Nicht aus der Schweiz? Besuchen Sie lehmanns.de
CJEU - Recent Developments in Direct Taxation 2017 -

CJEU - Recent Developments in Direct Taxation 2017 (eBook)

Schriftenreihe IStR Band 110
eBook Download: EPUB
2018 | 1. Auflage
248 Seiten
Linde Verlag Wien Gesellschaft m.b.H.
978-3-7094-0957-2 (ISBN)
Systemvoraussetzungen
54,99 inkl. MwSt
(CHF 53,70)
Der eBook-Verkauf erfolgt durch die Lehmanns Media GmbH (Berlin) zum Preis in Euro inkl. MwSt.
  • Download sofort lieferbar
  • Zahlungsarten anzeigen

CJEU - The most important cases in the field of direct taxation

A great number of cases pending before the Court of Justice of the European Union (CJEU) concern the fundamental freedoms and direct taxation. In particular, the number of infringement procedures brought before the CJEU by the European Commission has been increasing year on year. The CJEU is still in the driver’s seat in the area of direct taxation. All judgements and pending cases, therefore, have to be carefully analyzed by academics as well as practitioners.

This book discusses the most important cases in the field of direct taxation pending before or recently decided by the CJEU. Moreover, the national background of these cases is discussed and possible infringements of the fundamental freedoms and secondary EU law are analyzed. The analyses are presented by esteemed national and European tax law experts. By examining the preliminary questions, the arguments brought forward by the parties and existing CJEU case law, the authors provide insight into the possible reasoning of the Court. Moreover, this book goes to the heart of the national tax systems, exposing hidden obstacles to the fundamental freedoms.

1Austria: CJEU Recent Case from Austria – Austria / Germany (C-648/15)


Claus Staringer


1. 2Overview


On 12 September 2017, the CJEU handed down its judgment in (C-648/15). This case is rather special: it concerns a dispute over the interpretation of a particular rule in the Austria-Germany tax treaty. This dispute is now resolved by the CJEU’s judgment, the Court having acted, in effect, as an arbitration tribunal. The CJEU was given the competence to do this by the two contracting states in their bilateral tax treaty: when the Austria-Germany tax treaty established arbitration as the ultimate resolution mechanism over tax treaty disputes (in its Article 25 para. 5), the CJEU was explicitly chosen as the (exclusive) court of arbitration.

In this respect, the present case is absolutely unique: since the Austria-Germany tax treaty (which was negotiated around the year 2000), no other bilateral (or multilateral) tax treaty has given the CJEU such a role. For many years, there was no practical experience of any kind of arbitration under the Austria-Germany tax treaty itself. The present case is actually the first case ever for a dispute between the two states to have escalated to the CJEU for arbitration, after an unsuccessful mutual agreement procedure (MAP).

It is not surprising therefore, that several of the issues in case C-648/15, as discussed below, are (at least so far) unchartered territory. In this regard, the CJEU’s judgment has given some answers to what have thus far been open questions. 1 The author has already speculated on some of these answers when discussing the case while it was still pending before the CJEU. 2 Hence, the analysis below provides an opportunity to verify whether the author’s earlier speculations were correct.

2. The Dispute and the CJEU’s Decision


A brief summary of the underlying dispute: 3

The issue in dispute was whether Germany is allowed to levy a withholding tax on certain cross-border interest payments under Article 11 of the Austria-Germany tax treaty. Under the treaty the general rule for allocating taxing rights over cross-border interest payments is that the residence state of the recipient of the interest has the exclusive right to tax such interest. There is in general no right for the source state to levy tax (e.g. by withholding) on the interest payments (Article 11 3para. 1 of the treaty). By way of exception, the source state is however allowed to levy a tax (with no percentage cap) on interest payments on debt instruments which have a profit participation (in the authentic German language: ).

The disputed issue was now whether a particular kind of interest payment is covered by Article 11 para. 2 of the treaty so that the source state (here Germany) may levy a source tax. The relevant facts of the case are as follows: A German issuer has issued profit participation rights (PPR) (in German: ) to Austrian investors. The PPR had a fixed coupon, i.e. payments to investors under the PPR where calculated as a fixed percentage of invested capital. However, interest payments were only due where the issuer had sufficient profits to satisfy the coupon. If not, unpaid coupons were cumulated (i.e. carried forward) until the issuer became profitable enough to pay the accumulated coupons out of his profits.

The core question was therefore whether the PPR described above generated interest payments that could be classified as stemming “”. If this was the case, Germany would be entitled to levy a source tax under Article 11 para. 2 of the treaty, leading to a credit obligation for Austria in respect of such German source tax. Otherwise (i.e. if no “” was found to exist), Germany would not be entitled to levy any source tax and Austria consequently would not face any credit obligation under the treaty.

The CJEU has given a clear answer to this question in its judgment: tit has interpreted Article 11 para. 2 of the Austria-Germany treaty in such way that there is no right for Germany to levy a source tax on a PPR structured in the manner that it was in the present case. In other words, Austria has “won” the case.

