions in the Marks & Spencer case, i.e. the transfer of deductible losses to the jurisdiction in which the losses could generate the highest tax value and the double deduction of the losses, could be implemented between parent companies and subsidiaries resident in participating Member States. Consequently, it would be necessary to determine up to what point CCBT could unconditionally allow crossborder loss deduction for the purpose of achieving one of its key objectives and, therefore, of being an attractive option for businesses, without generating those practices that the ECJ regarded as distortions in the functioning of the Internal Market and without giving rise to what could be regarded as a “barrier to trade” between the Member States. This could arise, as parent companies could, following the entry into force of CCBT, not only set up subsidiaries in participating Member States (to benefit from the possibility of unconditional cross-border loss deduction) rather than in non-participating Member States, but also trade primarily with already existing subsidiaries in participating Member States. Such a situation could affect the otherwise natural patterns of trade between the Member States. The response to this issue would be of crucial importance if the possibility of unconditional cross-border loss deduction became a prerequisite for CCBT to be chosen by businesses, as, in this case, CCBT allowing this would be proportionate to its objective. Although the ECJ in the Marks & Spencer case did not differentiate regarding the scope of the practices that it regarded as distortions, a response could be that, as long as the transfer of deductible losses to the jurisdiction in which they generated the highest tax value and/or the double deduction of losses were only negligible, these distortions would not be serious enough to prevent the introduction of CCBT by way of enhanced cooperation. This could be deduced by reading the Marks & Spencer case together with other parts of the acquis communautaire, for example, Art. 96 and Art. 97 of the EC Treaty. Such a position would, however, give rise to further questions regarding the criteria to be used in ascertaining when and/or whether or not these distortions would be negligible. This would probably require a comparison between situations regarding cross-border loss deduction within groups of which the parent company and the subsidiary were both in participating Member States and situations regarding cross-border loss deduction within groups of which the parent company was in a participating Mem-
18. See, for example, COM(2005) 532 final, note 2, pp. 5 and 8. 19. ECJ, 13 December 2005, Case C-446/03, Marks & Spencer plc v. David Halsey (Her Majesty’s Inspector of Taxes). For more on this case, see M. Lang, “The Marks & Spencer Case – The Open Issues Following the ECJ’s Final Word”, 46 European Taxation 2 (2006), pp. 54-67. 20. ECJ, 13 December 2005, Case C-446/03, Marks & Spencer plc v. David Halsey (Her Majesty’s Inspector of Taxes), Paras. 47 to 50. 21. See, for example, W. Schön, “The European Commission’s Report on Company Taxation: A Magic Formula for European Taxation?”, 42 European Taxation 8 (2002), p. 282.
© 2006 IBFD
MAY 2006
EUROPEAN TAXATION
ber State and the subsidiaries in a non-participating Member State. The cooperation of the non-participating Member States would be important in designing the criteria for this assessment. Conversely, the view could be taken that CCBT would have to, in no case, give rise to, within intra-EC groups of companies, the effects that the ECJ implicitly regarded as distortions in the Marks & Spencer22 ruling. In these circumstances, it could be argued that CCBT should allow unconditional cross-border loss consolidation with regard to branches and should limit the possibilities for cross-border loss deduction with regard to subsidiaries to the conditions set out in the Marks & Spencer case. Nevertheless, apart from the minor risk of being attractive to businesses, such CCBT rules could conflict with the principle in ECJ case law, under which the freedom to choose the legal form of a secondary establishment (a branch or a subsidiary) must not be distorted by tax provisions.23 This would paradoxically occur within those Member States adhering to a comprehensive approach intended to remove all the tax obstacles and distortions hindering cross-border business activities. 3.3. Structural benefits and non-discrimination In addition to the issue raised by cross-border loss relief (see 3.2.), the other “structural advantages” of CCBT could be expected to go beyond the already existing acquis communautaire. In other words, the Codes of Conduct on transfer pricing on reducing the risks of transfer pricing problems24 and for simplifying documentary obligations,25 and the amendments to the EC Parent-Subsidiary Directive26 and the EC Merger Directive27 together with the ECJ case law on the application of these Directives, have already reduced the risks of double taxation. Nonetheless, CCBT could be expected to allow eligible parent companies to eliminate completely both transfer pricing issues and the risk of double taxation in relation to dividend