GAARs and Judicial Anti-Avoidance in Germany, the UK and the EU

Transcription

1 Schriftenreihe zum Internationalen Steuerrecht GAARs and Judicial Anti-Avoidance in Germany, the UK and the EU Schriftenreihe IStR Band 98 Bearbeitet von Markus Seiler 1. Auflage Taschenbuch. 374 S. Paperback ISBN Format (B x L): 15,5 x 22,5 cm Steuern > Internationales Steuerrecht Zu Leseprobe schnell und portofrei erhältlich bei Die Online-Fachbuchhandlung beck-shop.de ist spezialisiert auf Fachbücher, insbesondere Recht, Steuern und Wirtschaft. Im Sortiment finden Sie alle Medien (Bücher, Zeitschriften, CDs, ebooks, etc.) aller Verlage. Ergänzt wird das Programm durch Services wie Neuerscheinungsdienst oder Zusammenstellungen von Büchern zu Sonderpreisen. Der Shop führt mehr als 8 Millionen Produkte.

2 fb-gaars_seiler Vol 98.book Seite VII Mittwoch, 8. Juni :39 13 Preface... V List of abbreviations... XVII A. Introduction Background Terminology Tax evasion Tax avoidance and tax mitigation Scope of the study Point of departure Bringing GAARs into play The comparative approach and the research question Structure of the study... 9 B. Judicial anti-avoidance Introduction Judicial anti-avoidance in Germany Introduction The traditional view: Formal and literal interpretation Major tax reform Adoption of the economic perspective and introduction of a GAAR Consequences of the reform Counteracting abuse using the GAAR Counteracting abuse by way of interpretation (and other means) The tax reform was successful Further development National Socialist excesses under the guise of the statutory interpretation Developments after 1945: (re-)adoption of the economic perspective The economic perspective as a means of teleological interpretation The status quo: Sec 42 Fiscal Code Seiler, GAARs and Judicial Anti-Avoidance VII

3 fb-gaars_seiler Vol 98.book Seite VIII Mittwoch, 8. Juni : Introduction in Amendment in Amendment in 2008 and present state The legal relevance of Sec 42 Fiscal Code Two ways to deal with abuse The concept of Innentheorie The concept of Außentheorie Tax law and the mechanism of analogy More than just two theories Regarding the controversy and function of Sec 42 Fiscal Code Judicial anti-avoidance in the UK Introduction The traditional view: Literalism and formalism (The Duke of Westminster) The pillars of the Duke of Westminster The Duke of Westminster The Duke of Westminster put to the test Literal interpretation and form vs. substance: A myth is born The interim view: The uncertainty of Ramsay Initial remarks Artificial, circular and self-cancelling transactions: W.T. Ramsay Ltd. v IRC Facts of the case and the taxpayer s view Two ways to deal with the case The House of Lords approach The House of Lords alternative suggestion Ramsay confirmed: IRC v Burmah Oil Facts of the case and the taxpayer s view The House of Lords approach Step transaction test: Furniss v Dawson Facts of the case and starting situation Ramsay as a transaction based anti-avoidance approach The impacts of Furniss v Dawson Ramsay at a dead end: Craven v White Facts of the cases Limiting the impacts of Ramsay Ramsay as an approach to statutory construction? The status quo: Ramsay as an approach to statutory interpretation VIII Seiler, GAARs and Judicial Anti-Avoidance

4 fb-gaars_seiler Vol 98.book Seite IX Mittwoch, 8. Juni : The rediscovery of statutory construction: McGuckian v IRC Facts of the case and the taxpayer s view The House of Lords approach Ramsay as a principle of statutory construction: MacNiven v Westmoreland Facts of the case and the taxpayer s view The House of Lords approach Ramsay as a principle of statutory construction confirmed: BMBF Facts of the case and the taxpayer s view The House of Lords approach Statutory construction can be difficult Making use of various methods of interpretation Mayes v HMRC ( SHIPS 2 ) as a reason for the introduction of the GAAR HMRC v DCC Holdings: What if? Judicial anti-avoidance in the EU Introduction Development of an abuse test Emsland Stärke Was it necessary to set up an abuse test? The pillars of Emsland Stärke Different approaches? There was no need to set up an abuse test in Emsland Stärke Implications of the abuse test No influence in the short run No influence in the short run also in the field of VAT Very influential in the long run Abuse in the field of VAT Halifax Facts of the case and questions referred to the Court Adopting the abuse test in the field of VAT There was no need to adopt the abuse test Implications of the objective test Implications of the subjective test Cases adopting the Halifax abuse test Part Service and Weald Leasing Objective test and tax advantage Subjective test Seiler, GAARs and Judicial Anti-Avoidance IX

