DOCSLIB.ORG

Tax Co-Ordination in the European Union

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Tax Co-Ordination in the European Union Directorate-General for Research WORKING PAPER Tax co-ordination in the European Union Economic Affairs Series ECON 125 EN This publication is available in EN (original) FR DE. At the end of this document you will find a full list of recent Economic Affairs Series Publications. PUBLISHER: European Parliament L-2929 Luxembourg AUTHORS: Ben Patterson and Dr. Alicia Martinez Serrano (University of Murcia) EDITOR: Ben Patterson Directorate General for Research Economic, Monetary and Budgetary Affairs Division Tel.: (00352)4300-24114 Fax: (00352)4300-27721 e-mail: [email protected] The opinions expressed in this working paper are those of the authors and do not necessarily reflect the position of the European Parliament. Reproduction and translation of this publications are authorised, except for commercial purposes, provided that the source is acknowledged and that the publisher is informed in advance and supplied with a copy. Manuscript completed in December 2000. Directorate-General for Research WORKING PAPER Tax co-ordination in the European Union Economic Affairs Series ECON 125 EN 12-2000 TAX CO-ORDINATION Preface This working document is an updated version of the study originally published in 1998 under the title “Tax Competition in the European Union”. This edition consists of three sections. Part I. The General Introduction covers the recent history of tax policy within the European Union, and examines the current situation in the fields of Corporate Taxation, the Taxation of Savings, the Taxation of Labour and Indirect Taxation (VAT and excise duties). Part II. Taxes on Labour, on Income from Capital and on Corporations in the European Union: a comparative analysis provides a detailed survey of how direct taxes – personal and corporate – are levied within the European Union. Part III. Competition or Co-operation? discusses the main issues in the current debate on the alternative approaches of competition and co-operation in the tax field. References to all sections are listed at the end. iii PE 300.524 TAX CO-ORDINATION iv PE 300.524 TAX CO-ORDINATION CONTENTS PREFACE ...........................................................................................................................................................III SUMMARY AND CONCLUSIONS ................................................................................................................ IX PART I: GENERAL INTRODUCTION .................................................................................................................... IX The Code of Conduct....................................................................................................................................ix Interest and royalty payments.......................................................................................................................ix The “withholding tax” proposal...................................................................................................................ix Indirect taxation ............................................................................................................................................x PART II: TAXES ON LABOUR, INCOME CAPITAL AND CORPORATIONS: A COMPARATIVE ANALYSIS................. X Taxes on labour.............................................................................................................................................x Taxes on income from capital......................................................................................................................xii Corporate taxes ...........................................................................................................................................xii PART III: COMPETITION OR CO-OPERATION? .................................................................................................. XIII SOME DEFINITIONS ....................................................................................................................................XVI PART I: GENERAL INTRODUCTION ............................................................................................................1 HISTORICAL BACKGROUND ................................................................................................................................1 Tax and the Single Market.............................................................................................................................1 The New Approach ........................................................................................................................................2 The "Monti Package" and the Code of Conduct............................................................................................3 CORPORATE TAXATION ......................................................................................................................................4 The Ruding Report.........................................................................................................................................5 The Code of Conduct.....................................................................................................................................9 The "Primarolo Group"...............................................................................................................................11 The taxation of interest and royalty payments,............................................................................................13 THE TAXATION OF PERSONAL SAVINGS .............................................................................................................14 General principles.......................................................................................................................................14 The proposed Directive ...............................................................................................................................15 The November Agreement ...........................................................................................................................17 THE OECD: “HARMFUL TAX PRACTICES” .......................................................................................................18 Reactions and Contrasts..............................................................................................................................19 TAXES ON EMPLOYMENT INCOME.....................................................................................................................21 General