distributions, restructurings and interest and royalty payments. Consequently, another question would be whether or not these extra benefits that CCBT, even with rules as favourable as those of the non-participating Member States, would bring to eligible companies compared to (ineligible) companies based in any of the non-participating Member States, could conflict with the principles of non-discrimination and equal treatment. For example, assuming that Member State A did not participate in CCBT and Member States B did, the situation of parent company A, which was tax resident in Member State A and had subsidiaries and/or branches in Member State B, would have to be compared with that of an international parent company B (with secondary establishments throughout the European Community), which was tax resident in Member State B and was eligible to opt for CCBT. In Member State B, assuming that parent company B opts for CCBT, the secondary establishment of company A would be subject to rules that differ from those for parent company B, i.e. it would be subject to the national rules of Member State B regarding the determination of the tax base. This would apply both to any branch of parent company A and to any subsidiary of this company, unless the subsidiary was a subparent
191
that controlled other subsidiaries or had branches in other participating Member States. In this case, the subsidiary could opt for CCBT. If the latter were not the case and Member State B applied the same rules to secondary establishments of company A as to its companies with no secondary establishments in the European Community, differences between the treatment of the secondary establishments of company A in Member State B and those of company B would not arise if the CCBT rules were, globally, as favourable as those of Member State B for both national companies and secondary establishments of company A. Conversely, such a situation would arise if the CCBT rules were more favourable than those of Member State B. The ECJ case law regarding the general principles of EC law indicates that, unless there is an objective justification, both the Member States and the EC measures introducing the unequal treatment of comparable situations would breach the principle of equal treatment and non-discrimination.28 The relevant ECJ case law indicates that, in the situation in which a branch of company A in Member State B only generated a minor part of the group’s overall taxable profit, that secondary establishment would not be in a comparable situation with its parent company resident in Member State B.29 Comparability would, however, exist if this were not the case. It would also exist between a subsidiary of company A in Member State B and the parent company B also resident in Member State B. With regard to cases in which the situation of the secondary establishment of company A in Member State B and of parent company B were to be considered comparable under ECJ case law, the Commission could argue that the reason for the introduction of CCBT, i.e. the requirement to remove in a unified manner all the company tax obstacles to cross-border activity in the European Community under the tax strategy adopted since 2001, was, itself, an objective justification for CCBT. This is because CCBT would be more 22. This view could be based on the fact that the ECJ regarded provisions intended to prevent these practices, i.e. the possible transfer of losses to the jurisdiction in which they would generate the highest tax value and the double deduction of losses, as “overriding reasons in the public interest” justifying restrictions on the freedom of establishment. See ECJ, 13 December 2005, Case C-446/03, Marks & Spencer plc v. David Halsey (Her Majesty’s Inspector of Taxes), Para. 51. 23. ECJ, 28 January 1986, Case C-270/83, Commission of the European Communities v. French Republic (Avoir fiscal) [1986] ECR 273, Para. 22. 24. COM(2004) 297 final, 23 April 2004. 25. European Commission Press Release IP/05/1403, 10 November 2005. 26. Council Directive 2003/123/EC adopted on 22 December 2003, amending Council Directive 90/435/EEC, Official Journal (EC), L 7, 13 January 2004, pp. 41-44. 27. Council Directive 2005/19/EC adopted on 17 February 2005, amending Council Directive 90/434/EEC, Official Journal (EC), L 58, 3 March 2005, pp. 19-26. 28. For example, ECJ, 19 October 1977, Joined Cases 124/76 and 20/77, SA Moulins & Huileries de Pont-à-Mousson and Société coopérative Providence agricole de la Champagne v. Office national interprofessionnel des céréales [1977] ECR 1795, Paras. 16 and 17. 29. This derives from the application to companies, by analogy, of the Court’s decision in ECJ, 14 February 1995, Case C-279/93, Finanzamt Köln-Altstadt v. Roland Schumacker [1995] ECR I-225, Paras. 33-34. The Schumacker case dealt with an issue of principle, i.e. the status under EC law of the resident/non-resident distinction applied by all Member States in respect of direct taxation to interest paid to both natural persons and companies. See J. Wouters, “Fiscal barriers to companies’ cross-border establishment in the case-law of the EC Court of Justice”, Yearbook of European Law (1994), Vol. 14, p. 105.
