This article aims to demonstrate that blockchain technology is the most optimal solution to tackle the significant challenge that Value Added Tax (VAT) non-compliance poses to the European Union (EU). VAT non-compliance, particularly evasion and fraud, is a complex and costly challenge to EU tax authorities and nations as a whole. Current compliance mechanisms fail to sufficiently ensure the collection of VAT in an effective and truly secure manner, leaving VAT and associated data open to misreporting and exploitation, posing a risk to both individual and national security. Focusing on the design aspects of security, transparency, and efficiency, it will be argued that blockchain provides the opportunity to tackle non-compliance whilst achieving a balance in both taxpayer’s wants and tax authorities’ needs. Utilizing current examples of blockchain implementation, as well as a specific VAT Coin proposal, it is demonstrated that a blockchain solution can come in many forms; be it a public, private or consortium blockchain, with each type respectively achieving compliance whilst prioritizing different aspects of data security and privacy. Ultimately, it is indicated that a blockchain-based VAT system has the potential to enable a significant reduction in the risk of non-compliance, whilst streamlining taxpayer obligations and protecting valuable datasets. blockchain, VAT, tax, cryptocurrency, MTF, VATCoin, fraud, non-compliance, security, EU
{"title":"Article: Blocking the Gap: The Potential for Blockchain Technology to Secure VAT Compliance","authors":"G. Alexander","doi":"10.54648/ecta2022014","DOIUrl":"https://doi.org/10.54648/ecta2022014","url":null,"abstract":"This article aims to demonstrate that blockchain technology is the most optimal solution to tackle the significant challenge that Value Added Tax (VAT) non-compliance poses to the European Union (EU). VAT non-compliance, particularly evasion and fraud, is a complex and costly challenge to EU tax authorities and nations as a whole. Current compliance mechanisms fail to sufficiently ensure the collection of VAT in an effective and truly secure manner, leaving VAT and associated data open to misreporting and exploitation, posing a risk to both individual and national security.\u0000Focusing on the design aspects of security, transparency, and efficiency, it will be argued that blockchain provides the opportunity to tackle non-compliance whilst achieving a balance in both taxpayer’s wants and tax authorities’ needs. Utilizing current examples of blockchain implementation, as well as a specific VAT Coin proposal, it is demonstrated that a blockchain solution can come in many forms; be it a public, private or consortium blockchain, with each type respectively achieving compliance whilst prioritizing different aspects of data security and privacy. Ultimately, it is indicated that a blockchain-based VAT system has the potential to enable a significant reduction in the risk of non-compliance, whilst streamlining taxpayer obligations and protecting valuable datasets.\u0000blockchain, VAT, tax, cryptocurrency, MTF, VATCoin, fraud, non-compliance, security, EU","PeriodicalId":43686,"journal":{"name":"EC Tax Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49521906","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In 2021 the European Commission proposed a new framework for taxing corporate income (“Business in Europe: Framework for Income Taxation”, or BEFIT). Consolidated profits of European Union (EU) based groups will be aggregated into a single tax base, and then allocated to Member States (MS) through a formulary approach. Critical issues in defining the formula comprise how assets (including intangibles) should be reflected. The purpose of this article is to discuss some core topics related to intangible recognition and its potential impact in the formulary approach considered in BEFIT. More precisely, the topics addressed are: (1) should intangibles be included in the asset component of the formula, alongside with sales and employment? (2) considering the several types of intangible assets, which ones would merit inclusion? Our view is that intangibles acquired to other companies belonging to the group (related party transactions) and intangibles developed internally by group members but that do not meet criteria for accounting recognition, should be out of the formula. Contrarily, intangibles developed internally that fulfil criteria for accounting recognition, and intangibles acquired to third (independent) parties should be included, with an exception for recognized goodwill. BEFIT, formula apportionment, EU corporate taxation, intangibles
