Taxation of Foreign Business Income Within the European Internal Market.

Format:

Book

Author/Creator:

Monsenego, Jérôme.

Series:

Doctoral series ; 22.

IBFD doctoral series, 1570-7164 ; v. 22

Language:

English

Subjects (All):

Business enterprises, Foreign--Taxation--Law and legislation--European Union countries.

Business enterprises, Foreign.

Corporations--Taxation--European Union countries.

Corporations.

Income tax--European Union countries--Foreign income.

Income tax.

Physical Description:

xviii, 396 p. : ill. ; 24 cm.

Edition:

1st ed.

Other Title:

Analysis of the conflict between the objective of achievement of the European internal market and the principles of territoriality and worldwide taxation

Place of Publication:

Amsterdam : IBFD Publications USA, Incorporated, 2012.

Summary:

Legal analysis on the conflict between the objective of achievement of the European internal market and the principles of territoriality and worldwide taxation.

Contents:

Intro

Title Page

Copyright Page

Foreword

List of Abbreviations

Table of Contents

Chapter 1: Introduction

1.1. The problem

1.2. Purpose

1.3. Definitions and terminology

1.3.1. The principle of territoriality (in international law), the fiscal principle of territoriality and the principle of worldwide taxation

1.3.2. Capital import neutrality and capital export neutrality

1.3.3. The ability-to-pay principle and the benefit principle

1.4. Limitations

1.5. Previous research

1.6. Method

1.6.1. Legal method used in the dissertation

1.6.2. Links with other disciplines

1.6.3. Language

1.6.4. Research method applied to the dissertation

1.7. Outline

Chapter 2: International Law and Tax Jurisdiction over Foreign Business Income

2.1. Introduction

2.2. Jurisdiction in international law

2.2.1. Introduction

2.2.2. Principles of jurisdiction to prescribe

2.2.2.1. The principle of territoriality as a jurisdiction principle in international law

2.2.2.2. Other jurisdiction principles

2.2.2.3. Conclusion

2.2.3. Does international law require a genuine or minimum connection to exercise jurisdiction?

2.2.4. Is there a hierarchy between the different jurisdiction principles to avoid concurring jurisdictional claims?

2.2.5. Conclusion

2.3. Tax jurisdiction over foreign business income

2.3.1. May a state take into account foreign elements when exercising jurisdiction to prescribe in the field of tax law?

2.3.1.1. Introduction

2.3.1.2. Tax jurisdiction on resident taxpayers: Is it compatible with international law to tax residents on their worldwide income?

2.3.1.3. Tax jurisdiction on non-resident taxpayers: Is it compatible with international law to tax non-residents on worldwide income?.

2.3.2. Does international law impose a minimum connection to exercise tax jurisdiction?

2.3.3. Overlaps between tax claims of several states: Does international law prohibit double taxation?

2.3.4. May states refuse to take into account foreign elements when exercising their taxing powers?

2.4. Conclusion

2.4.1. Summary of the findings and illustration of states' tax jurisdiction in relation to different territorial connections

2.4.2. Member States' fiscal sovereignty with regard to EU law

Chapter 3: Taxation of Resident Companies on Income of Foreign Group Companies

3.1. Introduction

3.2. Application of the principle of worldwide taxation to foreign companies' profits: The Cadbury Schweppes case

3.2.1. Introduction and presentation of the Cadbury Schweppes case

3.2.2. Reasoning of the ECJ and choice of a comparator

3.2.2.1. Comparison between the ownership in foreign and domestic subsidiaries

3.2.2.2. Comparison of CFC rules with the taxation of inbound dividends

3.2.2.3. Comparison of CFC rules with the taxation of a permanent establishment

3.2.2.4. Conclusion

3.2.3. Consequences of Cadbury Schweppes with regard to the principle of worldwide taxation

3.2.3.1. CFC rules and the taxation of a non-resident's foreign income

3.2.3.2. May a Member State favour the principle of worldwide taxation over the fiscal principle of territoriality for the prevention of tax avoidance?

3.2.3.2.1. CFC taxation - A means to prevent the abuse of EU law

3.2.3.2.2. The prevention of tax avoidance through CFC rules: Drawing the line between abusive and non-abusive situations

3.2.3.3. CFC rules imply a different treatment between domestic and foreign subsidiaries for the shareholder: Can Cadbury Schweppes be reconciled with FII Group Litigation?.