5 fb-gaars_seiler Vol 98.book Seite X Mittwoch, 8. Juni : Legal consequences New focus: Wholly artificial arrangements in the field of VAT Change of focus Wholly artificial arrangements in respect of the relevant statute Abuse in the field of direct taxation Cadbury Schweppes Facts of the case and questions referred to the Court Question of justification or question of scope? Preventing the creation of wholly artificial arrangements Proportionality of the restriction and no subjective test Shifting the emphasis towards proportionality Bringing Halifax and Cadbury Schweppes together Further development of the case law New focus: Wholly artificial arrangements in primary law Requirements for a restriction to be proportional The Court s approach in Cadbury Schweppes and Thin Cap The Court s approach in further cases A uniform concept of abuse? C. Comparison of the GAARs Introduction The way to the GAARs and identifying common elements The way to the GAAR in Germany The GAAR has a long lasting history Statutory requirements and the courts approach The way to the GAAR in the UK The failed attempt to introduce a GAAR in the late 1990s Aaronson Report Background of the Aaronson Report Main findings of the Aaronson Report General Anti-Avoidance Rule or General Anti-Abuse rule? Aaronson s GAAR The UK GAAR Introduction of a general anti-abuse rule Statutory requirements X Seiler, GAARs and Judicial Anti-Avoidance

6 fb-gaars_seiler Vol 98.book Seite XI Mittwoch, 8. Juni : The importance of the GAAR Guidance The way to the GAAR in the EU The pillars of the EU GAAR CCCTB Proposal: The first EU GAAR initiative Article 80 CCCTB and the influence of the ECJ The EU GAAR Recommendation of an EU GAAR Requirements of the EU GAAR Practical importance: The EU GAAR and domestic GAARs Practical importance: The EU GAAR and the PSD GAAR and the BEPS GAAR Identifying common requirements Overview of the common requirements The idea behind the various requirements Arrangements covered Taxes covered Objective test Common elements The objective test in the German GAAR Starting point Leaving the application of Sec 42 Fiscal Code open Using Sec 42 Fiscal Code as a starting aid The objective test in the UK GAAR Starting point Indicators of abuse Indicators of abusive arrangements (Sec 207 (4) FA 2013) Indicator of a non-abusive arrangement (Sec 207 (5) FA 2013) Drawing the line between use and abuse: Examples of the GAAR Guidance Examples where the GAAR does not apply The arrangement is in line with the statutory requirements The contrived or abnormal arrangement is in line with the statutory requirements Examples where the GAAR applies on grounds of Sec 207 (2) (a) FA Examples where the GAAR applies on grounds of Sec 207 (2) (c) FA Further development of the law Seiler, GAARs and Judicial Anti-Avoidance XI

7 fb-gaars_seiler Vol 98.book Seite XII Mittwoch, 8. Juni : The GAAR and Mayes (SHIPS 2) Counteracting arrangements using the instruments of teleological reduction and analogy Lessons learnt from the examples The importance of the various GAAR elements The objective test as an approach to statutory interpretation The objective test as a reminder of having to properly interpret the law The objective test in the EU GAAR The objective test is not flawless The objective test will be applied differently Conclusion: An objective test can be valuable Subjective tests Common elements Subjectivity in the German GAAR Subjectivity in the UK GAAR Subjectivity in the EU GAAR Starting point The EU GAAR reveals weaknesses Subjectivity is present on various layers Arrangement test What it is about and the difference from the objective test (In)appropriateness: The arrangement test instead of the objective test Starting point Inappropriate and appropriate arrangements Non-tax reasons to rebut the inappropriateness Arrangements that have the effect of offsetting or cancelling each other Overall plan Interposition of persons Arrangements and the expectation of a reasonable business conduct The arrangement test must be rejected Artificiality: The arrangement test in addition to the objective test Starting point Artificial The arrangement test must be rejected XII Seiler, GAARs and Judicial Anti-Avoidance