{"title":"Article: BEFIT and Formulary Apportionment: Should Intangibles Be Included in the Formula?","authors":"A. Martins, Daniel G. Taborda","doi":"10.54648/ecta2022013","DOIUrl":"https://doi.org/10.54648/ecta2022013","url":null,"abstract":"In 2021 the European Commission proposed a new framework for taxing corporate income (“Business in Europe: Framework for Income Taxation”, or BEFIT). Consolidated profits of European Union (EU) based groups will be aggregated into a single tax base, and then allocated to Member States (MS) through a formulary approach. Critical issues in defining the formula comprise how assets (including intangibles) should be reflected.\u0000The purpose of this article is to discuss some core topics related to intangible recognition and its potential impact in the formulary approach considered in BEFIT. More precisely, the topics addressed are: (1) should intangibles be included in the asset component of the formula, alongside with sales and employment? (2) considering the several types of intangible assets, which ones would merit inclusion?\u0000Our view is that intangibles acquired to other companies belonging to the group (related party transactions) and intangibles developed internally by group members but that do not meet criteria for accounting recognition, should be out of the formula. Contrarily, intangibles developed internally that fulfil criteria for accounting recognition, and intangibles acquired to third (independent) parties should be included, with an exception for recognized goodwill.\u0000BEFIT, formula apportionment, EU corporate taxation, intangibles","PeriodicalId":43686,"journal":{"name":"EC Tax Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43797975","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The article examines how the subject of taxation appeared in the European Convention on Human Rights explaining how three judgments delivered by the European Court of Human in 2021 and 2022 expanded on the very same matters discussed in the travaux preparatoires to the Convention. Taxation and Human Rights, Travaux Preparatoires, ECHR, ECtHR, Article 1 of Protocol 1 ECHR, Excessive Burden, Proportionality, Right to Property, Atev Defence, Repo Transactions
{"title":"Forum: Disproportionate Taxation and the Right to Property; Some Recent Judgments of the ECtHR","authors":"R. Attard","doi":"10.54648/ecta2022015","DOIUrl":"https://doi.org/10.54648/ecta2022015","url":null,"abstract":"The article examines how the subject of taxation appeared in the European Convention on Human Rights explaining how three judgments delivered by the European Court of Human in 2021 and 2022 expanded on the very same matters discussed in the travaux preparatoires to the Convention.\u0000Taxation and Human Rights, Travaux Preparatoires, ECHR, ECtHR, Article 1 of Protocol 1 ECHR, Excessive Burden, Proportionality, Right to Property, Atev Defence, Repo Transactions","PeriodicalId":43686,"journal":{"name":"EC Tax Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43632753","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Directive (EU) 2021/2101 of the European Parliament and of the Council of 24 November 2021 amending Directive 2013/34/ EU as regards the public disclosure of income tax information by certain undertakings and branches, entered into force on 21 December 2021 and must be implemented by all EU Member States until 22 June 2023. It introduces the so-called ‘Public Country- By-Country Reporting’ system in the European Union. With these new transparency rules, the EU seeks to raise greater public scrutiny on the tax planning practices carried out by certain undertakings with activity in the EU. Despite its many achievements, the directive has several shortcomings, namely in what concerns compliance with legal certainty, issues in its implementation and effectiveness for achieving its ratio legis. After mapping these issues, we will put forward proposals that could be adopted by either the European or domestic legislator (the latter, at the implementation stage). Tax Planning, European Union, Tax Transparency, Public Country-By-Country Reporting, Legal Certainty, European legal harmonization
{"title":"Article: The Shortcomings of the EU Public Country-by-Country Reporting Directive","authors":"Manuel Campos Loureiro","doi":"10.54648/ecta2022011","DOIUrl":"https://doi.org/10.54648/ecta2022011","url":null,"abstract":"The Directive (EU) 2021/2101 of the European Parliament and of the Council of 24 November 2021 amending Directive 2013/34/ EU as regards the public disclosure of income tax information by certain undertakings and branches, entered into force on 21 December 2021 and must be implemented by all EU Member States until 22 June 2023. It introduces the so-called ‘Public Country- By-Country Reporting’ system in the European Union. With these new transparency rules, the EU seeks to raise greater public scrutiny on the tax planning practices carried out by certain undertakings with activity in the EU. Despite its many achievements, the directive has several shortcomings, namely in what concerns compliance with legal certainty, issues in its implementation and effectiveness for achieving its ratio legis. After mapping these issues, we will put forward proposals that could be adopted by either the European or domestic legislator (the latter, at the implementation stage).