<p>Abstract</p><p>The freedom of establishment in Articles 43 and 48 EC is a fundamental freedom within the EU meaning that companies are free to set up secondary establishments in any other Member State. The freedom of establishment is an important means to achieve the com-pletion of the internal market and therefore it is important that this freedom is protected. Member States are obliged to legislate in accordance with the objectives of the fundamental freedoms, still Member States are restricting Articles 43 and 48 EC by applying discrimina-tory national legislation regarding direct taxation. In the Cadbury Schweppes judgment from September 2006 the ECJ found the British CFC legislation to be contrary to Community law. The purpose of CFC legislation is to prevent tax avoidance by conferring additional tax upon companies having subsidiaries in low tax states. According to the judgment in Cadbury Schweppes, if the CFC rules are too general in its application they are violating the freedom of establishment. Hence, the CFC legislation must be aimed specifically at “wholly artificial arrangements” aimed at circumventing national tax normally payable. Therefore it is of importance, in the context of applying CFC rules, to clarify the difference between use and abuse of freedom of establishment. It is also important to note that the CFC rules ap-ply even when a subsidiary is established outside the EU.</p><p>The concept of abuse of Community law has been developed through case law and prohib-its companies to improperly use the provisions of Community law in order to circumvent national legislation. Even if an establishment in another State is made to avoid tax in the State of origin, it is not necessarily abuse of the freedom of establishment since companies are allowed to choose to establish subsidiaries in the Member States with least restrictive rules. The ECJ stated that establishing subsidiaries with the sole purpose to benefit from the lower tax regime do not constitute an abuse of the freedom of establishment as long as the subsidiaries pursue genuine economic activity. The criteria for what is regarded as eco-nomic activity has been discussed in both value added tax and direct tax cases. The re-quirements so far is that the subsidiary established has to be physically present in the host State on a durable basis and have staff and equipment to a certain degree. The ECJ has as-sessed the criteria similarly in value added tax and direct tax cases and stated that the activ-ity has to be considered per se and without regard to its purpose or result. The activity also has to be based on objective factors and be ascertainable by third parties.</p><p>The Cadbury Schweppes case is the first case in the area of CFC legislation and the Court has provided little guidance regarding what constitutes a “wholly artificial arrangement”. As a consequence of this judgement some Member States have already changed their CFC legis-lation to comply with Community law. Nevertheless, there are cases pending before the ECJ that are further questioning the application of CFC rules and how to define a “wholly artificial arrangement”. The judgement of these cases may result in more changes in the na-tional legislation of the Member States. The future development of the difference between use and abuse of freedom of establishment is important for the protection of the principle of legal certainty. A clarification of what constitutes a “wholly artificial arrangement” will improve the foreseeability for companies and their cross-border transactions will be more efficient.</p> / <p>Sammanfattning</p><p>Etableringsfriheten i artiklarna 43 och 48 EG är en av de grundläggande friheterna inom EU som innebär att företag är fria att etablera dotterbolag i andra medlemsländer. Etable-ringsfriheten är ett viktigt medel för att uppnå målen med den gemensamma marknaden och därför är det viktigt att denna frihet respekteras. Medlemsländerna är skyldiga att lag-stifta i ljuset av de grundläggande friheterna, trots det finns diskriminerande skattelagstift-ning som strider mot artiklarna 43 och 48 EG. I Cadbury Schweppes domen från september 2006 fann EG-domstolen att de brittiska CFC reglerna strider mot gemenskapsrätten. Syf-tet med CFC regler är att förhindra skatteundandragande genom att löpande beskatta in-komster från dotterbolag etablerade i lågbeskattade länder. CFC regler som tillämpas gene-rellt är enligt Cadbury Schweppes domen i strid med etableringsfriheten. Därmed måste CFC reglerna tillämpas specifikt på ”konstlade upplägg” som har som enda syfte att undvika na-tionell skatt. Det är därför viktigt att klargöra skillnaden mellan bruk och missbruk av eta-bleringsfriheten. I detta sammanhang är det viktigt att poängtera att CFC reglerna är till-lämpliga även på dotterbolag som är etablerade i ett icke-medlemsland.</p><p>Konceptet om missbrukande av EG-rätten har utvecklats i praxis och förbjuder företag att missbruka bestämmelserna i gemenskapsrätten för att kringgå nationell lagstiftning. Även om ett dotterbolag har etablerats i ett medlemsland enbart för att utnyttja den låga skatteni-vån är det nödvändigtvis inte missbruk av etableringsfriheten eftersom företag har rätt att etablera dotterbolag i det land som är mest fördelaktigt ur skattehänseende. EG-domstolen har fastställt att etablering av dotterbolag enbart för att utnyttja en mer fördelaktig skattere-gim inte utgör missbruk av etableringsfriheten om dotterbolaget bedriver verklig ekono-misk verksamhet. Kriterierna för vad som anses utgöra verklig ekonomisk verksamhet har diskuterats i såväl mervärdesskatterättsliga som företagsskatterättsliga mål. Hittills uppställ-da krav är att det etablerade dotterbolaget måste vara varaktigt fysiskt närvarande i värdsta-ten samt till en viss grad ha personal och utrustning så att tredje part kan förvissa sig om dess ekonomiska verksamhet. Utvärderingen av den ekonomiska verksamheten måste ske självständigt utan hänsyn till dess syfte och resultat.</p><p>Cadbury Schweppes är det första målet angående CFC lagstiftning och EG-domstolen har endast tillhandahållit begränsad vägledning om vad som utgör ett ”konstlat upplägg”. Som en konsekvens av denna dom har några medlemsländer redan ändrat sin CFC lagstiftning så att den överensstämmer med EG-rätten. Icke desto mindre finns det en del oavgjorda mål som ytterligare ifrågasätter CFC reglernas tillämpning och definitionen av ”konstlade upplägg”. Avgöranden i dessa mål skulle kunna resultera i att medlemsländerna måste göra ytterligare ändringar i sin lagstiftning. Den framtida utvecklingen av vad som är skillnaden mellan bruk och missbruk av etableringsfriheten är viktig för rättssäkerheten. Ett klargö-rande om vad som utgör ett ”konstlat upplägg” kommer att öka förutsebarheten för före-tag vilket leder till en effektivisering av deras gränsöverskridande transaktioner.</p>

