Base Erosion and Profit Shifting (BEPS)

Transcription

1 Robert Danon (ed.) Base Erosion and Profit Shifting (BEPS) Impact for European and international tax policy Tax policy

2 Robert Danon (ed.) Base Erosion and Profit Shifting (BEPS) Impact for European and international tax policy

3 Tax policy Series edited by Robert Danon, professor of Swiss and international tax law at the University of Lausanne (Switzerland)

4 Robert Danon (ed.) Base Erosion and Profit Shifting (BEPS) Impact for European and international tax policy

5 Please refer to as: Robert Danon (ed.), Base Erosion and Profit Shifting (BEPS) Impact for European and international tax policy, Tax Policy Series, Geneva/Zurich 2016, Schulthess ISBN Schulthess Médias Juridiques SA, Geneva Zurich Basel All Rights Reserved No part of the material protected by this copyright notice may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval system, without written permission from the copyright owner. Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the Internet at

6 Preface In 2015, the G20/OECD delivered its long awaited final reports relating to the Base Erosion and Profit Shifting (BEPS) Project. Whether they entail a binding framework or simply consist in recommendations, these deliverables are of paramount importance to all OECD and European Member States. The BEPS agenda is an ambitious one: despite national policy differences (for example between capital import and capital export countries), a supranational framework implementing coherence, substance and transparency is to be put in place with a view to achieve a «level playing field». For multinational groups, in particular, the new framework is expected to lead to more centralized business models. At the level of the European Union, the BEPS action plan is also being mirrored by comparable initiatives designed to achieve «fairer, simpler and more effective corporate taxation» within the internal market. The Anti Tax Avoidance Package released in January 2016 expresses this political will. Moreover, several recent high profile cases and investigations have marked an (re)evolution of State aid rules, which competition lawyers could probably never have predicted a few years ago. While these developments support the eradication of what is now called «aggressive tax planning», tensions however do exist between this policy objective and the fundamental freedoms. This raises the question of whether the intended international level playing field will actually be able to be achieved or whether, in the end, a different and more favorable framework will apply between EU Member States. A possible fragmentation of the BEPS initiative, or to say it in French «un projet BEPS à deux vitesses», is beginning to capture serious critical attention. This book, which includes the contributions of renowned experts of the «international family», aims at fuelling the ongoing debate and at offering a global perspective to policy makers. For this purpose, key actions of the BEPS agenda are critically reviewed. Further, particular attention is also paid to the foregoing developments taking place within the European Union. Accordingly, the relation between the BEPS actions items and the fundamental freedoms, the Anti-Tax Avoidance Package and the evolution of State aid rules are discussed.

7 VI Preface The editor would like to thank the contributors for embarking on this project a few years ago and for having accepted to cope with what was (and still is) very much a «moving target». We would also like to thank Mrs. Lea Fame, tax researcher at the University of Lausanne, for her meticulous editorial review of all contributions. Robert Danon Lausanne, July 2016

8 List of Authors Dr. Jorun K. Baumgartner, Research Fellow at the University of Lausanne Peter H. Blessing, Managing Director (Washington National Tax), KPMG LLP, New York City Prof. Dr. Yariv Brauner, Professor at the Levin College of Law, University of Florida Natassia Burkhalter, LL.M, Policy Advisor at the State Secretariat for International Financial Matters (SIF) Vikram Chand, LL.M, Executive Director, Master of Advanced Studies in International Taxation, University of Lausanne Stefaan De Baets, Senior Counsel, PricewaterhouseCoopers Tax Consultants, Brussels Prof. Dr. Luc De Broe, Professor of European and International Tax Law at KU Leuven, Holder of the Deloitte Chair in International & EU Tax Law Elizabeth Gil García, Researcher at the University of Alicante Dr. Charlène Adline Herbain, Postdoctoral researcher at the Catholic University of Leuven, Senior Lecturer of VAT Law at the University of Luxembourg, Lecturer of VAT Law and International Contract Law at the University of Nancy 2 Błażej Kuźniacki, PhD Research Fellow at the University of Oslo, associate at law firm PATH Augustyniak, Hatylak & Partners LLP Prof. Dr. Jürgen Lüdicke, Professor of German and International Tax Law at the University of Hamburg, Partner, PricewaterhouseCoopers Prof. Dr. Guglielmo Maisto, Professor of Tax Law at the Catholic University of Piacenza, Founding Partner, Maisto e Associati Prof. Dr. Xavier Oberson, Professor of Swiss and International Tax Law at the University of Geneva, Partner, Oberson Abels Prof. Dr. Pasquale Pistone, Professor of European and International Tax Law at WU Vienna and at the University of Salerno, IBFD Academic Chairman Conor Quigley Q.C., Serle Court, Lincoln s Inn, London

