International Bureau of Fiscal Documentation
IBFD
The International Bureau of Fiscal Documentation (IBFD) is an independent, not for profit foundation instituted in 1938.
ID: 135950711071-58
Lobbying Activity
Response to Evaluation of Administrative Cooperation in Direct Taxation
24 Jul 2024
DAC 6 raises several issues of compatibility with primary law. It should be more comprehensively revised, ensuring such compatibility, following what was indicated by CJEU in the Berlioz and in Orde v Vlaamse Balies Cases. DAC should not just address mutual administrative assistance but also foster the domestic tax systems transparency as a whole and safeguard the right to good administration in cross-border tax matters. Shifting focus from detecting non-compliance to building systems that promote compliance by design would represent an advancement. By facilitating data that can be used to pre-fill tax returns creating automated compliance mechanisms, the EC and Member States could reduce the administrative burden on taxpayers and increase overall compliance. Member States show varying levels of technical infrastructure and resources, affecting their ability to implement/maintain standardized data exchange systems. This disparity can lead to inefficiencies, delays, and data integrity issues in information sharing. Enhancing technical interoperability through investment in IT and harmonized standards would be key for a seamless exchange.
Read full responseResponse to Business in Europe: Framework for Income Taxation (BEFIT)
19 Dec 2023
This study realised by the IBFD Task Force on EU Law, analyses the critical issues of legal interpretation that might arise from the application of the proposed BEFIT Directive and puts forward possible solutions, focusing on four main areas. The first area (scope) analyses (i) the unequal treatment of companies that the annex may create and the Commissions delegated power to amend it; (ii) the possible conflict with double tax treaties, namely on PE profit attribution and on ownership non-discrimination rules. The second area (preliminary tax result) emphasises the need for greater coordination with other secondary law, especially the GMT directive. The third area (tax base allocation) evaluates: (i) the issues surrounding losses; (ii) the distortions caused by the transitional 'presumptive' transfer pricing rules on the tax base allocation and the conflict with CJEU case law; (iii) and shows how the unlimited power of Member States to adjust their BEFIT base may undermine the fundamental goals of the proposed Directive. Finally, the fourth area (administration and procedures) shows that (i) the two-tier procedural obligations are hard to reconcile with the spirit of the announced one-stop shop compliance mechanism, and that; (ii) legal uncertainty might arise as to the impact of the proposed Directive on domestic procedural rules.
Read full responseResponse to Business in Europe: Framework for Income Taxation (BEFIT)
19 Dec 2023
This study, from one of the members of the IBFD Task Force on EU Law, performs a legal assessment of the proposed Directive on Head Office Taxation, and puts forward alternatives to overcome the identified concerns. It is structured around the building blocks of the proposal: (i) scope; (ii) access to the regime; (iii) substantive tax rules; and (iv) procedural tax rules. The study concludes with policy considerations on the proposed Directives impact on the strengthening of the European Unions internal market.
Read full responseResponse to Business in Europe: Framework for Income Taxation (BEFIT)
26 Jan 2023
BEFIT represents an important step towards addressing corporate tax disparities across member States more comprehensively and coherently. It also provides a consistent framework for corporate tax compliance that may promote greater transparency and certainty. Therefore, we welcome this initiative by the Commission. Hereby, we would like to dwell on some key issues further addressed in our answers to the submitted Survey in connection with the BEFIT Public Consultation. THRESHOLDS A risk of ring-fencing is hidden in each carve-out or quantitative threshold. As such, we do not favour a threshold-based approach outside of some narrowly defined de minimis rules or carve-outs narrowed down to exclude economic actors that are not enterprises (e.g. grouping of not-for-profit entities), always leaving open the possibility for CIT non-covered taxpayers to opt into the system. TAX BASE DETERMINATION Divergences between the accounting and CIT systems are increasing compliance costs which may not be justified from a policy perspective, especially if the adopted accounting standards are robust (as with IFRS), and where the logic does not appear to be too far from the underlying goal of CIT base determination rules, which in our view shall be understood to be driven by the objective to provide a metrics for the ability to pay of corporate taxpayers. Adjustments should not be inspired by other non-fiscal regulatory goals as this would further exacerbate complexity and may not align with the stringent constitutional constraints that govern tax lawmaking. Priority should be given to rules that ensure the system's consistency and that would minimise distortions with regard to the interaction between BEFIT and non-BEFIT taxpayers as well as transitions from one regime to another. LOSSES The area of cross-border losses is prone to several disparities and inconsistencies across Member States, as the case law of the Court of Justice displays. BEFIT would thus provide an opportunity to address this crucial area more coherently. Moreover, from a systematic viewpoint, BEFIT would implicitly confer tax subjectivity to corporate groups, which would presuppose cross-border loss relief to be meaningfully achieved. APPORTIONMENT FORMULA While sales should indeed feature in the formula, we find that their weight should not be disproportionate in light of the consideration that destination already takes in the context of indirect taxation. Consideration should also be given to the concern that, since the current income tax rules do not allocate taxing rights to the market jurisdiction for remote sales, the difference in tax treatment for situations that are factually quite similar (e.g. non-BEFIT stand-alone company mostly selling remotely Vs comparably-sized MNE group subject to BEFIT) may be further exacerbated. With regard to the possibility of including intangibles in the formula, a fundamental distinction shall be made. The cost of generating an intangible asset internally is often difficult to distinguish from goodwill, internally generated marketing intangibles may thus need to be excluded. On the other hand, consideration may be given to the inclusion of other types of intangibles developed internally (if recognised for accounting purposes) as well as intangibles acquired from non-related parties. EXISTING TRANSFER PRICING FRAMEWORK Transactions between BEFIT and non-BEFIT taxpayers would represent the interface between a self-contained formulary apportionment system and the general framework provided by arms length. As such they should be monitored with special care. Compliance with transfer pricing rules may be simplified by relying on rebuttable predeterminations depending on the sectors of economic activity, thereby considered and a stylised functional characterisation of the involved parties. The work developed in connection with low value adding intra-group services and by Pillar 1 Amount B may serve as inspiration.