Den 1 januari 2009 infördes regler som begränsar rätten för företag att göra ränteavdrag, vilket har till syfte att förhindra aggressiv skatteplanering som sker genom ränteupplägg. Två undantag till denna begränsade rätt till ränteavdrag benämns tioprocentsregeln och ventilen. Genom dessa får ränteavdrag göras om mottagaren av ränteinkomsten beskattas med tio procent eller om förfarandet är affärsmässigt motiverat. Dessa undantagsregler har dock blivit utsatts för kritik. Kritiken som har framförts är att den aggressiva skatteplaneringen som sker genom ränteupplägg inte minskat trots tillkomsten av reglerna om ränteavdragsbegränsningar och det finns även frågetecken om tioprocentsregeln är förenlig med etableringsfriheten inom EU. Med anledning av detta har regeringen lagt fram förslag om att skärpa reglerna om ränteavdragsbegränsningar. Syftet med denna uppsats är därför att utreda huruvida en skärpning av tioprocentsregeln och ventilen bör ske samt utreda hur en sådan skärpning, med anledning av regeringens förslag, bör utformas. I uppsatsen används en traditionell juridisk metod för att beskriva gällande rätt och uppsatsen gör anspråk på att vara rättsvetenskaplig när frågorna i syftet besvaras. En skärpning av tioprocentsregeln och ventilen är nödvändig då bolagsskattebasen idag är i behov av ett skydd som ingen av dessa två regler i sin nuvarande utformning kan ge. Dock bör ingen av de föreslagna skärpningarna angående tioprocentsregeln som regeringen lagt fram införas, då de måste anses som allt för långtgående. Angående ventilen finns det emellertid två förslag som måste anses så pass välavvägda och stärkande för ventilens utformning att dessa bör införas. / The first of January 2009 rules that limited the right for companies to make deduction of interest were introduced and the purpose was to prevent aggressive tax planning through advanced interest approaches. Two exceptions to this limitation are called the ten percent rule and the valve. Through these exceptions interest deduction can be done if the receiver of the interest is taxed by at least ten percent or if the procedure can be commercially justified. However the ten percent rule and the valve have been subject to criticism. The criticism put forward argue that the aggressive tax planning through interest approach have not declined despite the creation of the rules of interest deduction limitations and there are also ambiguities if the ten percent rule is compatible with the freedom of establishment within the EU. For this reason, the Government has submitted a proposal to tightening the rules of interest deduction limitations. Hence the purpose of this study is to investigate whether a tightening of the ten percent rule and the valve should occur and examine how such a tightening, on the occasion of the government's proposals, should be formulated. The thesis applies a traditional legal method used to describe the law and the thesis claims to be the jurisprudential when the questions in the purpose are answered. The tightening of the ten percent rule and the valve is necessary because the corporate tax base is in need of protection and neither of these two rules in their present form is able to provide this protection. However, none of the proposals regarding the ten percent rule which the government has submitted should be introduced because they must be regarded as disproportionate extensive. Regarding the valve there are two proposals that should be implemented since they must be considered well balanced and invigorating for the valve’s formulation.