principles.......................................................................................................................................22 Frontier workers..........................................................................................................................................23 Co-operation and exchange of information.................................................................................................23 Social security .............................................................................................................................................24 Supplementary pensions ..............................................................................................................................25 Social issues ................................................................................................................................................25 Other issues .................................................................................................................................................26 INDIRECT TAXATION.........................................................................................................................................27 Value Added Tax .........................................................................................................................................27 Telecommunications and e-commerce.........................................................................................................28 The VAT system ...........................................................................................................................................29 Rates of VAT................................................................................................................................................30 Excise duties................................................................................................................................................31 Indirect tax fraud.........................................................................................................................................33 PART II: TAXES ON LABOUR, ON INCOME FROM CAPITAL AND ON CORPORATIONS IN THE EUROPEAN UNION: A COMPARATIVE ANALYSIS.............................................................35 FOREWORD .......................................................................................................................................................35 TAXES ON LABOUR ...........................................................................................................................................36 Main tax elements........................................................................................................................................36 Effective tax rates by family type and wage level ........................................................................................43 v PE 300.524 TAX CO-ORDINATION Employers' contributions.............................................................................................................................47
Load more

Recommended publications
  • Visual Representation of Tax Issues Hegemony and the Control of Technical Devices
    Visual Representation of Tax Issues Hegemony and the Control of Technical Devices Silke Ötsch, Priv.-Doz. Dr. Sociologist, Innsbruck (Austria) [email protected] http://silke.oetsch.net Conference Intersections of Finance and Society 2017 2-3 November 2017 City University London, UK Abstract: The contribution draws the attention to visual and narrative strategies used in a field perceived as technical and links them to problems of political economy. Ten years after the financial crisis start- ing in 2007/2008, main elements of the the financial system persists – among others the misuse of offshore finance. The system continues to exist, although it contradicts most citizens’ sense of justice because privileged actors benefit by breaking the law. I assume that one reason for the persistence is the technical approach to the topic. Most opponents of offshore finance are not aware that tax discourses address the unwitting level of perception and transport biased meaning. This implies techniques of framing, the use of images (e.g. tropical islands or shelters), narratives and theories. Critics of the system thwart the own intentions by using biased images, language and narratives. Nonetheless, changing hegemony in tax discourses risks to lead to symbolic actions if hegemony is not accompanied by the control over technical devices. Here, I will first depict conflicts of interest in tax flight and avoidance and most important initiat- ives to regulate it. Secondly, I sum up findings about the use of metaphors and deep frames in news- paper articles on offshore finance. I then reconstruct unconsciously promoted images by analysing visual representations of tax related issues in the internet.
    [Show full text]
  • Gunpowder Empires
    Gunpowder Empires James Gelvin “Modern Middle East” Part 1 - Chapter 2 expanded lecture notes by Denis Bašić Gunpowder Empires • These empires established strong centralized control through employing the military potential of gunpowder (naval and land-based siege cannons were particularly important). • The major states of the Western Hemisphere were destroyed by European gunpowder empires while throughout the Eastern Hemisphere, regional empires developed on the basis of military power and new centralized administrations. • The world gunpowder empires were : the Ottoman, Safavid, Moghul, Habsburg, Russian, Chinese, and Japanese. • Emperor vs. King Military Patronage State • brought to the Middle East by Turkic and Mongolian rulers • Their three main characteristics are : • they were essentially military • all economic resources belonged to the chief military family or families • their laws combined dynastic laws, local laws, and Islamic law (shari’a) Ottoman Empire - 1st Islamic gunpowder empire • The Ottoman Empire was the first of the three Islamic empires to harness gunpowder. • Most probably the Ottomans learned of gunpowder weapons from renegade Christians and used it to devastating effects in the Battle of Kosovo in 1389. • The Ottomans used the largest cannons of the time to destroy the walls and conquer Constantinople in 1453. They conquered Constantinople the same year when the Hundred Years’ (116-year) War in Europe ended. The Siege of Constantinople (painted 1499) Sultan Mehmed II (1432-1481) on the road to the siege of Constantinople painter : Fausto Zonaro (1854-1929) The Great Ottoman Bombard Prior to the siege of Constantinople it is known that the Ottomans held the ability to cast medium-sized cannon, yet nothing near the range of some pieces they were able to put to field.
