The Resource Common Consolidated Corporate Tax Base and Limitation on Benefits Clauses

Common Consolidated Corporate Tax Base and Limitation on Benefits Clauses

Label
Common Consolidated Corporate Tax Base and Limitation on Benefits Clauses
Title
Common Consolidated Corporate Tax Base and Limitation on Benefits Clauses
Creator
Subject
Language
eng
Summary
Based on a thorough analysis of the formulary apportionment procedure proposed by the Common Consolidated Corporate Tax Base (CCCTB) draft directive, this article evaluates the interaction between the proposed CCCTB concept and existing/future anti-treaty shopping measures, especially Limitation on Benefits (LoB) clauses. Corporate groups that are taxed according to the CCCTB concept would regularly fail the ownership and base erosion tests of standard LoB clauses. Therefore, the treaty benefits would be denied. This interplay is especially critical for the future of tax relations between the EU Member States and the US since their bilateral treaties predominately use LoBs. The findings, however, are not limited to these relations but are of worldwide interest since OECD Base Erosion and Profit Shifting (BEPS) Action 6 proposes the introduction of a LoB Clause to the OECD Model Convention. Irrespective of the substantial legal uncertainty relating to the compatibility of LoB clauses with EU law, this article shows that both the existing LoB clause as well as that proposed by BEPS Action 6 are incompatible with the CCCTB concept. The most feasible way of bringing these two layers of corporate income tax rules into accordance with each other seems to be by way of a harmonised EU-wide approach to negotiating new and renegotiating existing tax treaties with third countries conducted by the EU Commission
Citation source
In: British tax review. - London. - (2018), no. 1 ; p. 68-93
http://library.link/vocab/creatorName
Petutschnig, M
Geographic coverage
  • Europe
  • North America
Language note
English
http://library.link/vocab/subjectName
  • CCCTB
  • LoB
  • formulary apportionment
  • treaty shopping
  • treaty abuse
  • tax treaty
  • third countries (EU)
  • BEPS
  • fundamental freedoms
  • justification
  • withholding tax
Label
Common Consolidated Corporate Tax Base and Limitation on Benefits Clauses
Instantiates
Publication
Label
Common Consolidated Corporate Tax Base and Limitation on Benefits Clauses
Publication

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