On January 1, 2010, the Swedish government changed the national rule on taxation of loans between Swedish companies and their shareholders to also comprise loans granted by foreign companies. By changing the rule to also comprise foreign companies, the government aimed to eliminate the newly discovered tax planning which is carried out by an owner establishing a holding company in another Member State from which he lends tax-free means for private consumption. These proceedings result in major tax revenue losses for Sweden since the shareholder’s income was not taxable in Sweden before the change. This change has been subject for criticism by the consultative bodies in the government bill and in the legal debate. The expression of discontent is due to the fact that the changes do not comply with the freedom of establishment. As far as is known, no one has analyzed whether this statement is correct. Therefore, this thesis aims to provide an answer to whether the changes of the rule on taxation of prohibited loans are compatible with the freedom of establishment and consequently whether the Swedish government made a mistake when changing the rule to also comprise foreign companies. Due to the freedom of establishment, it is prohibited for the Member States to take measures which restrict or make nationals refrain from establishing abroad. Intra-state loans are prohibited why they hardly ever occur and the taxation on loans therefore in practice only applies to foreign companies. Legislation in a Member State which only applies to foreign persons constitutes prohibited discrimination. Further, the high tax burden hinders nationals from taking advantage of another Member State’s more favourable legislation and makes the nationals refrain from establishing in other Member States. It is therefore considered that the rule is restrictive to the freedom of establishment. However, such a restrictive rule as in this case is justified by the aim of preventing tax avoidance taken together with the balanced allocation of taxing power between the Member States. Thus, the government makes Sweden breach EU law since the rule is not proportionate despite the justifications. The rule is too general designed since it is restrictive to all foreign undertakings and not just the holding companies with which the tax planning are performed. Further, there are other less restrictive solutions to the problem which have the same effect as the rule in question.

The idea of internal market is one of the basic concepts of the European integration. The internal market of the European Union is a single market in which the free movement of goods, services, capital and persons is ensured. This thesis focuses on the free movements of legal persons in the European Union, namely freedom of establishment and the possibility of cross-border transfer of a company's registered office. This business focused freedom is regulated mainly by primary law in Articles 49 a 54 TFEU and its main objective is to enable the exercise of economic activities even in the territory of other Member States. The aim of this thesis is to investigate the regulation and development of case law regarding freedom of establishment of companies and give their comprehensive analysis. Furthermore, the thesis points out the fact that the choice of company's seat and its change is often associated with advantageous conditions laid down by national legislation. Companies often choose countries which have minimum requirements for their establishment and existence. States are aware of this behavior. Consequently, some of them reduce their legal standards and try to attract companies into their territory. This may cause the battle of jurisdictions. The thesis consists of the initial and final part and...

