February/March 2018  
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European Taxation
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Issue No. 2/3 - 2018 of the European Taxation is now available online.

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Number 2/3 - 2018 contains the following:

European Union

EU Tax Haven Blacklist – Is the European Union Policing the Whole World?

Vinod Kalloe

The author, in this article, places the recent EU tax haven blacklist into the context of a longstanding initiative of European institutions to promote EU principles of fair tax competition beyond Europe in order to combat harmful corporate tax practices. Moreover, by including OECD standards on tax transparency and base erosion and profit shifting in the screening criteria, the European Union has lent impetus to the push towards global compliance with the OECD BEPS Inclusive Framework.


Rules Restricting the Scope of Utilization of Interest Expenses for Tax Purposes

Thomas Booker

Interest expenses are, as a general rule, deductible. However, sections 11, 11B and 11C of the Danish Corporation Tax Act introduce rules restricting the scope of interest expense deduction, etc. in certain instances. This article provides a general outline of the rules, focusing on a number of practical issues commonly encountered.

European Union

The Freedom of Establishment and Recapture of PE Losses under the Merger Directive

Marjon den Toom and Harm van den Broek

Recent ECJ case law addresses situations in which PE losses are recaptured at the head office level following a cross-border reorganization pursuant to which a PE is wound up or transferred to a different company. This article examines whether the recapture rule, under article 10(1) of the Merger Directive (2009/133), restricts the freedom of establishment and, if so, whether a justification applies. Does a recapture go beyond what is necessary to attain the objectives pursued?


Permanent Establishment Taxation in Germany in a Post-AOA-Implementation Era: A Primer on Exceptions and Problem Areas

Sven Hentschel, Gerhard Kraft and Till Moser

This article examines the implementation of the Authorized OECD Approach in Germany, which is problematic, as most German tax treaties are not based on the current article 7 of the OECD Model, potentially resulting in a mismatch in treatment of PEs from a domestic law versus treaty perspective. To remedy this, Germany has enacted an escape clause. This article classifies Germany’s tax treaties, providing a taxonomy of treaties falling under the purview of the escape clause in particular contexts.


Centralization of Intangibles and Transfer Pricing under BEPS and Finnish Tax Law

Seppo Penttilä and Anita Isomaa-Myllymäki

This article discusses principal and holding company structures used by MNE groups, in particular those related to intangibles, including an assessment of such structures under the arm’s length principle of the OECD Transfer Pricing Guidelines and Finland’s domestic transfer pricing legislation. The article examines the pressure to change existing structures as a result of the OECD BEPS Project.

EU Update
Oana Popa


Oana Popa

Opinion Statement ECJ-TF 3/2017 on the Decision of the Court of Justice of the European Union of 16 May 2017 in Berlioz Investment Fund SA (Case C-682/15), Concerning the Right to Judicial Review under Article 47 of the EU Charter of Fundamental Rights in Cases of Cross-Border Mutual Assistance in Tax Matters

CFE ECJ Task Force

This CFE Opinion Statement, submitted to the European Institutions in November 2017, comments on the ECJ decision in Berlioz Investment Fund SA (Case C-682/15).


European Union/Greece

Withholding Taxation and the EU Fundamental Freedoms: Greek Source Taxation of Service Fees

Anna Manitara

This article discusses a recent amendment to the Greek Income Tax Code, extending a withholding tax exemption in respect of certain service fees to non-Greek EU service providers. It provides an overview of ECJ case law on the matter of withholding taxation and issues raised under EU law. The questionable aspects of the Greek legislation – now amended – are then examined in light of the responses given by the Court. The article concludes that withholding tax still raises questions in the Single Market.


Selected Recent Italian Tax Court Decisions on Transfer Pricing

Francesco Avella

This note provides an overview of selected recent Italian tax court decisions on transfer pricing. “Hot topics” covered include the significance of the arm’s length range, the application of the arm’s length principle to non-interest-bearing shareholder loans and the burden of proof in transfer pricing cases.

European Union

Tax Relief Granted to “Private-Social” Organizations and State Aid Rules: A Difficult Balance Following Betania (Case C-74/16)

Stefano Dorigo

This article examines the applicability of State aid rules to tax incentives granted to non-commercial entities that serve a social function. In particular, the decision in Betania (Case C-74/16) is discussed, wherein the Court found that the exemption from municipal tax for buildings owned by ecclesiastical entities and used for educational purposes was subject to the EU State aid rules, which has narrowed the freedom of Member States to decide on the basic features of their tax system in these areas.


Pro Rata Deduction of Negative Income from Income Received in Each Member State

Hannelore Niesten

This note explores the ECJ’s decision in X v. Staatssecretaris van Financiën (Case C-283/15), wherein the Court held that denying a self-employed non-resident taxpayer, who receives 60% of his income from the Netherlands, a deduction for interest expenses related to his dwelling in another Member State when that taxpayer does not receive sufficient income in that Member State to qualify for such a deduction, is contrary to the freedom of establishment.

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