8 fb-gaars_seiler Vol 98.book Seite XIII Mittwoch, 8. Juni : Purpose test Main or essential purpose of the arrangement or the person? The purpose test must be rejected Tax advantage The idea behind the tax advantage The presence of the tax advantage The subjectivity of the tax advantage Requiring a tax advantage must be rejected Double-reasonableness test What is it about The double-reasonableness test must be rejected Conclusion: Subjective tests must be rejected Summary of the critique Solution Legal consequences Basing taxation on a fictional arrangement Reconstruction poses serious problems Consequential adjustments D. Valuation of the GAARs Introduction Judicial anti-avoidance Points of departure in the UK and in Germany Resembling starting positions: The legal form is decisive Contrasting developments: Various methods of interpretation vs. literal interpretation Tax reform in Germany No action taken in the UK Developments around the Second World War Developments in the post-war years Reasons for these divergent developments The relationship of tax law with other fields of law Liberalism and social reasons Victorian values and background of the judges Common law and influence of academics Parliamentary sovereignty, legal certainty and the rule of law Consequence: Different drafting of tax legislation EU Law: Adding another layer of complexity Abuse was a latecomer in EU law Judicial anti-avoidance in European law Seiler, GAARs and Judicial Anti-Avoidance XIII

9 fb-gaars_seiler Vol 98.book Seite XIV Mittwoch, 8. Juni : All roads lead to Rome Counteracting abuse on grounds of a judicially developed GAAR? The initial uncertainty of Ramsay and the concept of Außentheorie Ramsay did not develop into a judge-made GAAR Counteracting abuse as a matter of interpretation? Common elements: Transaction based anti-avoidance Germany: Counteracting abuse should only be a matter of interpretation UK: Counteracting abuse is a matter of interpretation EU: Counteracting abuse should return to a matter of interpretation Development of similar ways to counteract abuse by interpretation Summary Influence of other countries on the UK Influence of the ECJ on UK courts Substance-over-form and the economic perspective (wirtschaftliche Betrachtungsweise) Substance-over-form approach from a German court s perspective Economic perspective (wirtschaftliche Betrachtungsweise) from a UK court s perspective Statutory anti-avoidance (GAARs) Common elements inherent in the GAARs Drawing the line between abusive and non-abusive arrangements The GAARs only codify what courts already did Reasons for introducing and suggesting the GAARs To raise revenue and for political reasons To compensate legislative cowardice Overly complex tax systems as a source of tax avoidance Tax systems do not have to be perfect GAARs as a result of legislative cowardice To compensate judicial and administrative shortcomings in statutory interpretation Methods of interpretation and the complexity of the tax system XIV Seiler, GAARs and Judicial Anti-Avoidance

10 fb-gaars_seiler Vol 98.book Seite XV Mittwoch, 8. Juni : Applying various methods of interpretation can be difficult GAARs as a tool to compensate shortcomings in interpretation What remains at the end? What is claimed to be achieved What is achieved GAARs leading to a simpler tax system? A GAAR alone does not make the tax system simpler Legislators may contribute to the simplification of a tax system GAARs reducing the uncertainty surrounding the case law? Uncertainty is a result of overly complex tax systems GAARs can contribute to legal uncertainty and inequality GAARs can be detrimental to the legal culture The finding of an abusive arrangement is a matter of interpretation GAARs may have an adverse effect on the legal culture Is there even a remaining scope for GAARs? GAARs as reminders of having to interpret the law Making interpretation possible E. Summary Starting position The courts approach The GAARs approach Valuation of the GAARs F. Annex Overview of the common requirements of the German, UK and EU GAAR German GAAR (author s translation) Sec 4 and 5 Reich Fiscal Code Sec 6 Fiscal Adjustment Act Sec 42 Fiscal Code in the version of 1977and Sec 42 Fiscal Code in the version of Seiler, GAARs and Judicial Anti-Avoidance XV

11 fb-gaars_seiler Vol 98.book Seite XVI Mittwoch, 8. Juni : UK GAAR EU GAAR EU GAAR: Commission Recommendation on Aggressive Tax Planning PSD GAAR BEPS GAAR G. Bibliography XVI Seiler, GAARs and Judicial Anti-Avoidance