Over the last few years, transfer pricing and related documentation has become the hot topic in Luxembourg taxation in an evolving environment that is relying increasingly less on tax rulings. In the past, taxpayers have viewed tax rulings as a way to provide legal certainty and to mitigate tax risks relating to investments and intra-group transactions. However, for a number of reasons this is no longer the case.

Posted by Oliver R. Hoor on 24/07/2018 Read more

We probably need to get used to politicians using Twitter as a communication channel, discussing highly complicated topics in a very simplified manner within a 140 character limit (recently increased to 280 characters). However, using Twitter entails the risk that messages are misunderstood or taken out of context.

Posted by Oliver R. Hoor on 13/03/2018 Read more

Over the past few years, several EU Member States have implemented a variety of anti-abuse legislation – including anti-Directive/anti-Treaty shopping rules, controlled foreign company (CFC) rules, general anti-abuse rules (GAAR) and specific anti-avoidance rules (SAAR) – to protect their own tax base against erosion. Far from being uniform, the way anti-abuse legislation is designed varies from one state to another and may be rather restrictive or broad in its scope of application. However, in two major decisions in 2017, the Court of Justice of the European Union (CJEU) defined clear criteria that need to be adhered to when designing and interpreting anti-abuse legislation in an EU context. We’ve rewritten these criteria as 10 commandments that we hope Tax Authorities will follow.

Posted by Oliver R. Hoor on 15/02/2018 Read more
Are EU Institutions becoming the new supra-national tax authorities?

As we saw in Part I of this series, we have to ask ourselves the right questions. Namely, “are EU institutions overstepping the legal bounds?” In this Part II, we explore the increasing tax powers of the EU institutions and possible implications of the CCTB Proposal on MS who actually don’t have much in common.

Posted by Keith O'Donnell on 22/11/2017 Read more
Are EU Institutions becoming the new supra-national tax authorities?

The CCTB Proposal raises fundamental questions on both the fiscal role of EU institutions and the impact of such a proposal on the fiscal sovereignty of MS. Even though the power to levy taxes remains exclusively in the hands of MS and the European Union has no fiscal capacity of its own, there is no doubt that EU law does, to some extent, interfere with this sphere of state responsibility. But what kind of fiscal Europe is being created via fiscal Directives? And how far can the EU institutions take tax measures? 

Posted by Keith O'Donnell on 22/11/2017 Read more
The Money Survey

Last week we revealed the results of our "Money Survey" where we asked 1000 Luxembourg residents to give us their perceptions of wealth, money and tax. Now, we've compared some of our findings to real figures with interesting results. Scroll through our infographic and learn just how much (or little) reality differs from perception.  

Posted by Keith O'Donnell on 03/11/2017 Read more

Over the course of the last few years, interest in the field of international taxation has grown steadily. The topic has found its way into the heart of public debate where it is often subjected to oversimplification and political spin. Objective technical and legal analysis is rarely considered worthy to explain, too complex, too complicated for the layman to grasp (or maybe too dry), and so the topic is filtered through concepts of fairness and morality in order to give it mass appeal. Seemingly in response to society’s increased appetite for “tax justice”, the EU Commission has amplified its activity, publically denouncing a number of tax practices it perceived as illegal State Aid and quickly introducing sweeping legislative actions aimed at tacking this perceived abuse. EU Member States have just as swiftly adopted these new provisions and directives in an effort to address the issue.

Posted by Antoine Dupuis on 06/02/2017 Read more

What do a bank and a duty free shopping group have in common? Answer: they both invested abroad.  In itself, hardly noteworthy, but in this case, these 2 Spanish companies benefitted from a specific Spanish tax provision allowing the tax write off of goodwill on acquisitions of foreign subsidiaries. The EU Commission challenged this on the basis that it constituted illegal State Aid and litigation ensued. The procedure started in October 2007 and has been running ever since. A General Court (“GC”, the lower European court) decision in November 2014 that was taxpayer and Member State-friendly was overturned today by the European Court of Justice (ECJ, the supreme European court).

Posted by Keith O'Donnell on 21/12/2016 Read more

On 7 December 2016, the European Network on Debt and Development (Eurodad) released a report entitled “Survival of the Richest: Europe’s role in supporting an unjust global tax system 2016” which was produced by NGOs in countries across Europe. At the core of the report is the accusation that the number of Advance Pricing Agreements (APAs), referred to as secret “sweetheart deals” in the report, significantly increased over the last years. The key messages of the report have been much-cited in newspapers in Luxembourg and across the globe. Unfortunately, the journalists covering the topic merely relied on the information provided in the executive summary of the report without conducting a critical review of its content. Otherwise, the misrepresentations in the report would have been detected and pointed out. 

Posted by Keith O'Donnell on 13/12/2016 Read more

The Apple case has shot EU state aid rules into the headlines. It finishes the metamorphosis of State Aid from what was seen as a somewhat dull back-room legal field into a high-visibility front-line political topic. The case was announced in a high drama televised press conference which made headlines all around the world. The Apple case was high profile because of the company concerned, the financial impact on budgets on both sides of the Atlantic and also because it brought simmering political unease with the subject of State Aid in tax matters to a head. In this blog we will seek to frame some of the political questions in a more objective legal manner in order to bring structure to the political debates raging around the subject. We will look in particular at the Apple and McDonalds cases but similar considerations apply to others.

Posted by Keith O'Donnell on 01/09/2016 Read more