Read full responseResponse to Fighting the use of shell entities and arrangements for tax purposes
17 Mar 2022
The IBFD Task Force on EU Law comprises a group of IBFD Academic researchers habitually devoted to independent research on EU law. All of the members of the Task Force are independent scholars. The IBFD Task Force on EU Law is entirely funded by IBFD and does not receive additional funds from private companies or States that may be, directly or indirectly, impacted by the outcome of the relevant public consultation. This document reflects the joint views of the Task Force and not necessarily of each member. IBFD is a non-profit foundation, entirely funded through its activities and publications, operating in Amsterdam since 1938. More information can be found on www.ibfd.org. The authors have not received any instructions, guidelines or orientations by IBFD or any of its governance boards.
The enclosed position paper aims to provide input to the European Commission following the publication of a proposal for a Directive on the misuse of shell entities (Proposal for a Council Directive laying down rules to prevent the misuse of shell entities for tax purposes and amending Directive 2011/16/UE, COM(2021) 565 final, Brussels, 22.12.2021 (hereinafter Proposed Unshell Directive). This follows the public consultation on the use of shell entities and arrangements for tax purposes to which this Task Force Provided feedback (This consultation included: i) the inception impact assessment of 20 May 2021, Ref. Ares(2021)3353821 – 20/05/2021 and ii) the questionnaire of 4 June 2021, available at: https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12999-Tax-avoidance-fighting-the-use-of-shell-entities-and-arrangements-for-tax-purposes_en-. The feedback submitted by the IBFD Task Force on EU Law was then published as P. Pistone, J. Nogueira, A. Turina, I. Lazarov., Abuse through the Use of Shell Companies and Arrangements for Tax Purposes in the European Union: Feedback on the EU Consultation by the IBFD Task Force on EU Law, 4 Intl. Tax Stud. 7 (2021)).
See attached document.
Read full responseResponse to Taxpayers’ Rights in the Single Market (communication)
27 Nov 2020
On behalf of Pasquale Pistone (Academic Chairman IBFD)
IBFD welcomes the opportunity to participate in the public consultation launched by the European Commission (hereinafter ‘EC’) following the publication of the Roadmaps for the Communication on Taxpayers’ Rights in the Single Market and the Recommendation to Improve the Situation of Taxpayers in the Single Market, (collectively the ‘Roadmaps’ hereinafter), both of these in the context of the EC’s Communication for fair and simple taxation supporting the recovery strategy (15 July 2020).
In the call for the public consultation, the EC confirms its plans to publish both “a Communication taking stock of taxpayers’ existing rights under EU law” and “a Recommendation to Member States to facilitate the implementation of taxpayers’ rights and to simplify tax obligations”.
IBFD welcomes this approach since the Communication can raise the awareness of such rights among taxpayers and the Recommendation can outline the action needed for enhancing the effective protection of such rights. Furthermore, it gives a concrete signal as to the willingness of the EC to relaunch action in support of the exercise of rights by EU citizens, after a period in which the action has been mainly steered towards countering multinational enterprises not paying their fair share of taxes.
These actions are key to making taxation fair and simple at the EU level. It ensures the strengthening of the rule of law, facilitates compliance, simplifies the relationship with tax authorities, especially in cross-border settings, and last, but not least, also improves the smooth functioning of the internal market.
Read full responseMeeting with Stephen Quest (Director-General Taxation and Customs Union) and Microsoft Corporation and PwCIL
22 May 2018 · Conference on 'Digital Transformation of Tax Administrations"