© 2006 IBFD
192
EUROPEAN TAXATION
compatible with the achievement of the objectives of the EC Treaty than the coexistence of many different tax bases that created obstacles or disadvantages for the cross-border business activities in comparison to purely domestic ones. Such would be the case with the hypothesis under consideration.30 In fact, in this situation, the advantages of CCBT for companies with headquarters and secondary establishments in participating Member States compared to companies with headquarters in non-participating Member States and with secondary establishments in either participating or non-participating Member States would be limited to the structural benefits.31 Without these benefits, the Commission’s strategy for an Internal Market without company tax obstacles would be jeopardized. Under this premise, the Commission and/or Member State B could conclude that the different treatment to which the secondary establishments of company A in Member State B would be subject could be regarded as created not by the Member State of destination participating in CCBT, but by the Member State of origin, i.e. by Member State A. Specifically, Member State A, by non-participating in CCBT, would prevent the secondary establishments of company A in Member State B from benefiting from the CCBT rules that would be, on balance, as favourable as its own rules. Accordingly, the requirement for an objective justification would not arise in respect of Member State B. The difference in treatment in its jurisdiction would, therefore, “pass” the test of non-discrimination.32 3.4. Compliance with freedom of establishment, State aid and undistorted competition It would also be necessary to assess33 whether or not the impossibility for company A (in 3.3.) to opt for CCBT would: – hinder or make it less attractive the freedom of establishment for company A in Member State B; – result in an economic advantage being granted selectivity (State aid) to the eligible international companies resident in Member State B; or – distort competition. Although it would not make the exercise of the freedom of establishment of company A in Member State B through the creation of secondary establishments there, as attractive as it would have been had Member State A participated in CCBT, the refusal by Member State A to participate in CCBT in the example in 3.3. would not appear to make it less attractive under ECJ case law. In effect, the relationship between company A and its secondary establishments in Member State B would benefit from the amended EC tax directives, the soft law (such as the Code of Conduct on transfer pricing) and the ECJ’s case law that have removed, to a significant extent, the company tax obstacles identified by the Commission in the 2001 study on company taxation in the Internal Market.34 Accordingly, if Member State A did not set the “exit restrictions” identified by the ECJ,35 it would not hinder company A’s freedom to establish secondary establishments in Member State B. The decision by Member State A not to participate in enhanced cooperation would also imply the exercise of a right by that Member State and would, by definition, respect its fiscal competence.
MAY 2006
In turn, it would be difficult to consider the application of CCBT as State aid granted to international parent companies resident in Member State A and denied to secondary establishments of company A in Member State B. Specifically, the concept of State aid requires: – selectivity in favour of certain undertakings;36 – an economic advantage, strengthening the competitive position that a recipient undertaking operations would not have obtained under normal market conditions,37 the advantage in respect of which could also consist of the mitigation of charges normally included in its budget38 or of measures that would release the recipient from costs that it would normally have had to bear in its day-to-day management and normal activities, allowing the recipient to undertake operations that it would not otherwise have been able to carry out;39 and – the fact of being allowed by a Member State or by a public authority or private body over which the central government exercises, directly or indirectly, a dominant influence40 or a reduction in Member State revenues.41
30. That is, CCBT introduced by way of enhanced cooperation, which, even if more favourable than the rules regarding the tax base of a participating Member State, was on balance as favourable as those of the non-participating Member States. 31. That is, the complete elimination of the risks of double taxation and of transfer pricing problems, in addition to cross-border loss offsets. (See 3.2.) 32. The question of the compatibility with the principle of non-discrimination has been raised regarding the difference in treatment between an international parent company resident in Member State B and national companies resident in Member State B, the latter of which would be ineligible to opt for CCBT. (See, for example, Schön, note 21, p. 286.) This question could also be dealt with in the context of CCBT not introduced by way of enhanced cooperation. 33. With regard to the interpretation of the material requirements for enhanced cooperation. 