9 VIII List of Authors Pierpaolo Rossi-Maccanico, Attorney at Law, Senior Legal Expert at European Commission's Legal Service, Antitrust & Mergers Team, EU Commission Dr. Jessica Salom, LL.M, Attorney at Law, Head of Section Transfer Pricing at the State Secretariat for International Financial Matters (SIF) Hugues Salomé, Partner, PricewaterhouseCoopers Christoph Schelling, Ambassador, Head of Tax Division, State Secretariat for International Financial Matters (SIF) Prof. Dr. Edoardo Traversa, Professor of Belgian, European and International Tax Law at the Catholic University of Leuven, of Counsel, Liedkerke Prof. Dr. Andreas R. Ziegler, Professor of International Economic and International Public Law at the University of Lausanne

10 List of Authors IX Table of Contents Preface... List of Authors... Table of Contents... V VII IX CHRISTOPH SCHELLING, DR. JESSICA SALOM AND NATASSIA BURKHALTER Overview of the Base Erosion and Profit Shifting Project... 1 ELIZABETH GIL GARCÍA Implementation of the Modified Nexus Approach Under the Spanish Patent Box Regime PROF. DR. JÜRGEN LÜDICKE The BEPS Work on Hybrid Mismatches - Selected Issues HUGUES SALOMÉ BEPS Action 2 Treaty Provisions on Hybrid Entities PROF. DR. YARIV BRAUNER The Bad, the Worse and the Ugly : BEPS Action Items 2 and BŁAŻEJ KUŹNIACKI Strengthening CFC Rules in a Compatible Way with EU Law under BEPS Action 3 in Light of the European Commission s Proposal A Critical Evaluation PROF. DR. GUGLIELMO MAISTO EU and OECD Convergence on International Tax Standards Focus on Aggressive Tax Planning and Its Foreseeable Future Developments 173 PROF. DR LUC DE BROE Tax Treaty and the EU Law aspects of the LOB and PPT provision proposed by BEPS Action

11 X Table of contents VIKRAM CHAND Interaction of Domestic General Anti-Abuse Measures with Tax Treaties PROF. DR. EDOARDO TRAVERSA AND DR. CHARLÈNE HERBAIN General Assessment of BEPS and EU law: Hybrids Mismatches, Interest Deductions, Abuse of Tax Treaties and CFC Rules PROF. DR. PASQUALE PISTONE BEPS, Capital Export Neutrality and the Risk of Hidden Tax Protectionism. Selected Remarks from an EU Perspective PETER H. BLESSING Preventing the Artificial Avoidance of PE Status STEFAAN DE BAETS Transfer Pricing (Intangibles and Documentation) CONOR QUIGLEY Q.C. Differential Tax Treatment, Tax Rulings and EU State Aid Law PIERPAOLO ROSSI - MACCANICO Fiscal State Aids and BEPS: Navigating Troubled Waters PROF. DR. XAVIER OBERSON International Exchange of Information on Rulings PROF. DR. ANDREAS R. ZIEGLER AND DR. JORUN K. BAUMGARTNER The Tax Controversy between Switzerland and the European Union Relating to the 1972 Free Trade Agreement

12 In 2015, the G20/OECD delivered its long awaited final reports relating to the Base Erosion and Profit Shifting (BEPS) Project. The BEPS initiative aims at putting in place a «level playing field» founded on coherence, substance and transparency. At the level of the European Union, the BEPS action plan is also being mirrored by comparable initiatives designed to achieve «fairer, simpler and more effective corporate taxation» within the internal market. The Anti Tax Avoidance Package released in January 2016 expresses this political will. Moreover, several recent investigations have marked an (re)evolution of State aid rules. While these developments support the eradication of what is now called «aggressive tax planning», tensions however do exist between this policy objective and the fundamental freedoms. This raises the question of whether the intended international level playing field will actually be able to be achieved or whether, in the end, a different and more favorable framework will apply between EU Member States. Hence, a possible fragmentation of the BEPS initiative is beginning to capture serious critical attention. This book, which includes the contributions of renowned experts of the «international family», critically discusses key BEPS actions items and also puts them into perspective with EU law, in particular the fundamental freedoms and State aid rules. ISBN