Commission v. Belgium Gramlich, John
The International lawyer,
2019, Letnik:
52, Številka:
1
Journal Article
Recenzirano
Article 63 TFEU must be interpreted as precluding legislation of a Member State on the taxation of income of residents of that State, such as that at issue in the main proceedings, in so far as it is ...liable to lead, when a progressivity clause contained in a convention for the prevention of double taxation is applied, to a higher rate of tax on income merely because the method for determining income from immovable property results in income deriving from immovable property that is not rented out situated in another Member State being assessed at a higher amount than income from such property situated in the first Member State.14 It is for the referring court to ascertain whether that is in fact the effect of the legislation at issue in the dispute in the main proceedings.15 In response, Belgium argues that the two methods of determining income complies with Article 63 TFEU and Article 40 of the EEA agreement because freedom of capital movement is still guaranteed.16 Therefore, the question of whether the two different methods of determining tax rates actually results in higher tax consequences for income derived from property located abroad is for the CJEU to determine.17 II.Legal Background: Free Movement of Capital The European Union was initially established "to stabilize political and economical issues and to unify the law of diversed states and established four freedoms: free movement of capital, free movement of services, free movement of people and free movement of goods. "23 But the European Union does establish "temporary safeguard measures to be taken" in Articles 65 and 66 TFEU if a country can show "serious difficulties for the operation of economic and monetary union," or to prevent violation of national law particularly regarding taxation.24 Article 65(1) allows for different tax treatment of Member State residents and foreign investment, but it cannot be a means of arbitrary discrimination.25 Article 65(1)(a) "must be interpreted strictly" and cannot "be interpreted as meaning that all tax leg, Article 63 TFEU must be interpreted as precluding legislation of a Member State on the taxation of income of residents of that State, such as that at issue in the main proceedings, in so far as it is liable to lead, when a progressivity clause contained in a convention for the prevention of double taxation is applied, to a higher rate of tax on income merely because the method for determining income from immovable property results in income deriving from immovable property that is not rented out situated in another Member State being assessed at a higher amount than income from such property situated in the first Member State.14 It is for the referring court to ascertain whether that is in fact the effect of the legislation at issue in the dispute in the main proceedings.15 In response, Belgium argues that the two methods of determining income complies with Article 63 TFEU and Article 40 of the EEA agreement because freedom of capital movement is still guaranteed.16 Therefore, the question of whether the two different methods of determining tax rates actually results in higher tax consequences for income derived from property located abroad is for the CJEU to determine.17 II.Legal Background: Free Movement of Capital The European Union was initially established "to stabilize political and economical issues and to unify the law of diversed states and established four freedoms: free movement of capital, free movement of services, free movement of people and free movement of goods. "23 But the European Union does establish "temporary safeguard measures to be taken" in Articles 65 and 66 TFEU if a country can show "serious difficulties for the operation of economic and monetary union," or to prevent violation of national law particularly regarding taxation.24 Article 65(1) allows for different tax treatment of Member State residents and foreign investment, but it cannot be a means of arbitrary discrimination.25 Article 65(1)(a) "must be interpreted strictly" and cannot "be interpreted as meaning that all tax legislation which draws a distinction between taxpayers based on... the State in which they invest their capital is automatically compatible with the Treaty. "27 In Verest and Gerards, two Belgium residents appealed the dismissal of their prior action against the Court of First Instance, Antwerp, about adjustments that Belgian tax authorities made to their tax declaration in 2005 regarding tax consequences to their property located in France.28 As noted by the court, "Member States retain competence for determining the criteria for taxation on income and capital with a view to eliminating double taxation. "36 Under Article 63 TFEU, case law has established that a country may prove that legislation is in the country's best public interest regardless of conflicts with European Union law by putting forth sufficient evidence.37 But in Commission v. Belgium, Belgium did not provide enough evidence to prove such interest.38 Therefore, the court correctly held there is no overriding public-interest justification to treat income derived from property abroad differently than income derived from property at home.39 Case law establishes that Member States rarely are awarded the ability to infringe on European Union law by restricting free movement of capital for public-interest reasons.40 Belgium must present sufficient evidence of an "overriding reason... to justify the restriction on the free movement of capital within the meaning of Article 63 TFEU" to prove a public-interest exception applies.41 The fact that Belgium did not purport any argument about lower tax consequences on owners of property located in Belgium versus property located abroad establishes that there was not any overriding public-interest reason to conflict with Article 63 TFEU.42 Providing lower tax.