\u0000Tax Planning, European Union, Tax Transparency, Public Country-By-Country Reporting, Legal Certainty, European legal harmonization","PeriodicalId":43686,"journal":{"name":"EC Tax Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70854706","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The value added tax (VAT) remains a primary source of budget revenues across Europe. Consequently, compliance with it became critical for the fiscal security of Member States. Consequently, the issue of VAT compliance received EU level attention, and quantitative indicators – known as ‘VAT gaps’ – were produced for particular countries and the entire EU. Unfortunately, the most common top-down approach to the ‘VAT gap’ calculation delivers only the aggregate estimate of noncompliance. However, designing effective policy interventions requires a more detailed diagnosis as countering organized crime VAT fraud schemes requires different strategies than the shadow economy. This article proposes a simple approach to the top-down ‘VAT gap’ estimation that would enable distinguishing between the two categories by building upon the minimal set of data available to the tax authorities. An analysis of the Polish ‘VAT gap’ experience confirms the validity of proposed method, facilitating its application in a study encompassing multiple countries. ‘VAT gap’, top-down methodology, shadow economy, VAT fraud, carousel fraud
{"title":"Article: ‘VAT Gap’ Estimation: Distinguishing Between Informality and Fraud","authors":"D. Gajewski, Kamil Joński","doi":"10.54648/ecta2022012","DOIUrl":"https://doi.org/10.54648/ecta2022012","url":null,"abstract":"The value added tax (VAT) remains a primary source of budget revenues across Europe. Consequently, compliance with it became critical for the fiscal security of Member States. Consequently, the issue of VAT compliance received EU level attention, and quantitative indicators – known as ‘VAT gaps’ – were produced for particular countries and the entire EU. Unfortunately, the most common top-down approach to the ‘VAT gap’ calculation delivers only the aggregate estimate of noncompliance. However, designing effective policy interventions requires a more detailed diagnosis as countering organized crime VAT fraud schemes requires different strategies than the shadow economy. This article proposes a simple approach to the top-down ‘VAT gap’ estimation that would enable distinguishing between the two categories by building upon the minimal set of data available to the tax authorities. An analysis of the Polish ‘VAT gap’ experience confirms the validity of proposed method, facilitating its application in a study encompassing multiple countries.\u0000‘VAT gap’, top-down methodology, shadow economy, VAT fraud, carousel fraud","PeriodicalId":43686,"journal":{"name":"EC Tax Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43168915","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Order issued by the Court of Justice of the European Union on 18 May 2021 in Skellefteå Industrihus AB may have escaped the attention of most VAT scholars and practitioners. In my opinion, however, it is either based on a wrong interpretation of the Court’s case law in the ITH and Stichting Schoonzicht cases, or constitutes nothing less than a reversal of the CJEU landmark INZO and Breitsohl decisions. VAT, right to deduct, principle of neutrality, aborted transactions, change of use, adjustments, immovable property
{"title":"Forum: Order in Skellefteå Industrihus AB: A Reversal of the INZO, Ghent Coal Terminal and Breitsohl Jurisprudence?","authors":"Marie Lamensch","doi":"10.54648/ecta2022016","DOIUrl":"https://doi.org/10.54648/ecta2022016","url":null,"abstract":"The Order issued by the Court of Justice of the European Union on 18 May 2021 in Skellefteå Industrihus AB may have escaped the attention of most VAT scholars and practitioners. In my opinion, however, it is either based on a wrong interpretation of the Court’s case law in the ITH and Stichting Schoonzicht cases, or constitutes nothing less than a reversal of the CJEU landmark INZO and Breitsohl decisions.\u0000VAT, right to deduct, principle of neutrality, aborted transactions, change of use, adjustments, immovable property","PeriodicalId":43686,"journal":{"name":"EC Tax Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42556409","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Cordewener discusses the EU budgetary reform and tax harmonization. The ongoing COVID-19 crisis is bringing EU-wide harmonzation of national tax systems and a reform of the EU budgetary system, in particular its financing through so-called own resources, closer together. The political compromise reached by the European Council in July 2020 was followed by a Council Decision and an Interinstitutional Agreement in December 2020, paving the way for the creation of new own resources. In 2021, the Commission has tabled several proposals both for new own resources and for the harmonization of direct taxes. Expectations are high that 2022 will become a decisive year for the future of the fiscal landscape within the EU.