The present thesis is concerned with private international law for corporate and insolvency disputes in the context of freedom of establishment. First, it presents the traditional rules of conflict applicable to corporate disputes that have been implemented in some major jurisdictions. Second, it analyses the relevant leading judgments of the European Court of Justice and it demonstrates the way in which, contrary to popular belief, the real seat theory has not been held contrary to freedom of establishment. The thesis then deals with the concept of letter-box companies and examines the limitations that are being placed to the use of freedom of establishment. This is followed by a juxtaposition of the factors that have lead and could lead to regulatory competition for corporate law in the USA and the EU respectively. A modest approach is taken towards the possibility of the latter occurring in the EU. Third, the thesis examines the treatment of insolency disputes in this context. A substantial part of it is dedicated to the definition of the basis for international jurisdiction for the opening of insolvency proceedings, namely the centre of main interests. It argues in favour of an objective test for the identification of the centre of main interests (COMI) and the allocations of certain burdens on both the debtor and the creditors. It then focuses on the treatment of forum shopping in the context on international insolvencies. Based on considerations of consent and economic efficiency, it suggests a definition, according to which certain transfers of the COMI should not amount to forum shopping. Finally, the thesis examines the possibility of a regulatory competition for insolvencies in the EU and seeks to demonstrate that the conditions for such a competition are more analogous between US corporate law and EU insolvency, rather than company, law.

The first chapter of my thesis defines the key terms necessary for understanding the concept of mobility of companies in the private international law. The fundamental difference between lex societatis and the nationality of company are terms which are not identical, despite their frequent confusion. It is the lex societatis which is defining for the inner organisation of the company. According to the reasoning of the Court of European Union, in the cross border transfer of the statutory seat should inevitably lead to change of lex societatis. However, in order to decide on which legal order is applicable for defining the lex societatis of a company, we have to look into the international private rules of a particular country. There are two major theories from which stem the legal orders of all member countries, the real seat theory and incorporation theory. This chapter explores their pros and cons, as well as practical consequences of their application on the possibility of cross-border transfer of a seat of a company. The second chapter of my thesis outlines relevant European Union law which lies behind the concept of cross border mobility of companies. The Treaty provisions on freedom of establishment are reviewed in the light of the Court case law. The most relevant decisions of the Court are...

<p>This thesis analyses the scope of the treaty articles 43 and 48 concerning the freedom of establishment of companies. The interpretations of these articles made by the Commission and the European Court of Justice are analysed to see whether they are consistent. The analysis encompasses the provisions and directives in the field of EC Company Law as well as the essential case law from the ECJ regarding these issues. The conclusion that must be drawn from this thesis is that the Court of Justice adds the momentum in these issues whilst the Commission is held up by political considerations.</p>

This thesis analyses the scope of the treaty articles 43 and 48 concerning the freedom of establishment of companies. The interpretations of these articles made by the Commission and the European Court of Justice are analysed to see whether they are consistent. The analysis encompasses the provisions and directives in the field of EC Company Law as well as the essential case law from the ECJ regarding these issues. The conclusion that must be drawn from this thesis is that the Court of Justice adds the momentum in these issues whilst the Commission is held up by political considerations.

This Bachelor’s thesis focuses on those terms that, from a Swedish perspective, have to be fulfilled to entitle deduction for definitive losses in a cross-border merger situation. The thesis analyses one of the ten rulings from the Swedish Supreme Administrative Court which were published in 2009.The ruling is analysed in the light of the Treaty on the Functioning of the European Union, the merger directive and the Court of Justice rulings in Marks &amp; Spencer and Lidl. The purpose is to examine if the Swedish rules concerning cross-border mergers is compatible with the EU-law. The Swedish rules concerning mergers are found in chapter 37 in the Swedish income tax act. To enjoy the rights of the rules in chapter 37 the merger needs to be qualified. The criterion in 11 § stands out as a clear obstacle for the deduction of losses and is therefore examined thoroughly. It states that the transferor company needs to be taxable for some kind of activity in Sweden immediately before the merger. That criterion is not fulfilled if the company is situated in another member state. In the Marks &amp; Spencer case, the Court of Justice stated that a rule which hinders deduction for losses which is considered to be definitive could be a possible breach of the freedom of establishment. The Swedish rules concerning qualified mergers in chapter 37 in the Swedish income tax act was questioned in the case RÅ 2009 ref 13. The criterion stated in § 11 was discussed first by the Swedish tax board and then by the Swedish Supreme Administrative Court as a possible breach of the freedom of establishment. It is in my opinion clear that when a loss is definitive the loss should be entitled to deduction, thus the 11 § could therefore constitute a breach of the freedom of establishment.