34. See the Commission Staff Working Paper, “Company taxation in the internal market”, SEC(2001) 1681 final, which listed amongst the obstacles the risks of the double taxation of dividends, interest and royalties, transfer pricing problems, and the lack of cross-border loss relief. 35. Such as a refusal to allow a deduction of costs relating to its secondary establishments in Member State B (ECJ, 18 September 2003, Case C-168/01, Bosal Holding BV v. Staatssecretaris van Financiën [2003] ECR I-9401), making it less attractive to establish subsidiaries (or branches) in other Member States, or exit taxes (ECJ, 11 March 2004, Case C-9/02, Hughes de Lasteyrie du Saillant v. Ministère de l’Économie, des Finances et de l’Industrie [2004] ECR I-2409). 36. ECJ, 15 July 1964, Case 6/64, Flaminio Costa v. E.N.E.L. [1964] ECR 585, Para. “On the interpretation of Article 93”. 37. ECJ, 11 July 1996, Case C-39/94, Syndicat français de l’Express international (SFEI) and others v. La Poste and others [1996] ECR I-3547, Para 60; ECJ, 29 April 1999, Case C-342/96 Kingdom of Spain v. Commission of the European Communities [1999] ECR I-2459, Para. 41; and ECJ, 24 July 2003, Case 280/00, Altmark Trans GmbH, Regierungspräsidium Magdeburg v. Nahverkehrsgesellschaft Altmark GmbH, and Oberbundesanwalt beim Bundesverwaltungsgericht [2003] ECR I-7747, Para. 84. 38. ECJ, 15 March 1994, Case C-387/92, Banco de Crédito Industrial SA, now Banco Exterior de España SA v. Ayuntamiento de Valencia [1994] ECR I-877, Para. 13 and ECJ, 17 June 1999, Case C-75/97 Kingdom of Belgium v. Commission of the European Communities [1999] ECR I-3671, Para 23. 39. That is, operating aid. See ECJ, 14 February 1990, Case C-301/87, French Republic v. Commission of the European Communities [1990] ECR I-307, Paras 39-41. 40. For example, ECJ, 30 January 1985, Case 290/83, Commission of the European Communities v. French Republic [1985] ECR 439, Para 14 and Court of First Instance, 12 December 1996, Case T-358/94, Compagnie nationale Air France v. Commission of the European Communities [1996] ECR II-2109, Para. 56. 41. ECJ, 14 October 1987, Case 248/84, Federal Republic of Germany v. Commission of the European Communities [1987] ECR 4013, Para. 17.
© 2006 IBFD
MAY 2006
EUROPEAN TAXATION
In the situation in question, with regard to all competing undertakings (i.e. parent companies and secondary establishments), the structural advantages and the savings in compliance costs for eligible international companies resident in Member State B could, at least regarding those companies not enjoying a dominant position, be assumed not to strengthen, on their own, the market position of these companies compared to that of ineligible international companies resident in Member State A that are their competitors. This would be to the extent that the market position depends on several other factors, i.e. technology, consumers preferences, etc. The assessment of the effect on the competitive market position would, therefore, have to be limited to that of the different rules on the tax base of the secondary establishment of company A in Member State B. This could be quite difficult. Conversely, the economic advantage offered by CCBT rules more favourable than those of Member State B to international companies resident in Member State B in respect of (the secondary establishments of) company A in Member State B would result in a reduction in this Member State’s revenues. It would, however, be difficult to identify a selective character in this economic advantage generated by Member State B or by the Community measure introducing CCBT, none of which expressly excluded from CCBT the secondary establishment of company A in Member State B. The impossibility of benefiting from such advantages for this secondary establishment of company A would again depend on the decision of Member State A not to participate in CCBT. This would be a decision on which Member State B would exercise, either directly or indirectly, a dominant influence. If this is accepted, no distortion of competition between an eligible international company resident in Member State B and an ineligible international company resident in Member State A caused by State aid, as defined, could be identified in the application of CCBT to the tax base.42 This conclusion would not change if selectivity were considered to exist on the basis that the secondary establishment of company A in Member State B would be not included in the scope of CCBT. It should, in fact, be remembered that, according to ECJ case law, an exemption from charges arising from the normal application of the general tax system is State aid if no justification exists for such an exemption on the basis of the nature or general scheme of a tax system.43 An exemption from the normal application of an element of a general tax system (the national rules of Member State B on the tax base), which would benefit international companies resident in Member State B (due to opting for CCBT) and not the secondary establishment of company A in Member State B, could be justified by the fact that the participation of Member State B in CCBT by way of enhanced cooperation would inevitably cause an option for CCBT to be part of the tax system of Member State B. Nevertheless, with regard to any State aid implied in CCBT, a further question could arise in respect of another possible aspect of differences of treatment. Specifically, the agreement between the Member States participating in CCBT regarding the “apportionment formula”,44 under which each Member State should tax a share of the overall tax base calculated