3.2.4. Conclusion on CFC rules and the application of the principle of worldwide taxation at a group level

3.3. Deduction of negative income incurred by foreign group companies

3.3.1. Introduction

3.3.2. Presentation of the Marks &amp

Spencer, Oy AA and X Holding cases

3.3.2.1. The Marks and Spencer case

3.3.2.2. The Oy AA case

3.3.2.3. The X Holding case

3.3.3. The choice of comparator

3.3.3.1. Comparison between domestic and foreign group companies

3.3.3.2. Comparison between foreign subsidiaries and permanent establishments

3.3.3.2.1. Comparison between foreign subsidiaries and permanent establishments in Marks &amp

Spencer

3.3.3.2.2. Comparison between foreign subsidiaries and permanent establishments in X Holding

3.3.4. Relief for non-final losses incurred by foreign group companies

3.3.4.1. The Marks &amp

Spencer case

3.3.4.1.1. The justification level

3.3.4.1.2. The proportionality level

3.3.4.2. The X Holding case

3.3.4.3. The Oy AA case

3.3.4.4. Conclusion on the relief for non-final losses incurred by foreign group companies

3.3.5. Relief for final losses incurred by foreign group companies

3.3.5.1. The relevance of cross-border loss relief within the internal market

3.3.5.2. Defining "final" losses

3.3.5.3. The discrepancy between international double taxation and the double non-deduction of final losses

3.3.5.4. The perspective from which final losses should be computed: Capital export neutrality vs capital import neutrality

3.3.5.5. Which group company should be granted relief for final losses?

3.3.5.5.1. Should loss relief be granted only to a parent company or could it also be granted to other group companies?

3.3.5.5.2. Granting loss relief to the parent company: The dilemma between direct and ultimate parent companies.

3.3.5.6. Conclusion on the relief for final losses incurred by foreign group companies

3.3.6. Conclusion on losses incurred by foreign group companies

3.4. Conclusion of Chapter 3

Chapter 4: Taxation of Resident Companies on Foreign Business Income Earned through Permanent Establishments

4.1. Introduction

4.2. Application of the principle of worldwide taxation in the Member State of residence

4.2.1. Introduction

4.2.2. The Columbus Container case

4.2.2.1. Presentation of Columbus Container

4.2.2.2. Discussion of Columbus Container

4.2.2.2.1. Columbus Container and compatibility of the principle of worldwide taxation with EU law

4.2.2.2.2. Columbus Container and the prevention of tax avoidance: Can Columbus Container and Cadbury Schweppes be reconciled?

4.2.2.2.2.1.Comparing Columbus Container and Cadbury Schweppes

4.2.2.2.2.2. The apparent incompatibility between Columbus Container and Cadbury Schweppes

4.2.2.2.3. Compatibility with EU law of the nondiscriminatory taxation of foreign income: Discrimination-based analysis vs restriction-based analysis

4.2.3. The Krankenheim case

4.2.3.1. Presentation of Krankenheim

4.2.3.2. Discussion of Krankenheim with regard to the taxation of foreign profits

4.2.4. EU law and the grant of a full tax credit

4.2.4.1. Introduction

4.2.4.2. Illustration of the potential advantages of a full tax credit and presentation of the Gilly case

4.2.4.3. May the objective of achievement of the internal market require granting a full tax credit?

4.2.5. Conclusion on the taxation of the positive income of permanent establishments

4.3. Application of the fiscal principle of territoriality in the Member State of residence

4.3.1. Introduction

4.3.2. Presentation of the Deutsche Shell, Lidl Belgium and Krankenheim cases

4.3.2.1. The Deutsche Shell case.

4.3.2.2. The Lidl Belgium case

4.3.2.3. The Krankenheim case

4.3.3. Discussion of the solutions reached in Deutsche Shell, Lidl Belgium and Krankenheim with regard to foreign losses

4.3.3.1. Relief for non-final losses incurred by a permanent establishment

4.3.3.1.1. Consequences of the exemption method chosen in a tax treaty

4.3.3.1.2. The justification level

4.3.3.1.3. The proportionality level

4.3.3.1.4. Conclusion on the relief for non-final losses incurred by a permanent establishment

4.3.3.2. Relief for final losses incurred by a permanent establishment

4.3.3.2.1. Analysis of Lidl Belgium with regard to final losses incurred by a permanent establishment subject to the exemption method

4.3.3.2.2. The tax treatment of final losses in Krankenheim

4.3.3.2.3. Arguments pleading for granting relief for final losses incurred by a permanent establishment subject to the exemption method

4.3.4. Conclusion on the application of the fiscal principle of territoriality to permanent establishments

4.4. The possible requirement of most favoured nation treatment in the Member State of residence with regard to foreign business income

4.4.1. Introduction

4.4.2. The absence of requirement of a most favoured nation treatment in ECJ case law

4.4.3. Arguments supporting the view that EU law should not require most favoured nation treatment as far as the taxation of business income is concerned

4.4.4. Conclusion

4.5. Conclusion on the extent of the tax jurisdiction of the Member State of residence

Chapter 5: Taxation of the Foreign Business Income Attributable to a Permanent Establishment by the Member State of establishment

5.1. Introduction

5.2. Taxation of foreign positive income attributable to a permanent establishment

5.2.1. Introduction.

5.2.2. ECJ case law transposed to the taxation of foreign positive income attributable to a permanent establishment.

Notes:

Originally presented as the author's thesis (Doctor of Laws and Docteur en Droit)--Stockholm School of Economics and the Université de Paris I Panthéon-Sorbonne, 2011.

Includes bibliographical references (p. 355-394).

Description based on publisher supplied metadata and other sources.

ISBN:

90-8722-114-2

OCLC:

1374426090