Due to constant expansion of the European Community, the harmonization in the fields of European company law and development of internal European market have emerged into considerably bigger and more complex issues. Aspects of corporate mobility, having a direct simultaneous connection to the right of freedom of establishment, have been one of the most problematic spheres for reaching international consensus. Despite numerous directives adopted by Member States (MS) European undertakings continue to be regulated by national legislations. The idea of a common European limited liability company, sc. Societas Europaea (SE), was put into process of realization in order to facilitate the internal trade and to help multinational companies to obtain legal certainty and trans-European character by rising above the variety of national legislations. Furthermore, the SE was to make cross-border enterprise management more flexible and less bureaucratic and to help improving the general competitiveness of Community enterprises. The process of formation of the European Company Statue took over forty years and the result of the final adoption turned out to be something completely different from the es-sential idea of the European Company. Due to the historical, socio-political and legal dif-ferences MSs had difficulties with compromising on the majority of aspects and instead of one common SE form, the Community had basically adopted 28 different alternatives, loosing the original valuable supranational character. The strongest advantage of the SE are the rights conferred to it by the Regulation. The frequent use of renvoi technique undermines this aspect of SE’s precedence over national legislation. The true potential of the European Company remains thus highly theoretical and the current shape of the SE presents only a weak alternative to the national corporate forms of the MSs. A European Company cannot be freely incorporated solely by investment of private capi-tal. There is a need for existence of at least two legal enterprises which furthermore must fall under the scope of different national legislations. In other words in order to create an SE, the definite cross-border element between companies at hand must be visible or can be identified. It can be formed by means of merger, creation of a holding, incorporation of a subsidiary or conversion. The subscribed capital for the SE shall at its minimum equal €120 000. The Council Regulation on SE provides a flexible management regime, permit-ting companies to choose between two administration systems (one-tier/two-tier) that exist in the Community. The issues of employee involvement are regulated in separate directive that is a supplement to the Regulation. Despite the recent developments of freedom of establishment through the case-law, the matter remains utterly complicated. The SE may seem on one hand as a logical solution, being able to incorporate in different MSs, to merge or to form a holding without burden-some processes of winding-up and re-incorporation. On the other hand the Regulation re-stricts the mobility of the SE by provisions prohibiting location of registered and head of-fice of the company in different MSs, depriving it thus from one of the basic Community freedoms. Prudent attitude to mobility and aspiration to protect national interests have partly diminished essential advantages of the SE. It appears to be impossible to conduct business in one MS while being registered in another. Possible amendments are awaited shortly, but so far the SE has definitely not achieved many of practical goals considering mobility and has fulfilled very few of its important theoretical expectations. National perspective on the adoption of the SE seems to be relatively positive, accepting the theoretical advantages of corporate mobility, options of structure and management and possibility to obtain an essentially European trademark. However, there is also an amount of skepticism addressed to deficient practical functioning due to the lack of uniform legislation. European organizations and companies tend to have a slightly more cautious and restrained approach. The idea of a European Company is praised more for its genuinely European character. Representatives for established SEs prefer to talk about internationalization of trade, European recognition, enhanced competitiveness and market integration, while very little speaks about the true practical potential. The SE is furthermore often observed as a useful but still mainly theoretical legal instrument, playing an indispensable part in the overall development of European company law. Political motives seem to be considerably heavier while discussing the question of necessity of adoption that later attracted so little interest. Additionally, the basic idea of the SE also seems to include definite measures for general European unification, granting SE the symbolic value of commonly European enterprise. Consequently, failing in purely practical application in the absence of a clear need for common limited liability company, the SE has its theoretical and crucially important socio-psychological purposes.