193
under CCBT, could cause the share of the overall profits of an eligible multinational group allocated to a permanent establishment (PE) in a participating Member State to be more or less than the share of the overall group taxable profit (the parent company plus the PE) had the relevant Member States decided not to participate in CCBT. The CCBT Working Group has recognized that double taxation, irrespective of the existing treaties network, should not occur in respect of CCBT, as the tax base would be calculated in common and consolidated under one set of rules.45 Tax treaties would, however, retain their function as a means for avoiding double taxation between participating and non-participating Member States. The allocation of a share of the overall taxable group profits to the non-participating Member State of the location of a PE of a parent company, as a result of the application of a tax treaty, would not normally be based on an apportionment formula. This would only be used in exceptional cases.46 Accordingly, the allocation of the share to a secondary establishment in a participating Member State, to the extent that it was based on an apportionment formula agreed by the Member States, would introduce a new element in the allocation of taxing rights, which, without CCBT, would otherwise only be based on tax treaties applied by taking into consideration merely the activities of the PE. For example, assume the following. In a participating Member State, the share of the overall group taxable profits allocated to the PE of a company with headquarters in another participating Member State is less, because of the apportionment formula, than that of the overall taxable profits that are, de facto, allocated to a PE of a company with headquarters in a non-participating Member State.47 Also assume that the two PEs would have been allocated the same share of the group taxable profits had CCBT not been introduced. In this situation, it could, again, be asked whether or not there would be an element of selectivity typical of State aid 42. In contrast, the issue regarding the distortion to competition by means of possible State aid resulting from CCBT rules more favourable than those of Member State B could be analysed between eligible international companies resident in Member State B and ineligible national companies resident in the same Member State and between different categories of eligible international companies (large companies versus smaller companies) resident in Member State B. This would also be true for CCBT not introduced by enhanced cooperation, in which all the Member States participated. (See L. Cerioni, “The Introduction of Comprehensive Approaches to Business Taxation: At the Root of Competition and Discrimination Dilemmas or … The Long and Winding Road to a Solution? Part 2”, 46 European Taxation 1 (2006), pp. 21-22.) 43. ECJ, 2 July 1974, Case 173-73, Italian Republic v. Commission of the European Communitie [1974] ECR 709, Para. 15. 44. The need for an apportionment formula to allocate the overall tax base between the Member States in which an international group opting for CCBT is located was highlighted by the Commission in COM(2003) 726 final, “Towards an Internal Market without tax obstacles. achievements, ongoing initiatives and remaining challenges”, p. 21. 45. Document of the Working Group (CCCTB/WP/019) on international aspects of the CCBT, pp. 5-6, Para. 15 and p. 8, Para. 21. 46. Id., p. 11, Para. 30 highlights this aspect of the common systems of the allocation of taxing rights that result from the OECD Model Convention (hereinafter: the OECD Model). 47. It is possible to refer solely to a “de facto” allocation, as a formal allocation of the share of the overall group profits to the PE could be not assumed to have been made because of the common taxation of the PE only on the basis of the activities it performed in the Member State of location.
© 2006 IBFD
194
EUROPEAN TAXATION
regarding the taxation, at the same tax rate, of the PE of the company with headquarters in another participating Member State in respect of a minor share of the overall group tax base compared to the PE of a company with headquarters in a non-participating Member State. This would arise as a result of the application of the apportionment formula. Specifically, suppose that the Member State in which the two PEs were located had a higher corporate tax rate than that of both the participating Member State and the non-participating Member State. In this case, the advantage that the situation would create for the PE of the company in the participating Member State compared to the PE of the company in the non-participating Member State would be evident. The issue of whether or not treaty clauses may contain the selectivity element typical of State aid has also been considered.48 In this situation, however, the advantage to the PE of the company with headquarters in another participating Member State would be caused not by a tax treaty, but by what could be regarded as an exception (the allocation of a share of the overall group taxable profits according to the apportionment formula) to the otherwise natural result of the allocation of taxing rights by means only of a tax