Impact of European law on double taxation conventions concluded between Member States and with third states. Meeting of a group of experts in Brussels on 5 July 2005
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Brussels, 5 th July 2005
Welcome and introduction
Mr. Aujean, Mr. Mors and Mr. Roccatagliata from the European Commission opened the floor and introduced the documents and the objectives of the workshop.
Working Document "EC Law and Tax Treaties "
In order to animate the debates that took place after each panel and to receive input for future work, the working document raises questions regarding views on possible conflicts and their possible avoidance.
1st PANEL (Tax Treaties between Member States)
Prof. Frans Vanistendael , KU Leuven University
Prof. Marjaana Helminen , University of Helsinki
Mr. Paul Farmer, Pump Court Tax Chambers, London
Mr. Arnaud de Graaf , Ministry of Finance, The Netherlands
The first panel examined possible conflicts between EC Law and tax treaties concluded among Member States. Such problems may result from court decisions of the European court of Justice that repeatedly said, despite the absence of harmonising measures and although "direct taxation does not as such fall within the purview of the Community, the powers retained by the Member States must nevertheless be exercised consistently with Community law". In this respect, some of the recent judgements of the Court have highlighted cases of discrimination in the treatment of Community citizens and businesses or of violation of the fundamental freedoms rules. Moreover, t he EC Study on Company Taxation identified a number of issues not covered within the scope of existing tax treaties. Primarily, these are issues for intra-Member States treaties. These issues include, for example, triangular situations, deduction of pension contributions, treatment of stock options, the relationship with anti-deferral and anti-abuse provisions, cross-border loss compensation. Finally, some pending ECJ cases inspired the debate.
2 nd PANEL (Tax Treaties between Member States and Third Countries)
Prof. Klaus Vogel , Ludwig-Maximilian University , Munich
Prof. Hugh J. Ault , Boston College
Prof. Daniel Gutmann , University of Paris (I-Panthéon)
Mestre Ana Paula Dourado , Ministry of Finance, Portugal
The second panel debated problems with EC Law related to tax treaties signed by individual Member States with third countries. The Commission suggested to examine this issue of tax treaties between individual Member States and third countries as a separate topic because of its peculiarity nature. Certainly - as already underlined in the Study on Company Taxation - it is true that anti-abuse clauses in tax treaties concluded by Member States with third countries should not discriminate against taxpayers in other Member States and that "limitation-on-benefits" clauses concluded by some Member States with the United States should be examined in the light of EC Law.
Mr. Mike Waters, Chair of WP1 (OECD-CFA); Ministry of Finance , United Kingdom
The European Commission offered the opportunity to the OECD, Centre of Tax Policy and Administration, to present to the tax experts and Member States representatives in charge of EC law, the work of groups and sub-groups of the Committee of Fiscal Affairs on tax treaties.
FINAL PANEL (Possible Solutions)
Prof. Peter Wattel , General-Advocate, High Court, The Hague
Prof. Michael Lang , University of Vienna
Prof. Pasquale Pistone , University of Salerno
Ms. Helen Pahapill , Ministry of Finance , Estonia
The concluding panel discussed possible solutions and the role that the European Commission could play in this context. Some experts also suggested opposite solutions (e.g. a multilateral tax treaty versus an EC tax model). Nevertheless, the debate was not limited to this main hypothesis. The existing tax treaties seem to need - at the very least - to be amended to conform to the developing rules of EC tax law as elaborated by the ECJ jurisprudence, by legislation and by soft-law in this area.
Contributions by participants:
- Prof. Daniel Deák, Corvinus University Budapest
[Consumption-oriented company taxation: a central European perspective ]
- Prof. Albert Rädler, Universität Hamburg
[Contribution to the workshop ]