INTERNATIONAL AND EUROPEAN TAX LAW
Exam
Oral exam consisting out of 2 parts
• Preparation and presentation of a case of the CJEU: we krijgen een case voor het examen en
moeten deze in een 2 à 3 (max. 5) pagina’s voorbereiden. Dit nemen we mee naar het examen
en er zullen vragen rond gesteld worden.
• Open questions without preparation
Summary of a case on direct law! What was the issue, parties, structure, what did the court decide?
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Study material
Mandatory study material
• Presentations available via Canvas
• OECD Model Convention (2017)
• Selected case law of the Court of Justice of the European Union (available via Curia)
• Primary and secondary EU law discussed during the course (available via Eurlex)
o Relevant provisions TEU and TFEU
o EU Directives in the area of direct taxation
Recommended study material
• This course and the materials build on the knowledge acquired during my PhD studies at the Institute of
Austrian and International Tax law of the Wirtschatsuniversität Wien and is in particular influenced by the
work of Prof. Dr. Michael Lang, Prof. Dr. Pasquale Pistone and Prof. Dr. Alexander Rust.
• Recommended reading materials:
o Introduction to the Law of Double Taxation Conventions, 3rd edition, M. Lang, Wien, Linde Verlag,
9783714303674
o Introduction to European Tax Law on Direct Taxation, 7th edition, M.Lang (ed.), Wien, Linde Verlag,
9783707346558
Further reading
• Books
o Terra/Wattel, European Tax Law, Volume 1, 8th Student edition, Wolters Kluwer
o Kokott, EU Tax Law, Beck
o Klaus Vogel on Double Tax Conventions, 5th edition, Wolters Kluwer
o Bammens / Debelva / Peeters / Reypens, Fiscaal Compendium – Internationaal Fiscaal Recht, Wolters
Kluwer
• Journals
o Intertax, World Tax Journal, Bulletin for International Taxation, EC Tax Review, European Taxation,
British Tax Review…
o Fiscoloog Internationaal, Internationale Fiscale Actualiteit...
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,Inhoudsopgave
1. PART ONE: SETTING THE SCENE............................................................................................................................................ 3
2. PART TWO DOUBLE TAX TREATIES - A: INTRODUCTION TO DOUBLE TAX TREATIES...............................................................8
3. PART TWO DOUBLE TAX TREATIES - B: EMPLOYMENT AND PENSION INCOME....................................................................19
4. PART TWO DOUBLE TAX TREATIES - C: BUSINESS PROFITS, ASSOCIATED ENTERPRISES AND INTERNATIONAL SHIPPING AND
AIR TRANSPORT..................................................................................................................................................................... 28
5. PART TWO DOUBLE TAX TREATIES - D: INCOME FROM IMMOVABLE PROPERTY; DIVIDEND, INTEREST & ROYALTY INCOME;
CAPITAL GAINS...................................................................................................................................................................... 41
6. PART TWO DOUBLE TAX TREATIES - E: THE APPLICATION AND INTERPRETATION OF TAX TREATIES.....................................47
7. PART TWO DOUBLE TAX TREATIES - F: CASE STUDIES.......................................................................................................... 52
8. PART THREE INTRODUCTION EU DIRECT TAX LAW - A: GENERAL......................................................................................... 57
9. PART THREE INTRODUCTION EU DIRECT TAX LAW – B: FUNDAMENTAL FREEDOMS............................................................61
10. PART THREE INTRODUCTION EU DIRECT TAX LAW – C: SELECTED CASE LAW INBOUND.....................................................67
11. PART THREE INTRODUCTION EU DIRECT TAX LAW – D: FUNDAMENTAL FREEDOMS SELECTED CASE LAW OUTBOUND......77
12. PART THREE INTRODUCTION EU DIRECT TAX LAW – E: POSITIVE HARMONIZATION VIA LEGISLATIVE ACTION...................88
13. PART THREE INTRODUCTION EU DIRECT TAX LAW – F: POSITIVE HARMONIZATION VIA LEGISLATIVE ACTION..................102
14. PART FOUR SPECIFIC TOPICS – THE OECD BEPS PROJECT AND ITS IMPACT ON EU DIRECT TAX LAW.................................109
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,1. PART ONE: SETTING THE SCENE
1.1TAXATION AS AN OBSTACLE FOR CROSS-BORDER ECONOMIC RELATIONS
Ireland 12,5% corporate tax. New idea to set a minimum tax in every country 15% due to the
multinationals > political decision, but every country has the right to organize its own tax structure.
