This work focuses on the Commission Recommendation of 06.12.2012 on aggressive tax planning C(2012) 8806 final. It aims to analyse the concepts and definitions underlying the Recommendation, its legal basis and its impact on the EU, international, academic and professional debate about aggressive tax planning.
The discussion works through a thorough literature review covering primary and secondary EU law, ECJ jurisprudence, political announcements of the OECD and other international organisations. Detailed tables summarise the key issues discovered.
The Recommendation has been neither unanimously adopted, nor rejected by the public. It provides broad definitions already addressed in a more precise manner in other official publications. Its approach against double non-taxation is similar to that of the ECJ and its GAAR proposal has gained ground with regard to the recent OECD announcements. The main criticism arises from the academia: the Recommendation is considered to be too general and to deviate widely from the established methodologies.
The scope of the Recommendation lies on direct taxation of business activity which precludes analysis of indirect taxes as well as statutory wrongs like harmful tax competition or state aid.
The study enriches the academic publicity on the Recommendation that has experienced only modest coverage by the taxation scholarship following its release.
Table of Contents
1. Introduction
2. Methodology
3. Limitations
4. Discussion and analysis
4.1 The Recommendation explained
4.2 The legal basis for the Recommendation
4.3 The Recommendation in light of the ECJ jurisprudence
4.4 The Recommendation and the OECD publicity
4.5 The acceptance in academic and professional literature
5. Conclusion
6. Appendix
Tables 1 - 15
7. List of references
7.1 Academic and professional literature
7.2 Statutory and political announcements
7.3 Table of cases
Objectives & Topics
This work evaluates the Commission Recommendation of 06.12.2012 on aggressive tax planning (C(2012) 8806 final), analyzing its underlying concepts, legal basis, and its broader impact on European and international tax debates. The research examines the effectiveness of the Recommendation and its consistency with existing ECJ jurisprudence and international OECD initiatives.
- Analysis of the definition and core concepts of Aggressive Tax Planning (ATP) within the Recommendation.
- Evaluation of the legal basis for the Commission’s action under EU law.
- Comparative analysis of the Recommendation against ECJ jurisprudence and OECD standards on tax avoidance.
- Critical review of the academic and professional reception of the proposed measures.
Excerpt from the Book
4.1 The Recommendation explained
To begin with, one may ask for the nature of the Recommendation, the legal status of the document and its background, why the Commission might have chosen this route to turn to the Member States. Whereas the legal issue is quite formal, the question of why is not so obvious and is not raised by the statutory procedures, but rather by the contents of the Recommendation.
The focus of the Recommendation is the ATP in direct taxes. The Commission considers national measures against ATP and measures to secure the tax revenue to be ineffective, not at least because planning and transactions take place cross-border, leaving the national sovereignty behind them. Therefore, the Commission encourages the Member States to take “the same general approach”.
Two malpractices in the field of direct taxation are considered responsible for the distortions, namely double non-taxation and abuse of rights.
In case of double non-taxation, the Commission criticises the inconsistencies of double taxation conventions (DTCs) and of the taxing behaviour of the Member States. The Commission gives two examples of such inconsistencies: some States waive their right to tax without taking into account, whether the income concerned is subject to tax in the partner jurisdiction. Besides DTCs, double non-taxation may occur, if States “unilaterally exempt items of foreign income”, again without taking into consideration the treatment in the source State. The taxpayer’s efforts to benefit from these bilateral or unilateral taxation practices are seen by the Commission as “engineering its tax affairs”, which must be addressed. The ultimate goal of the course of action recommended is to avoid “artificial” movements of capital and individuals, damaging the functioning of the internal market, as well as the tax base erosion of the States concerned.
Summary of Chapters
1. Introduction: This chapter introduces the Commission Recommendation on aggressive tax planning and highlights the complex, heterogeneous legal context it aims to address.
2. Methodology: This section outlines the research approach, including a literature review of EU law, ECJ jurisprudence, and OECD announcements to evaluate the Recommendation.
3. Limitations: This chapter clarifies that the study focuses on direct taxation of business activities, explicitly excluding indirect taxes, fraud, and state aid.
4. Discussion and analysis: This main part examines the nature and content of the Recommendation, its legal basis, consistency with ECJ rulings, alignment with OECD publicity, and reception in professional literature.
5. Conclusion: This final chapter synthesizes the evaluation, concluding that the Recommendation is a broad document that serves more as a "brick" in the defensive wall against tax avoidance rather than a transformative milestone.
6. Appendix: The appendix provides a comprehensive set of tables summarizing EU and international publications, specific definitions of ATP, and technical criteria for identifying aggressive tax schemes.
7. List of references: This section compiles the academic literature, statutory texts, and court cases cited throughout the research.
Keywords
Aggressive Tax Planning, ATP, European Commission, Direct Taxation, Double Non-Taxation, Abuse of Rights, GAAR, OECD, BEPS, EU Law, ECJ Jurisprudence, Tax Avoidance, Tax Base Erosion, Corporate Taxation, Fiscal Coordination.
Frequently Asked Questions
What is the primary subject of this research?
This work focuses on the European Commission Recommendation of 06.12.2012 concerning aggressive tax planning, analyzing its content, purpose, and impact.
What are the central themes discussed in the work?
The central themes include double non-taxation, abuse of rights, the legal status of Commission recommendations, and the coordination of tax policies within the EU and globally.
What is the main objective of the study?
The objective is to evaluate the concepts, merits, and limitations of the Recommendation and assess whether it effectively addresses challenges related to corporate tax base erosion.
What scientific methods were applied?
The research relies on a thorough literature review, comparing primary and secondary EU law, ECJ case law, and international policy documents from organizations like the OECD.
What topics are covered in the main section?
The main section covers the interpretation of the Recommendation, its legal basis, its consistency with ECJ jurisprudence, and a critical analysis of its reception in academic and professional circles.
Which key terms characterize this research?
The study is characterized by terms such as Aggressive Tax Planning (ATP), GAAR, ECJ jurisprudence, tax transparency, and base erosion.
How does the Recommendation define "sophisticated" tax planning?
The Recommendation characterizes tax planning as sophisticated if it relies on technicalities of tax law or mismatches between jurisdictions to reduce tax liability in ways that contradict the intent of the law.
What is the stance of the author on the effectiveness of the Recommendation?
The author concludes that the Recommendation is not a comprehensive solution but rather a "brick" in a larger defensive wall, often criticized for being too broad and imprecise.
How does the Recommendation interact with OECD standards?
While the Recommendation focuses on EU-specific measures, it attempts to align with broader OECD initiatives, such as the BEPS Action Plan, although it is often considered less detailed than OECD studies.
Why did the author conclude that the Recommendation is considered "superfluous" by some critics?
Some academics, such as Lang and Lohse, argue that existing national tax laws and ECJ case law already provide sufficient mechanisms to address tax abuse, rendering the new EU-wide recommendations unnecessary or legally redundant.
- Citar trabajo
- Paul Eisenberg (Autor), 2014, The EU Commission Recommendation on Aggressive Tax Planning. Concepts, Merits, Limits, Múnich, GRIN Verlag, https://www.grin.com/document/457449