treaty. Consequently, it could be argued that the different treatment of the two PEs in the (host) Member State participating in CCBT would, in this Member State, be a case of “horizontal” difference in treatment between non-resident companies. It is, therefore, doubtful, given the present state of ECJ case law, whether or not this difference in treatment would be relevant under EC law if it was not caused by the application of a tax treaty.49 If this difference in treatment were regarded as irrelevant under EC law, no element of State aid could be identified. If, however, the advantage in favour of the PE of the company with headquarters in another participating Member State were considered to be selective, doubts could arise as to whether or not this aspect of the different treatment, caused not by the CCBT rules on the tax base by themselves but by the apportionment formula, could be justified (so allowing it not to be regarded as State aid) on the basis of the nature of the tax system of the Member State of location of the two PEs. The response would be negative if the advantage would not have existed had a different apportionment formula been applied. The result would be that the advantage would constitute State aid. In turn, the State aid would have to be justified on the basis on Art. 87(3) of the EC Treaty. In the hypothesis under consideration, this could be problematic. For instance, could a justification based on the “execution of an important project of common European interest” under Art. 87(3)(b) of the EC Treaty be successfully invoked if the selective effect would have been avoided using a different apportionment formula? To avoid these problems, the cooperation of the non-participating Member State would be important in assessing whether or not a situation, such as that in question,50 could arise. With regard to the assessment of whether or not there would be a distortion of competition caused by factors other than State aid, the “competition rules” in the EC Treaty (and the related the secondary legislation and ECJ case law) indicate that distortion may be caused
MAY 2006
by the strengthening of the market position of an undertaking compared to that of its competitors by means of restrictive business practices, with no counterbalancing socio-economic benefits51 or by an abuse of a dominant position.52 Whereas restrictive businesses practices could be implemented or not,53 in the hypothesis under consideration54 the strengthening of a dominant position of major undertakings in Member States participating in CCBT and competing with undertakings in non-participating Member States could be possible because of the financial resources made available by the savings in compliance costs and the structural tax benefits. According to ECJ case law, the strengthening of a dominant position, even if there is no link of causality, is deemed to constitute an abuse if it has the effect of substantially restricting competition.55 It is possible to identify another effect that conflicts with the intention of that part of the acquis communautaire allowing better treatment for SMEs than for larger enterprises56 and that aggravates the fact, of which the Commission is aware, that company tax obstacles have a greater (negative) effect for SMEs than for larger companies.57 The ultimate effect would be that international large companies eligible to opt for CCBT due to their location in participating Member States would be treated better than international SMEs in non-participating Member States. This disadvantage for these SMEs would also appear to be difficult to reconcile with the requirement for general corporate tax rules that were neutral from the viewpoint of competition, i.e. which did not directly affect the functioning of the Internal Market. Such a requirement could be deduced from Art. 94 of the EC Treaty, from the secondary legislation, where it is expressly stated in the Preambles of the tax directives,58 and from soft law.59 48. See, for example, C. HJI Panayi, “Limitation on Benefits and State Aid”, 44 European Taxation 2/3 (2004), pp. 83-98 and the subsequent critique by R.H.C. Luja, “Tax Treaties and State Aid: Some Thoughts”, 44 European Taxation 5 (2004), pp. 234-238. 49. See G.W. Kofler and C.P. Schindler, “‘Dancing with Mr. D’: The ECJ Denial of Most-Favoured-Nation Treatment in the ‘D’ case”, 45 European Taxation 12 (2005), p. 537. 50. That is, the allocation of a greater share of the overall taxable profits of a group with headquarters in the non-participating Member State to a PE in a participating Member State than is allocated in the latter Member State, due to the application of the apportionment formula, to a PE of a group with headquarters in another participating Member State. 51. Art. 81 EC Treaty. 52. Art. 82 EC Treaty. 53. And an assessment of the market position of eligible businesses in participating Member States, at the time of their application for inclusion in the scope of CCBT, would be appropriate to identify these practices. (See 3.4.) 54. That is, CCBT rules as favourable as those of a non-participating Member States, and the eligibility of companies of all sizes and legal forms. 55. ECJ, 21 February 1973, Case 6-72, Europemballage Corporation and Continental Can Company Inc. v. Commission of the European Communities [1973] ECR 215, Summary, Para 13. 56. See the Regulation on State aid to SMEs, note 12. 57. COM(2005) 532 final, note 2, p. 6. 58. See the Preambles to both the EC Parent-Subsidiary Directive and the EC Merger Directive, first Recital, which states the requirement for tax rules that are neutral from the viewpoint of competition with reference to the aspects of the corporate tax systems of the Member State that these are intended to approximate. 59. See the Preamble to Commission Recommendation 94/390 of 25 May 1994 in Official Journal (EC), L 177, 9 July 1994 on the taxation of SMEs, seventh Recital, and the Commission Notice on the application of the State aid rules to measures relating to direct business taxation, 98 C, Official Journal (EC), C/384, 10 December 1998, pp. 3-9, Point A) of the