The report on the scientific conference “Recent and Pending Cases at the Court of Justice of the European Union on Direct Taxation”) is presented in the paper. The conference took place on November ...8-10, 2018 at Vienna University of Economics and Business. Conferences on the EU Court of Justice decisions in the field of direct taxation have been held in Vienna annually since 2007. The most relevant topics at the 2018 conference were: increased understanding of state aid and the obligations of national courts to notify the European Commission; fiscal unity; taxation of dividends paid by non-residents; taxation of personal income; taxation of income from capital withdrawal; beneficial ownership issues; group taxation issues.
The OECD Model Tax Convention provides the basis for the negotiation and interpretation of more than 3000 tax treaties that make up a network that co-ordinate the income and corporate tax systems of ...most countries with the objective of removing tax barriers to cross-border trade and investment. This publication is the ninth edition of the condensed version of the OECD Model Tax Convention on Income and on Capital . This shorter version contains the full text of the Model Tax Convention on Income and on Capital as accepted on 15 July 2014, but without the historical notes, the detailed list of conventions between OECD member countries and the background reports that are included in the full-length version, which will appear soon. Changes appearing in this edition address such issues as Exchange of Information (Article 26), the meaning of beneficial owner (Aricles 10, 11 and 12), the treatment of sportsment and entertainers (Article 17), treatment of termination payments and other technical issues.
The New Zealand Government had been facing increasing criticism for its failure to address the imbalance in the housing market. In particular the Government was criticised for the consequent ...inability to provide New Zealanders affordable housing, especially in Auckland. The media had
often pointed the finger at the increasing number of residential properties being sold to non-residents. Equally, there has been considerable speculating in land and this has been seen as a further cause of the economic distortion in the residential property market. The National Party, and
in particular then Prime Minister John Key, had continually denied there was any problem with the New Zealand housing market. Then in 2015 there was a massive policy reversal with one of the stated purposes being to ensure non-residents are paying their "fair share" of tax. On 17 May 2015
the Government delivered a significant taxation reform package as part of Budget 2015, containing four interrelated measures. While the new measures affect all vendors and purchasers, they are particularly aimed at "offshore persons". It is the taxation of offshore persons that is the core
of this article. Specifically, the article considers the international tax implications of the new "bright line" measures in this regard. This includes a discussion of the sharing of information with other countries, nonresidents purchasing residential property in New Zealand pursuant to New
Zealand's network of double tax agreements (DTAs) and tax information exchange agreements (TIEAs). Importantly, it considers New Zealand's taxing rights in relation to the capital proceeds from the sale of residential land under the relevant distributive articles in its DTAs. Finally, it suggests
that the focus of the new measures on offshore persons may breach non-discrimination articles in some of New Zealand's DTAs.
Romania has concluded two conventions for the avoidance ofdouble taxation on estate and inheritance tax during the interwar period.Since one of these conventions is still in force and the ...difficulties caused bythe burdens resulting from inheritance tax in cross-border situations are ofgreat importance to the proper functioning of the EU and of the internalmarket, this short article aims to compare the solutions proposed by the 1928Draft Convention for the Prevention of Double Taxation in the SpecialMatter of Succession Duties and the conventions concluded by Romania in1932 and 1934, considering that at some point our legislator may want toreintroduce an inheritance tax.