    [Show full text]
  • Taxation and Voting Rights in Medieval England and France
    TAXATION AND VOTING RIGHTS IN MEDIEVAL ENGLAND AND FRANCE Yoram Barzel and Edgar Kiser ABSTRACT We explore the relationship between voting rights and taxation in medieval England and France. We hypothesize that voting was a wealth-enhancing institution formed by the ruler in order to facili- tate pro®table joint projects with subjects. We predict when voting rightsand tax paymentswill be linked to each other, as well asto the projectsinducing them, and when they will become separated. We classify taxes into three types: customary, consensual and arbitrary. Customary taxes that did not require voting were dominant in both countriesin the early medieval period. Thesepay- ments, ®xed for speci®c purposes, were not well suited for funding new, large-scale projects. Consensual taxation, in which voting rightsand tax paymentswere tightly linked, wasusedto ®nance new, large-scale collective projects in both England and France. Strong rule-of-law institutions are necessary to produce such taxes. In England, where security of rule remained high, the rela- tionship between tax payments and voting rights was maintained. In France, an increase in the insecurity of rule, and the accompany- ing weakening of voting institutions, produced a shift to arbitrary taxation and a disjunction between tax payments and voting rights. These observations, as well as many of the details we con- sider, are substantially in conformity with the predictions of our model. KEY WORDS . medieval history . taxation . voting Introduction The relationship between taxation and voting rights has been a central issue in political philosophy and the cause of signi®cant poli- tical disputes, as `no taxation without representation' exempli®es.
    [Show full text]
  • The Inward Investment and International Taxation Review
    The Inward Investment and International Taxation Review Third Edition Editor Tim Sanders Law Business Research The Inward Investment and International Taxation Review THIRD EDITION Reproduced with permission from Law Business Research Ltd. This article was first published in The Inward Investment and International Taxation Review, 3rd edition (published in January 2013 – editor Tim Sanders). For further information please email [email protected] The Inward Investment and International Taxation Review THIRD EDITION Editor Tim Sanders Law Business Research Ltd The Law Reviews THE MERGERS AND ACQUISITIONS REVIEW THE RESTRUCTURING REVIEW THE PRIVatE COMPETITION ENFORCEMENT REVIEW THE DISPUTE RESOLUTION REVIEW THE EMPLOYMENT LAW REVIEW THE PUBLIC COMPETITION ENFORCEMENT REVIEW THE BANKING REGUlatION REVIEW THE INTERNatIONAL ARBITRatION REVIEW THE MERGER CONTROL REVIEW THE TECHNOLOGY, MEDIA AND TELECOMMUNICatIONS REVIEW THE INWARD INVESTMENT AND INTERNatIONAL TAXatION REVIEW THE CORPORatE GOVERNANCE REVIEW THE CORPORatE IMMIGRatION REVIEW THE INTERNatIONAL INVESTIGatIONS REVIEW THE PROJECts AND CONSTRUCTION REVIEW THE INTERNatIONAL CAPItal MARKEts REVIEW THE REAL EstatE LAW REVIEW THE PRIVatE EQUITY REVIEW THE ENERGY REGUlatION AND MARKEts REVIEW THE INTELLECTUAL PROPERTY REVIEW THE ASSET MANAGEMENT REVIEW THE PRIVATE WEALTH AND PRIVATE CLIENT REVIEW THE MINING laW REVIEW THE ANTi-BriBERY AND ANTi-CORRUPTION REVIEW THE EXECUTIVE REMUNERatION REVIEW www.TheLawReviews.co.uk Contents PUBLISHER Gideon Roberton BUSINESS DEVELOPMENT MANAGERS Adam Sargent, Nick Barette MARKETING MANAGER Katherine Jablonowska PUBLISHING ASSISTANT Lucy Brewer PRODUCTION CO-ORDINatOR Lydia Gerges HEAD OF EDITORIAL PRODUCTION Adam Myers PRODUCTION EDITOR Anne Borthwick SUBEDITOR Caroline Rawson EDITor-in-CHIEF Callum Campbell MANAGING DIRECTOR Richard Davey Published in the United Kingdom by Law Business Research Ltd, London 87 Lancaster Road, London, W11 1QQ, UK © 2013 Law Business Research Ltd No photocopying: copyright licences do not apply.