© 2006 IBFD
MAY 2006
EUROPEAN TAXATION
Finally, companies constituted as a European Company (Societas Europaea, SE) with headquarters in non-participating Member States could still have tax disadvantages and restrictions in comparison with companies under a national legal form with headquarters in participating Member States. This would be despite the fact that, paradoxically, an SE has as its main objective that of making cross-border restructurings and reorganizations on a Community basis (and not within a group of Member States) easier than it would be using national legal forms.60 Such a situation could be regarded as a further distortion, as it would conflict with the intention of EC legislation. 3.5. Cooperation on part of non-participating Member States It could be argued that, to limit the distortions considered in 3.2. to 3.4., i.e. at least to make them negligible, an ex ante assessment at the time of application of eligible companies for inclusion in the scope of CCBT by the tax authorities of the participating Member States and/or the Commission would be appropriate, as for CCBT adopted by all the Member States and as previously argued by the author.61 To assess the comparative position of eligible companies in respect of ineligible companies (in non-participating Member States), the collaboration of the tax authorities of the non-participating Member States would be important. An agreement would also be appropriate between participating and non-participating Member States.62 For instance, these Member States would have to allow companies (both SMEs and larger companies) resident in Member States participating in CCBT to compute the taxable profits of branches or subsidiaries in their jurisdiction according to CCBT rules rather than under national ones. In other words, this would be to accept an “extraterritorial” application of CCBT with regard to these secondary establishments that would not harm their financial interests if CCBT were, on balance, as favourable as their national rules. The financial interest of the non-participating Member States would also be unaffected to the extent that the CCBT apportionment formula would not apply to the secondary establishments of eligible companies in their jurisdictions. In the absence of such a collaborative approach,63 further problems could (or be more likely to) arise. For example, in the context of a group strategy, subsidiaries created in non-participating Member States of parent companies in participating Member States could transfer their “place of central administration and management”, i.e. their tax residence under the normal treaty tiebreaker rules,64 to a participating Member State so as to permit the group to benefit fully from CCBT. Such a transfer would be possible on the basis of the ECJ case law on the freedom of establishment.65 Even if this were motivated so as to benefit from CCBT, the Member State(s) of origin could find it difficult to place restrictions on the transfer by arguing that it is motivated by “wholly artificial arrangements designed to circumvent national law”.66 This would be to the extent that its choice not to participate in CCBT was not in line with the Commission’s strategy that is intended to remove all company tax obstacles for allowing businesses to exploit fully the benefits of the Internal Market.
195
4. CONCLUSIONS The issues considered in this article are only some of the possible ones raised by the hypothesis of CCBT introduced by way of enhanced cooperation. They could also be regarded as additional to many other issues to be highlighted by the forthcoming work of the CCBT Working Group. These issues evidence, however, that this strategy, even if it could comply with some parts of the acquis communautaire, i.e. non-discrimination and the freedom of establishment, could give rise to problems of compatibility with other parts, either directly, for example, with regard to cross-border loss compensation without the limitation set by the ECJ, or indirectly, when, for example, its effect could conflict with the intention of secondary legislation. The issues also highlight that any attempt to resolve these problems would have to involve a collaborative approach between participating and non-participating Member States. On the part of the latter, this would require going beyond mere abstention. Accordingly, the early introduction of CCBT between some Member States could still be the best option, provided that a collaborative approach with non-participating Member States was possible. As a result of the experience gained by means of this approach, more time and effort could be successfully devoted to the Notice, “Community powers of action”, No. 6. The Commission Recommendation, which refers to the distortions of competition between enterprises, due to direct tax provisions, to the detriment of the smallest enterprises represented by sole proprietorships and partnerships, offers no reason why it should not be read as expressing a general principle whereby tax provisions cannot place smaller enterprises, in general, at a disadvantage with regard to larger enterprises. It should be noted that the Commission Notice directly refers to the power to eliminate distortions created by general tax measures. 