<p>Double taxation treaties play a vital part in the international relations between states</p><p>regarding taxation matters. Since double taxation can occur as soon as a person has</p><p>income in more than one state, it is very important that there can be effective remedies</p><p>to the problems that can occur in these situations. Double taxation treaties are</p><p>necessary in most situations created by international trade and they are even more</p><p>important in such a free flowing economic co-operation such as the EU, where the</p><p>trade between the Member States is not only free but also very frequent.</p><p>Most double taxation treaties are based on the Model Treaty created by the OECD.</p><p>Even states not members of the organization use it as a model for their treaties. This</p><p>means that treaties between Member States of the EC are often rather similar, but</p><p>many times have been drafted without consideration taken to EC law. This can create</p><p>problems since the European Court of Justice (ECJ) has stated in its case law that</p><p>even though the Member States are solely competent when it comes to direct taxation,</p><p>that competence must be used in accordance with EC law. Since double taxation</p><p>treaties are directed at flows of income and capital between states, it is most</p><p>probable that they can run afoul of EC law.</p><p>After some judgments of the ECJ the situation is clearer now, but there are still some</p><p>possible future problems. Examples of such problems are trailing taxes, limitations of</p><p>benefits and the most favoured nation (MFN) principle. The latter has been before</p><p>the Court, but there are many questions surrounding the MFN principle that has not</p><p>been answered satisfactorily. Even if more cases are brought before the Court and it</p><p>gives more guidance on how the Member States shall conclude treaties with each</p><p>other, it is still preferable with proper EC legislation on the subject. It must also be</p><p>mentioned that the ECJ has shown reluctance to disrupting the tax treaty networks in</p><p>place and has been reluctant to dismiss rules based on the OECD Model Treaty.</p><p>Several different solutions to these problems have been put forward, ranging from</p><p>doing almost nothing and just letting the development in the case law have its way to</p><p>a complete regulation of these issues through legislation by the EC. The two most interesting</p><p>solutions presented are a Multilateral EU Tax Treaty or an EU Model Tax</p><p>Treaty. Both of these two different methods would mean that the problems would</p><p>have a proper solution in that it would implement common rules that would be applicable</p><p>over the whole of the EU.</p>
Identifer | oai:union.ndltd.org:UPSALLA/oai:DiVA.org:hj-1074 |
Date | January 2008 |
Creators | Muren, Gustaf, Krohn, Peter |
Publisher | Jönköping University, JIBS, Commercial Law, Jönköping University, JIBS, Commercial Law |
Source Sets | DiVA Archive at Upsalla University |
Language | English |
Detected Language | English |
Type | Student thesis, text |
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