Person X lives in Belgium but works in Germany. Five days a week person X commutes to work.
What’s the issue? When you live in Belgium but work in Germany, where do you pay income taxes?
You work for a German company, so Germany. Other option, you live in Belgium, thus Belgium has also
the right to tax. Both countries have the right to tax, but there is a problem of double taxation. Risk:
double taxation 40% in Belgium & 40% Germany > Not an option.
International: double, remove boundaries, international market. International framework & European
Framework.
Person X has his own company in State A selling goods of every kind. X is resident in State A. X
expands his business activity to State B and opens a shop in State B.
Example for businesses. State A taxes because the company is here, but State B disagrees because the
shop is also in this country, so taxable.
What is the issue? When you live in Belgium but you work in Germany: where do you pay income
taxes? Both countries have the right to tax, but there is a problem of double taxation. In EU internal
market (vrij verkeer/free movement) but this double taxation is a problem.
1.2BASIC INTERNATIONAL PRINCIPLES
1.2.1 Fiscal sovereignty of states and nexus
• Fiscal sovereignty of states: not unlimited
• Nexus requirement: link required between the state and the taxpayer
Subjective link
Individuals: domicile, residence, citizenship, nationality
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, Legal entities: place of effective management (poem), place of incorporation
Objective link
Parts of the transaction or activity is connected to the taxing state
Cryptocurrencies, can we tax this? Every country has the freedom to arrange his framework. Can
Belgium taxes Americans? No, there needs to be a link (required). NEXUS REQUIRMENT.
This link can be subjective (as a person, domicile, citizenship, nationality), legal entities (place of
effective management (poem), place of incorporation. Subjective link: linked to a person.
This link can also be objective: parts of the transaction of activity is connected to the taxing
state. When part of the transaction takes place in Belgium.
For example: Belgium is living in USA, he rents his house in Belgium. Layer income: house in Belgium
thus the right for Belgium to tax. However, USA tax because of the subjective link.
1.3SOURCES OF DOUBLE TAXATION
1.3.1 Universality principle and territoriality principle
Sources of international double taxation:
• Two countries tax on a worldwide basis
• Many countries tax their residents on their worldwide income (universality principle – full
tax liability)
• The situation where a taxpayer is resident for tax purpose of 2 (or more) states can lead
to double (multiple) international taxation
• One country taxes one a worldwide basis, the other country taxes on a source basis
• Some states tax their residents only on income sourced in that state (territoriality
principle – limited liability)
• Similarly, if there is only an objective link with a state, only the income earned in that
state will usually be taxed (territoriality principle – limited liability)
• Two countries tax on a source basis
If you have a subjective link, Belgium resident: Belgium will tax you on all your income (independaly of
the sources. For ex: prof gives lecture also in China, so the income abroad is also taxed by Belgium. Ex:
Belgium has a house in Spain, so this income will be also charged). UNIVERSALITY PRINCIPLE, FULL TAX
LIABILITY.
• Two countries can say, fox ex: incorporation of your company in Netherlands, but board
members are all in Belgium, all decisions are taken in Belgium. So Netherlands can say this is a
Belgium resident, so full tax principle. But Belgium is convinced: board members are in Belgium,
so also full tax liability.
• For ex: you work 5 days in Germany én spend the weekend in Belgium. So Germany will make
you resident in Germany and Belgium is also convinced about the same point. Double resident.
• More common: situation: 1 country taxes you for the whole income, the other country taxes a
part (appartement in Spain). Spain will tax the source of the income (irremovable house).
• - Which is also possible 2 countries will tax on sourced base. Immovable source: property in
Spain, so Spain will tax. But if it’s rent by a Netherlands, the Netherlands can find a point to
taxes the source (dit punt nog eens navragen).
Possible exam question.
1.3.2 Economic vs juridical double taxation
Juridical Double Taxation:
Both countries impose a tax on the same income and on the level of the same person.
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