60. Council Regulation (EC) No. 2157/2001 of 8 October 2001 on the Statute for a European Company, Preamble, Recital (1). 61. L. Cerioni, “The Introduction of Comprehensive Approaches to Business Taxation: At the Root of Competition and Discrimination Dilemmas or … The Long and Winding Road to a Solution? Part 1”, 45 European Taxation 12 (2005), p. 557, and Cerioni, note 42, p. 23. 62. In which case the assumptions formulated at the beginning of 3.1., that a parent company in a participating Member State could include in CCBT those subsidiaries and branches in another participating Member State, and not those in a non-participating Member State, and that a parent company in a non-participating Member State could not benefit from CCBT with regard to its subsidiaries and branches in a participating Member State would have to be relaxed. 63. An approach that could also be useful in resolving the issue, identified by the document of the Working Group, note 45, p. 8, Para. 21, is that of considering whether or not the profits of secondary establishments in participating Member States of companies tax resident in non-participating Member States should be taxed according to the CCBT rules on the determination of the tax base. 64. This would apply when the registered office and the “place of central management and control” were in two different Member States under the standard terms of the tax treaties entered into by most Member States in accordance with the OECD Model. 65. As may be deduced from ECJ, 11 March 2004, Case C-9/02, Hughes de Lasteyrie du Saillant v. Ministère de l’Économie, des Finances et de l’Industrie [2004] ECR I-2409. With regard to this, see E.G. Sanchez and J.F. Fluxà, “Problems and Options in Calculating the Tax Base of Companies in the European Union under Home State Taxation”, 46 European Taxation 5 (2006) pp.197-207 and R. Deininger, “ECJ 30 September 2003 – Case C-167/01 – Kamer van Koophandel en Fabrieken voor Amsterdam v. Inspire Art, Case Comment”, The European Legal Forum (2004), Issue 1, p. 18. 66. This is the requirement set out in the ECJ tax case-law justifying restrictions to the freedom of establishment. See, for example, ECJ, 12 December 2002, Case C-324/00, Lankhorst-Hohorst GmbH v. Finanzamt Steinfur, [2002] ECR I-11779, Para. 36.
© 2006 IBFD
196
EUROPEAN TAXATION
later introduction of CCBT by all of the Member States. This would, however, only be after all of the Member States had been convinced that the objective
MAY 2006
of the strategy, which would also benefit companies in their jurisdiction, could not otherwise be achieved.
Cumulative Index ARTICLES Belgium Marcel Gerard: Belgium Moves to Dual Allowance for Corporate Equity European Union Luca Cerioni: – The Introduction of Comprehensive Approaches to Business Taxation: At the Root of Competition and Discrimination Dilemmas or ... The Long and Winding Road to a Solution? – Part 2 – The Possible Introduction of Common Consolidated Base Taxation via Enhanced Cooperation: Some Open Issues Rob Cornelisse, Dennis Weber, Ronald Wijs and Gerard Blokland: – Proposal for a Uniform EU REIT Regime – Part 1 – Proposal for a Uniform EU REIT Regime – Part 2 Katalin Csikós: Energy Taxation – An Analysis of the EU Energy Taxation Directive with Special Reference to Hungary and the Benelux Member States Dr Elena González Sánchez and Juan Franch Fluxà: Problems and Options in Calculating the Tax Base of Companies in the European Union under Home State Taxation Christiana HJI Panayi: – Treaty Shopping and Other Tax Arbitrage Opportunities in the European Union: A Reassessment – Part 1 – Treaty Shopping and Other Tax Arbitrage Opportunities in the European Union: A Reassessment – Part 2
156
13 187
3 68
208
197
Prof. Dr Michael Lang: The Marks & Spencer Case – The Open Issues Following the ECJ’s Final Word
54
France Bruno Gibert: Developments Regarding the French Ruling Procedures
94
International Hans Pijl: – The OECD Commentary as a Source of International Law and the Role of the Judiciary – The Zero-Sum Game, the Emperor’s Beard and the Authorized OECD Approach
216 29
Poland Gregory Kujawski: General and Specific Anti-Avoidance Provisions in Polish Tax Law
163
Dr Adam Zalasiński: Polish Direct Tax Provisions Potentially Incompatible with EC Fundamental Freedoms
225
Spain Alejandro García Heredia: Copyright and Software and Spanish Tax Treaties: An Issue of Balance between TechnologyImporting and Technology-Exporting Countries Switzerland/European Union Marcel R. Jung: Art. 15 of the Switzerland-EC Savings Tax Agreement: Measures Equivalent to Those in the EC Parent-Subsidiary and the Interest and Royalties Directives – A Swiss Perspective
104 159 © 2006 IBFD
36
112
[to be continued on page 207]
