International Taxation and Tax Rulings: Policy Issues at Challenging Times

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Category: Tax Transparency
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On April 28, 2016 the European Parliament’s Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE 2) organized a workshop on TAXE 2 studies. On June 13, 2016 TAXE 2 published attached analysis was published titled: “International Taxation and Tax Rulings: Policy Issues at Challenging Times". The 4 external experts and authors of the reports: John Vella, Elly van de Velde and Raymond Luja.

Are We Moving in the Right Direction?
Public Disclosure of Tax Information & Other EC/EP Proposals to Reduce Aggressive Tax Planning

“The proposals put forward by the European Parliament and the European Commission to reform the international tax system fall into two categories.The proposals in the first category patch up the existing system, that in the second category is more radical.

The above analysis suggests that reforms in the first category might make a difference to current aggressive tax planning structures, however they will not fix the major flaws of the international tax system.

One particular concern is that they might even intensify competition on corporate tax rates. A long-term stable solution thus requires more radical reform. The European Parliament and the European Commission have put forward one such reform option, the CCCTB. This has clear benefits but also some well-known issues.

For this reason, the search for radical reform solutions ought to be broadened to include the consideration of other options which have been the subject of academic study over the past few years.”

The Future of Tax Rulings in the EU: Evaluation, Confrontation and Recommendations

“The establishment of a common framework at EU level for tax rulings is the ultimate recommendation to achieve the goal of ‘cooperation and coordination of advance tax rulings’.

Transparency is very key in the development of an adequate EU framework, but at the same time one should assure that transparency for citizens does not conflict with the protection of tax secrecy of the assessment procedure.”

EU State Aid Law and National Tax Rulings: 2015-2016 Update

“This author has some reservations in respect to the EP’s recommendation to let the Commission issue new guidelines on what constitutes tax-related state aid or not.

In the end this is the prerogative of the CJEU. It may indeed be useful to have guidelines like these, but only if it can be guaranteed that the Commission will not put forward its own views on unsettled issues as not to harm the procedural rights of either taxpayers or their competitors, as a notice containing such guidelines could give rise to legitimate expectations preventing recovery.

There is also a serious risk of such notice contradicting or not covering past cases, which will raise issues of legal certainty of its own. As for asking the Commission to explain what ‘appropriate’ transfer pricing is, this may go beyond the scope of its state aid powers depending on how detailed this guidance may be.”

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