An EU concept under which member states are not allow to artificially keep alive businesses that cannot survive without aid from the state.
In a little more than one week we saw a series of judgments and a European Commission decision that may again test the limits of the European Union’s state aid system in its application to matters of direct taxation. On March 7, 2019 the Commission started a formal state aid investigation into the tax deduction…
Lawyers across Europe holding their breath while awaiting the General Court’s ruling on the Belgian Excess Profits case were doubtlessly disappointed. On Valentine’s Day, the General Court reminded the European Commission that “tough love” is always a possibility, but the Commission’s defeat is no mortal blow. Its decision was annulled on more or less “technical”…
Following three years of investigation, McDonald’s has been cleared from the charge that it received fiscal state aid from Luxembourg, by virtue of the European Commission’s concluding decision of 19 September 2018. Thus, the Commission seems to have closed one of the various fronts opened in the fiscal state aid area in the last five…
The Tax Court of Canada decision in Alta Energy Luxembourg S.A.R.L. v. The Queen, 2018 TCC 152 (CanLII) on August 22, 2018 may provide useful pointers to the meaning and application of the PPT found in Article 7(1) of the MLI and Article 29(9). A Luxembourg resident company claimed exemption from Canadian income tax under…
An analysis from a State Aid perspective. This contribution focuses on the profit split methodology in light of current EU Commission’s investigations in the area of tax rulings and transfer pricing[1]. Prior to my points, I shall make some brief preliminary comments to set the scene. According to the EU Commission a tax ruling confers…
Much changed in the world of taxation the last couple of years. The OECD started and finished the BEPS (Base Erosion and Profit shifting) project. The objective of BEPS was to develop rules that would prohibit multinational enterprises to implement tax avoiding structures or tax evasive set-ups. The EU investigated the tax structures of Apple,…
The European Union’s Court of Justice finally rendered its judgement in the famous Banco Santander and Autogrill cases on 21 December 2016. For state aid specialists and tax lawyers this decision was bound to be a landmark case whatever way it would turn out. In this decision the Court essentially had to decide on the…
To refresh memories, several months ago I posted part 1 of this study on Kluwer’s International Tax Blog: Application of TNMM to Starbucks Roasting Operation: Seeking Comparables Through Understanding the Market Part 1 briefly describes my advocated transfer pricing approach drawn from my transfer pricing law treatise and my corresponding research based upon it. My…
An important question in the context of the recovery of fiscal state aid, is how the amount of the tax advantage to be recovered should be calculated. Recently, the Dutch legislator released a draft legislative proposal on the recovery of state aid. The starting point taken in this draft proposal is that the taxpayer should…
Tax practitioner’s in the northern hemisphere taking their summer holidays may well have included the OECD discussion draft of 5 July 2016 on the attribution of profits to permanent establishments as part of their holiday reading (a mere 40 pages). See post on July 21, 2016. Over 50 organisations and individuals submitted comments(published by the…
If the UK leaves the EU, this would have immediate consequences for direct taxation.[1] We saw in the first post that the EU fundamental freedoms, EU provisions on State aid and EU directives and regulations (also those on direct taxation) would automatically cease to apply to the UK. Referring back to the second post on…
the world is full of black and grey hat tax administrations. The U.S. has the opportunity to leverage its power as the world’s safe (tax) haven for bi-lateral information exchange as a carrot – stick policy tool to clean them up, and move them to become white hat, best practices tax administrations.
Harmonisation of the efforts to discourage tax avoidance in the EU Recently, besides the objective of maintaining a balanced allocation1 (a reflection of the principle of territoriality), the imperative of restoring trust in the fairness of tax systems has been gaining terrain as a possible justification for restrictions of free movement rights2. The Member States…
On June 27, 2016 the EU Commission published the long awaited Starbucks State Aid decision (see here). The EU Commission’s decision challenges the outcome of the Advanced Pricing Agreement (APA) between the Netherlands Tax Authority (Tax Authority) and Starbucks Manufacturing BV (SMBV), a wholly owned and controlled coffee roasting operation. Below is the Part I…
