February/March 2016  
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Issue No. 2/3 - 2016 of the European Taxation is now available online.

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Number 2/3 - 2016 contains the following:

ARTICLES

Germany

The Impact of Article 9 of the OECD Model on German Taxation

Martin Weiss

This article describes recent case law of the German Federal Tax Court on the relationship between article 9(1) of the OECD Model and German domestic tax law that demonstrates a clear trend towards denying income adjustments under domestic law pursuant to article 9(1). Taxpayers need to be aware of the impact of this provision, in particular, on the application of the transfer pricing rule, section 1 of the Foreign Transactions Tax Act, and on hidden distributions.   

European Union/International

Cross-Border Rulings: Direct and Indirect Taxation

Evgenia Kokolia and Theodora Lazaretou

The authors analyse the different approaches to transparency of rulings regarding cross-border transactions in respect of both direct and indirect taxation. They consider that the enhanced transparency and model approach to VAT and cross-border rulings could also apply in respect of direct taxation and acknowledge that the political agreement reached on 6 October 2015 on the Directive for automatic exchange of information on cross-border rulings is a step in the right direction.

Switzerland

The Tax Treatment of Severance Payments Made in a Cross-Border Context – A Swiss Perspective

Christine Ledure

The tax treaty treatment of severance payments in relation to private employment in a cross-border context is described in this article. Qualification and allocation issues are examined, including the inherent risks of double taxation or double non-taxation in relation to such issues. Subsequently, the author highlights new developments brought about in the OECD Model (2014) and related Commentary on this topic and assesses the strengths and shortcomings of these developments. Finally, Switzerland is used as an example.

Netherlands/International

Will the Netherlands Threshold for Levying Taxes on PEs Be Lowered by Proposed Changes in Line with BEPS Action 7: Preventing the Artificial Avoidance of PE Status?

Hendrik-Jan van Duijn and Rocco O. IJsselmuiden

The authors provide an overview of the Netherlands permanent establishment (PE) concept and address the question of the extent to which the OECD-proposed changes to the PE concept, as per article 5 of the OECD Model, will result in the Netherlands threshold for levying taxes on PEs being lowered.

 

EU UPDATE

Commission

Laura Ambagtsheer-Pakarinen

Council
Laura Ambagtsheer-Pakarinen

 

 

CFE NEWS
Opinion Statement ECJ-TF 2/2015 on the Decision of the European Court of Justice in European Commission v. United Kingdom (“Final Losses”) (Case C-172/13), Concerning the “Marks & Spencer Exception”
CFE ECJ Task Force

 

Opinion Statement ECJ-TF 3/2015 on the Decision of the European Court of Justice in C.G. Sopora (Case C-512/13), on “Horizontal Discrimination”
CFE ECJ Task Force

WHAT'S GOING ON IN ...

Belgium

Tax Shelter for Start-Ups

Thomas Goemaere and Frank Hoogendijk

The authors describe an attractive set of incentives that have been enacted for start-ups, including a tax reduction granted in respect of the acquisition of new shares issued by start-ups, a withholding tax exemption on interest from loans provided to start-ups and a partial exemption from the requirement for a company to remit wage withholding tax to the Treasury.

European Union/International

Countering Harmful Tax Practices: BEPS Action 5 and EU Initiatives – Past Progress, Current Status and Prospects

Howard M. Liebman, Werner Heyvaert and Valérie Oyen

The authors of this note discuss the interplay between the OECD’s BEPS Action 5, which addresses the detection and coordinated countering of harmful tax practices through a renewed focus on both transparency and substance requirements, and work being undertaken at the EU level to build on the results of the BEPS project.

Germany

Cross-Border Information – The German Approach

Anette Kugelmüller-Pugh

This note, presented at the 6th Assembly of the International Association of Tax Judges, which took place in Lucerne (Switzerland) on 4 and 5 September 2015, examines the German provisions regarding cross-border information exchange.

Netherlands

A Summary of Information Obligations of Netherlands Taxpayers, in Particular with Regard to Information from Abroad

Ed A.G. van der Ouderaa

This note, presented at the 6th Assembly of the International Association of Tax Judges, which took place in Lucerne (Switzerland) on 4 and 5 September 2015, examines the Netherlands provisions regarding cross-border information exchange.

Poland

In Dubio Pro Tributario – A New Old Rule under Polish Tax Law

Katarzyna Bronżewska

The author looks briefly at the in dubio pro tributario rule recently introduced into Polish tax law, questions the necessity of its introduction into the law and highlights problems that may arise in its application.

Romania

The 2016 Revised Tax Code: A Milestone in the History of Romania’s National Tax System

Oana Popa

This note describes the most significant amendments introduced by the revised Tax Code, effective 1 January 2016.

Spain

Are Monetary Donations to Foreign Foundations Taxable in Spain?

Hector Gabriel de Urrutia Coduras

In articles on international taxation of philanthropy, one question that always arises is whether a donor making a donation to a foreign non-profit entity should benefit from a tax incentive. The tax consequences for the foreign non-profit entity in the donor’s country of residence are, however, usually forgotten. This article addresses this question, the answer to which depends on whether a tax treaty applies.

United Kingdom

Finance (No. 2) Act 2015

Douglas Roxburgh

The Summer Finance Bill 2015 was made law as the Finance (No. 2) Act 2015 on 18 November 2015. This note covers those provisions of the Act that are of most relevance and importance for tax practitioners dealing with business matters and provides section references for the remainder.

OFFICIAL JOURNAL OF THE CONFÉDÉRATION FISCALE EUROPÉENNE