{"title":"Editorial: EU Budgetary Reform and Tax Harmonization: Becoming Brothers in Arms","authors":"Axel Cordewener","doi":"10.54648/ecta2022009","DOIUrl":"https://doi.org/10.54648/ecta2022009","url":null,"abstract":"Cordewener discusses the EU budgetary reform and tax harmonization. The ongoing COVID-19 crisis is bringing EU-wide harmonzation of national tax systems and a reform of the EU budgetary system, in particular its financing through so-called own resources, closer together. The political compromise reached by the European Council in July 2020 was followed by a Council Decision and an Interinstitutional Agreement in December 2020, paving the way for the creation of new own resources. In 2021, the Commission has tabled several proposals both for new own resources and for the harmonization of direct taxes. Expectations are high that 2022 will become a decisive year for the future of the fiscal landscape within the EU.","PeriodicalId":43686,"journal":{"name":"EC Tax Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2022-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49229002","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
On the basis of Article 113 TFEU the turnover taxes of the Member States should be harmonized to the extent that such harmonization is necessary to ensure the establishment and the functioning of the internal market and to avoid distortion of competition. From a revenue perspective, the harmonization seems a great success: EU VAT is a major source of revenue for all Member States. However, it is also clear that the harmonization process has stalled since the late seventies, as a result of which the current EU VAT system is inefficient, sensitive to fraud and complicated. As such it hardly facilitates the internal market, nor does it fulfil its full revenue potential for the Member States. All efforts undertaken since the seventies to further the harmonization process have failed due to an unwillingness at the Member States’ that is grounded in a claim of tax sovereignty. This article examines the substance of the tax sovereignty claim in light of EU VAT harmonization so far. It argues that both from the perspective of the internal market and the perspective of the Member States’ treasuries there is a compelling case for rekindling the harmonization process.
{"title":"Article: The Costly Stalemate of EU VAT Harmonization","authors":"S. Cornielje","doi":"10.54648/ecta2022007","DOIUrl":"https://doi.org/10.54648/ecta2022007","url":null,"abstract":"On the basis of Article 113 TFEU the turnover taxes of the Member States should be harmonized to the extent that such harmonization is necessary to ensure the establishment and the functioning of the internal market and to avoid distortion of competition. From a revenue perspective, the harmonization seems a great success: EU VAT is a major source of revenue for all Member States. However, it is also clear that the harmonization process has stalled since the late seventies, as a result of which the current EU VAT system is inefficient, sensitive to fraud and complicated. As such it hardly facilitates the internal market, nor does it fulfil its full revenue potential for the Member States. All efforts undertaken since the seventies to further the harmonization process have failed due to an unwillingness at the Member States’ that is grounded in a claim of tax sovereignty. This article examines the substance of the tax sovereignty claim in light of EU VAT harmonization so far. It argues that both from the perspective of the internal market and the perspective of the Member States’ treasuries there is a compelling case for rekindling the harmonization process.","PeriodicalId":43686,"journal":{"name":"EC Tax Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2022-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48671467","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Court of Justice of the European Union (CJEU) ruled that the national treatment provision in Article 49 Treaty on the Functioning of the European Union precludes Member States from disallowing consolidation between entities resident in the same Member State, where the top holding or intermediate holding company is resident in another Member State. After the United Kingdom left the EU from 1 January 2021, this case law no longer directly applies to situations with a top holding or intermediate holding company resident in the United Kingdom. However, the Trade and Cooperation Agreement concluded and in force between the EU and the United Kingdom (TCA) contains in Article 129 a provision on national treatment. The authors argue that the TCA could be interpreted in line with the national treatment provision in Article 49 TFEU and the case law of the CJEU on this. Notwithstanding the absence of any direct effect to the provision of the TCA, Member States should interpret their bilateral tax treaties in line with the TCA. The consequence is that the non-discrimination provisions in existing bilateral tax treaties between Member States and the United Kingdom should be interpreted in line with the TCA. Group regimes, Brexit, Trade and Cooperation Agreement, Non-Discrimination, National Treatment, Capital Ownership, Bilateral Tax Treaties, Interpretation of EU law, Interpretation of Bilateral Tax Treaties