Indeed, the outcome of the case is exactly consistent with the argument submitted by Austria in the proceedings: for the Austrian government, it was always very clear that a PPR such as in the case at hand cannot be a “” instrument because it has a fixed coupon (i.e. there is no percentage entitlement in the issuer’s profit). The only “profit related” element in the PPR concerned is that the issuer is not required to make any interest payments in loss years (or less than the full payment in years where profit is not sufficient to meet the full coupon), but is allowed to carry forward the payment obligation into future profitable years. However, this mechanism is not a “”, but at best a “condition of profitability” which is not covered by Article 11 para. 2 of the treaty. 4 The CJEU followed the substance of this argument, i.e. that instruments cannot fall under Article 11 para. 2 of the treaty if they are only , but not .

3. 4The Reasoning of the CJEU


While the CJEU’s ultimate result is, in the author’s view, convincing, the underlying reasoning it has employed to arrive at such result is more difficult to follow.

3.1. The Irrelevance of Domestic Law


The CJEU starts its analysis of the case with a reference to Article 3 para. 2 of the Austria-Germany tax treaty (which corresponds to Article 3 para. 2 of the OECD Model Convention), where it is stated that items not defined in the treaty should be given the meaning they have under the contracting states’ domestic law. 5 This reference to Article 3 para. 2 is unfortunate as it could be seen as an indication that the CJEU indeed has looked, at least as a starting point, into domestic law to get an understanding of the term “” in Art 11 para. 2 of the Austria-Germany tax treaty. However, this creates the wrong impression. The CJEU’s further reasoning clearly shows that in reality it rejects domestic law as the guiding source of interpretation in the present dispute. 6

The CJEU arrives at this result through an elaborated interpretation of Article 25 para. 5 of the Austria-Germany tax treaty, i.e. of the treaty’s arbitration clause. This clause would be ineffective if undefined terms (like “”) were governed by the contracting states’ domestic laws, as different domestic law backgrounds would then necessarily lead to a dispute that it could not resolve. There would simply be two “correct” interpretations of “”, each following a different domestic law concept. This would deprive the arbitration clause of all practical effect. Therefore, the CJEU concludes that Article 11 para. 2 must be interpreted according to the methods of International Law (i.e. the Vienna Convention on the Law of Treaties) by its ordinary meaning, object and purpose. 7

The whole analysis of the CJEU on the “interpretation by domestic or international law...

Erscheint lt. Verlag 2.8.2018
Sprache englisch
Themenwelt Recht / Steuern Steuern / Steuerrecht
ISBN-10 3-7094-0957-8 / 3709409578
ISBN-13 978-3-7094-0957-2 / 9783709409572
Haben Sie eine Frage zum Produkt?
EPUBEPUB (Adobe DRM)
Größe: 1,4 MB

Kopierschutz: Adobe-DRM
Adobe-DRM ist ein Kopierschutz, der das eBook vor Mißbrauch schützen soll. Dabei wird das eBook bereits beim Download auf Ihre persönliche Adobe-ID autorisiert. Lesen können Sie das eBook dann nur auf den Geräten, welche ebenfalls auf Ihre Adobe-ID registriert sind.
Details zum Adobe-DRM

Dateiformat: EPUB (Electronic Publication)
EPUB ist ein offener Standard für eBooks und eignet sich besonders zur Darstellung von Belle­tristik und Sach­büchern. Der Fließ­text wird dynamisch an die Display- und Schrift­größe ange­passt. Auch für mobile Lese­geräte ist EPUB daher gut geeignet.

Systemvoraussetzungen:
PC/Mac: Mit einem PC oder Mac können Sie dieses eBook lesen. Sie benötigen eine Adobe-ID und die Software Adobe Digital Editions (kostenlos). Von der Benutzung der OverDrive Media Console raten wir Ihnen ab. Erfahrungsgemäß treten hier gehäuft Probleme mit dem Adobe DRM auf.
eReader: Dieses eBook kann mit (fast) allen eBook-Readern gelesen werden. Mit dem amazon-Kindle ist es aber nicht kompatibel.
Smartphone/Tablet: Egal ob Apple oder Android, dieses eBook können Sie lesen. Sie benötigen eine Adobe-ID sowie eine kostenlose App.
Geräteliste und zusätzliche Hinweise

Buying eBooks from abroad
For tax law reasons we can sell eBooks just within Germany and Switzerland. Regrettably we cannot fulfill eBook-orders from other countries.

Mehr entdecken
aus dem Bereich
Steuerliche Grundlagen zur Nutzung der Sonnenenergie

von Jürgen K. Wittlinger

eBook Download (2023)
Springer Fachmedien Wiesbaden (Verlag)
CHF 29,30
Rechtsgrundlagen und Praxis

von Ulrich Stache

eBook Download (2023)
Springer Fachmedien Wiesbaden (Verlag)
CHF 34,15
Praxiskommentar zu den berufsrechtlichen Vorschriften

von Axel Schmucker; Uwe Rauhöft

eBook Download (2023)
Springer Fachmedien Wiesbaden (Verlag)
CHF 38,95