This Chapter proposes a systemic analysis framework and uses the positioning of Australia within the global competitive market system, the performance of the domestic economy and the operation of ...Australia's company tax regime as testing grounds. It seeks to demonstrate how policymakers, tax administrators and tax professionals can better understand and manage the complexity of issues that are arising by using the framework to identify and address the underlying structural causes of problems and identifying when and to what extent tax policy settings can make a difference. As a context for this analysis the Chapter presents an overview of how Australia taxes cross-border direct investment and the policy rationale for that approach.
The ATO's 2013-14 and 2014-14 Reports of Entity Tax Information show a significant number of companies operating in Australia that have significant amounts of income but are reporting no taxable ...income or tax payable150. The facts in SNF (Australia) Case151 depict a situation where, despite good sales performance, the Australian entity carrying on business as a manufacturer, marketer and distributor in the mining, paper and sewage treatment industries and purchasing polyacrylamide products from offshore associates reported losses in each of the seven income years from 1998 to 2004. The structural loss picture created by the case appears commercially unrealistic. It raised important public policy issues about ensuring that entities given access to Australian markets are able to be effectively taxed on the contribution made by Australian operations through the functions performed, assets used and risks assumed, calculated by reference to arm's length rates of return.
Yet such arguments are typically made in the context of discussions of how to tax (multinational) corporations. Because of the long-standing controversies-which many would say may never be ...resolved-surrounding the normative foundations of corporate income taxation itself,2 it is a formidable task to articulate the appropriate directions for changing the policies for, and discourses regarding, international taxation in the context of corporate taxation. ...the terms "residence" and "domicile" as factual concepts have different meanings in different jurisdictions.10 However, being a "resident" is also often used to capture the very idea of a person subject to taxation on his or her worldwide income. ...Article 4(1) of the U.S. Model Income Tax Convention defines the term "resident of a Contracting State" as meaning "any person who, under the laws of that Contracting State, is liable to tax therein by reason of his domicile, residence, citizenship, place of management, place of incorporation, or any other criterion of a similar nature. ...income tax laws tend to classify income much more finely than they classify taxable persons, because, even in purely domestic settings, the character of income is used to track a wide assortment of considerations about how to measure both the quantity and timing of income and how to apply differential tax treatment to them. The Diamond-Mirrlees framework, by contrast, assumes that there is only one government and one budget constraint. Because Keen and Wildasin accept-as seems the only reasonable thing to do-that the existence of binding national budget constraints is an essential feature of international public finance, they go on to develop a different theoretical framework to characterize Pareto-efficiency in the international context.
The four appellant companies (Bywater Investments Limited, Chemical Trustee Limited, Derrin Brothers Properties Limited and Hua Wang Bank Berhad) disputed their liability to Australian income tax on ...the basis that their central management and control was exercised in foreign countries (three of the companies in Switzerland, and the fourth in Samoa), and that they were not therefore 'resident' in Australia within the meaning of section 6(1) of the 'Income Tax Assessment Act 1936' (Cth). The Full Court of the Federal Court of Australia had found that the central management and control of each of the companies was exercised in Australia, and that they were resident in Australia for income tax purposes. The Full Court accepted the findings of Perram J at first instance that all the companies were in reality controlled by Vanda Gould, a resident of Sydney, and were therefore resident in Australia. The companies appealed to the High Court.
...permanent expatriates found themselves for the first time required by their local bank to file tax returns and Report of Foreign Bank and Financial Accounts (FBAR) disclosures. In his opinion, the ...key problem is not that the globalization of economic activities makes the traditional policy tools outdated; instead, it is that scholars and policymakers have more frequent occasions to disagree about the normative goals of international taxation. ...he claims, most current controversies (including the one about FATCA and citizenship taxation) are actually about the articulation of ends and not the adequacy of means. ...Ed Zelinsky offers a defense of the U.S. practice of citizenship-based taxation. According to Zelinsky, domicile today plays an important role in state tax systems as a gap-filler when more objective statutory residence laws fail to assign any state of residence to the taxpayer.
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