{"title":"Article: The Potential Relevance of the CJEU Case Law on Group Taxation Under the EU/UK Trade and Cooperation Agreement","authors":"J. Steenbergen, D. Weber","doi":"10.54648/ecta2022008","DOIUrl":"https://doi.org/10.54648/ecta2022008","url":null,"abstract":"The Court of Justice of the European Union (CJEU) ruled that the national treatment provision in Article 49 Treaty on the Functioning of the European Union precludes Member States from disallowing consolidation between entities resident in the same Member State, where the top holding or intermediate holding company is resident in another Member State. After the United Kingdom left the EU from 1 January 2021, this case law no longer directly applies to situations with a top holding or intermediate holding company resident in the United Kingdom. However, the Trade and Cooperation Agreement concluded and in force between the EU and the United Kingdom (TCA) contains in Article 129 a provision on national treatment. The authors argue that the TCA could be interpreted in line with the national treatment provision in Article 49 TFEU and the case law of the CJEU on this. Notwithstanding the absence of any direct effect to the provision of the TCA, Member States should interpret their bilateral tax treaties in line with the TCA. The consequence is that the non-discrimination provisions in existing bilateral tax treaties between Member States and the United Kingdom should be interpreted in line with the TCA.\u0000Group regimes, Brexit, Trade and Cooperation Agreement, Non-Discrimination, National Treatment, Capital Ownership, Bilateral Tax Treaties, Interpretation of EU law, Interpretation of Bilateral Tax Treaties","PeriodicalId":43686,"journal":{"name":"EC Tax Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2022-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42080530","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
At the European level, the Anti-Tax Avoidance Directive (ATAD) introduced an interest limitation rule. The European legislature followed the recommendations of the Organization for Economic Cooperation and Development (OECD), according to which interest limitation rules are a suitable instrument to address schemes that aim to shift profits to other jurisdictions and thereby erode tax bases of Member States. The existing German interest limitation rule and the case law of the European Court of Justice (ECJ) had a tremendous impact on the drafting of the European rule and thus the European legislature decided to expose both cross-border and purely domestic interest payments to the interest barrier. The article shows that the extension of the interest limitation rule to purely domestic situations violates the European principle of equal treatment. Against this background, the article proves that the European internal market allows the application of a European interest limitation rule only in cross-border situations. Interest limitation rule, principle of equal treatment, ATAD, internal market, fundamental freedoms, ability-to-pay principle, market neutrality, economic efficiency, principle of subsidiarity, internal market competence
{"title":"Article: The Interest Limitation Rule in the Light of European Constitutional Law","authors":"Caroline Heber","doi":"10.54648/ecta2022006","DOIUrl":"https://doi.org/10.54648/ecta2022006","url":null,"abstract":"At the European level, the Anti-Tax Avoidance Directive (ATAD) introduced an interest limitation rule. The European legislature followed the recommendations of the Organization for Economic Cooperation and Development (OECD), according to which interest limitation rules are a suitable instrument to address schemes that aim to shift profits to other jurisdictions and thereby erode tax bases of Member States. The existing German interest limitation rule and the case law of the European Court of Justice (ECJ) had a tremendous impact on the drafting of the European rule and thus the European legislature decided to expose both cross-border and purely domestic interest payments to the interest barrier. The article shows that the extension of the interest limitation rule to purely domestic situations violates the European principle of equal treatment. Against this background, the article proves that the European internal market allows the application of a European interest limitation rule only in cross-border situations.\u0000Interest limitation rule, principle of equal treatment, ATAD, internal market, fundamental freedoms, ability-to-pay principle, market neutrality, economic efficiency, principle of subsidiarity, internal market competence","PeriodicalId":43686,"journal":{"name":"EC Tax Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2022-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41717779","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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