Recent Measures To Counter Hybrid Mismatch Arrangements At The Eu Level

This note describes recent measures to counter hybrid mismatch arrangements at the EU level. After summarizing the OECD's work regarding hybrid mismatch arrangements, the note discusses the provision on hybrid mismatch arrangements in ATAD 1, as well as the operative rules in ATAD 2, including examples of their application.

Tax treaty law and EU tax law in connection with hybrid entities Hybrid entities have traditionally been used as an avenue for international tax planning, and extending benefits under tax treaties to such entities has been a source of controversy for many years now. Although the OECD Partnership Report provided solid policy footing on this issue, there was still no common legal basis that countries could rely on for such positions. The increasing focus of countries towards the curbing of tax avoidance and abuse involving hybrid mismatch arrangements culminated in a specific action plan in the BEPS Project being dedicated to the design of domestic rules and the development of treaty provisions that would neutralize the tax effects of such arrangements. This volume provides an in-depth analysis of various aspects of this topic. It is divided into two parts – the first dealing exclusively with tax treaty issues arising in connection with hybrid entities and the second dealing with EU tax law issues surrounding hybrid entities. The former part comprises chapters analysing how tax treaties have historically dealt with this issue with a focus on domestic court jurisprudence, the positions in the OECD and the UN Model Conventions, the developments that have come about owing to the BEPS Project, and the impact of several existing measures, regimes, and vehicles on these tax treaty provisions. The latter part comprises chapters on how hybrid entities are dealt with under primary EU law, under various secondary law directives including the newly enacted Anti-Tax Avoidance Directives, and an analysis of policy solutions offered in this direction.

This report sets out recommendations for domestic rules to neutralise the effect of hybrid mismatch arrangements and includes changes to the OECD Model Tax Convention to address such arrangements. Once translated into domestic law, the recommendations in Part 1 of the report will neutralise the effect of cross-border hybrid mismatch arrangements that produce multiple deductions for a single expense or a deduction in one jurisdiction with no corresponding taxation in the other jurisdiction. Part 1 of the report will be supplemented by a commentary, which will explain the recommended rules and illustrate their application with practical examples. Part 2 of the report sets out proposed changes to the Model Convention that will ensure the benefits of tax treaties are only granted to hybrid entities (including dual resident entities) in appropriate cases. Part 2 also considers the interaction between the OECD Model Convention and the domestic law recommendations in Part 1.

Addressing base erosion and profit shifting (BEPS) is a key priority of governments. In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. This publication is the final report for Action 2.

Tax competition in the form of harmful tax practices can distort trade and investment patterns, erode national tax bases and shift part of the tax burden onto less mobile tax bases. The Report emphasises that governments must intensify their cooperative actions to curb harmful tax practices.

Offering a comprehensive exploration of EU taxation law, this engaging Research Handbook investigates the associated legal principles in the context of both direct and indirect taxation. The important issues and debates arising from these general principles are expertly unpicked, with leading scholars examining the status quo as well as setting out a clear agenda for future research.

This action plan, created in response to a request by the G20, identifies a set of domestic and international actions to address the problems of base erosion and profit sharing.

This book examines recent developments and high-profile debates that have arisen in the field of international tax law and European tax law. Topics such as international tax avoidance, corporate social responsibility, good governance in tax matters, harmful tax competition, state aid, tax treaty abuse and the financial transaction tax are considered. The OECD/G20 project on Base Erosion and Profit Shifting (BEPS) features prominently in the book. The interaction with the European Union's Action Plan to strengthen the fight against tax fraud and tax evasion is also considered. Particular attention is paid to specific BEPS deliverables, exploring them through the prism of European Union law. Can the two approaches be aligned or are there inherent conflicts between them? The book also explores whether, when it comes to aggressive tax planning, there are internal conflicts between the established case law of the Court of Justice and the emerging policy of the European institutions. By so doing it offers a review of issues which are of constitutional importance to the European Union. Finally, the book reflects on the future of international and European tax law in the post-BEPS world.

"The ongoing COVID-19 pandemic marks the most significant, singular global disruption since World War II, with health, economic, political, and security implications that will ripple for years to come." -Global Trends 2040 (2021) Global Trends 2040-A More Contested World (2021), released by the US National Intelligence Council, is the latest report in its series of reports starting in 1997 about megatrends and the world's future. This report, strongly influenced by the COVID-19 pandemic, paints a bleak picture of the future and describes a contested, fragmented and turbulent world. It specifically discusses the four main trends that will shape tomorrow's world: - Demographics-by 2040, 1.4 billion people will be added mostly in Africa and South Asia. - Economics-increased government debt and concentrated economic power will escalate problems for the poor and middleclass. - Climate-a hotter world will increase water, food, and health insecurity. - Technology-the emergence of new technologies could both solve and cause problems for human life. Students of trends, policymakers, entrepreneurs, academics, journalists and anyone eager for a glimpse into the next decades, will find this report, with colored graphs, essential reading.

The topics of double non-taxation and hybrid entities have acquired particular importance in a context where transformations in the tax world have led to international commitments materialised in the OECD Base Erosion and Profit Shifting (BEPS) project. In what is the first systematic in-depth analysis of the OECD BEPS Action Plan 2 and hybrid entities, this timely book provides a critical review of the approach adopted by the OECD and proposes a deeply informed alternative method to deal with the problem of hybrid entity mismatches. The author analyses the interaction between the double non-taxation outcome and the use of hybrid entities in an approach not strictly linked to any specific tax jurisdiction. To this end, the analysis includes case studies and examples from a range of jurisdictions emphasising the international tax context, also including the application of tax treaties. Among the seminal matters covered in this edition are the following: foundations of the concepts of double non-taxation and hybrid entities; extensive analysis based on the rules of characterisation of foreign entities for tax purposes in the United States, Spain, Denmark, and Germany, as well as on the Poland/United States and Canada/United States tax treaties; in-depth analysis of the implications of Article 1(2) OECD Model Tax Convention and Article 3(1) Multilateral Instrument (MLI), especially considering the position of developing (source) countries; detailed analysis of the OECD BEPS Action 2 and its recommendations (linking rules), including its implementation in the EU Anti-Tax Avoidance Directive (ATAD); and elaborated alternative method to deal with hybrid entity mismatches (reactive coordination rule), which is informed by the tax policy aims of simplicity, coherence, and administrability. Detailed comparisons between the author’s proposal and other existing rules elucidate common points and deviations. If merely for its unparalleled clarification of the issues, this book will prove of immeasurable value to practitioners, tax authorities, policymakers and academics concerned with international tax law. Beyond that, as an authoritative guide that promises to reorient the discussion to what really matters in the debate regarding hybrid entity mismatches, this analysis elaborates solutions applicable to a generality of cases worldwide and, therefore, hugely promotes the urgent quest for alternative views.