    [Show full text]
  • Zbwleibniz-Informationszentrum
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Herlin-Giret, Camille Article Avoiding and protesting taxes: Wealthy people and tax consent economic sociology_the european electronic newsletter Provided in Cooperation with: Max Planck Institute for the Study of Societies (MPIfG), Cologne Suggested Citation: Herlin-Giret, Camille (2017) : Avoiding and protesting taxes: Wealthy people and tax consent, economic sociology_the european electronic newsletter, ISSN 1871-3351, Max Planck Institute for the Study of Societies (MPIfG), Cologne, Vol. 19, Iss. 1, pp. 29-37 This Version is available at: http://hdl.handle.net/10419/175569 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu 29 wealthy people, little is known about it except for what we find in a few book-length studies.
    [Show full text]
  • Socialeconomic and Committee
    EUROPEAN COMMUNIT!ES BULLETIN 9 SOCIALECONOMIC AND COMMITTEE a oIJJ EN THE ECONOMIC AND SOCIAL COMMITTEE FACTS AND FIGURES - November 1996 OF THE EUROPEAN COMMUNITIES Chair 4. Sub-committees Ic.m"-l 2rrs The decision-making o,*" l- The ESC has the right to set up temporary sub-com- lP.dhhenl I process in the Com- President: Tom JENKINS -lI mittees, for specrfic issues. These sub-committees (United Kingdom - Workers) munity (simplified) tt operate on the same Iines as the sections. ,, ?#ff [''"'l Vrce-presrdents: Giacomo REGALDO | @hhGl\ | / | 5. Plenary session (ltaly - Employers) +/ \t t**i l f k* I t&dm;-l..ti @M;l As a rule, the full Committee meets in plenary ses- Johannes JASCHICK ................*1 .* l*..,*.n Mamh. coud I sron ten times a year. At the plenary sessions, opin- (Germany - Various Interests) "-*, Md + drd6 I ions are adopted on the basis of section opinions by a 1\ /z 34 Secretary-general: AdTianoGRAZIOSI \ fc bm l / simple majority. They are forwarded to the institu- \ co.rn* / trons and published in the Official Journal of the Eu- L Origins "9,f"' ] 'o*"' ropean Communities. The ESC was set up by the 1957 Rome Treaties rn order to involve economic and social interest groups 6. Relations with economic and social councils in the establishment of the common market and to The ESC maintains regular links with regional and The president is responsrble for the orderly conduct provide institutional machinery for briefing the Eu- national economrc and social councils throughout the ropean Commission and the Council of Mimsters on of the Committee's business.
    [Show full text]
  • European Union and Population and Housing Census Around the Year 2001
    European Union and Population and Housing Censuses around the year 20011 Aarno Laihonen Eurostat/E4 Jean Monnet Building L-2920 Luxembourg [email protected] Countries around the world have started preparations for the 2000 census round. Population and housing censuses are still a major source of demographic and socio-economic statistics in most countries. They are also a unique source of geographically detailed data. The demand for these has increased rapidly in recent years – led, for example, by development of powerful geographic information systems applications in spatial analysis, and by logistics, physical planning and managing transportation networks. This is why censuses are still conducted in most countries, even if the relative cost of a traditional census has risen to a level more and more difficult to justify in an age of government budget cuts. Content of censuses has been coordinated internationally under United Nations recommendations. The UN regional commission for Europe (ECE) prepared recommendations for Europe for census rounds 1960, 1970, 1980 and 1990. The EU prepared its own programmes to satisfy Community data needs for census rounds 1980 and 1990. These relied on UN/ECE recommendations and were based on Council Directives 73/403 and 87/287. The final workshop of the series on the theme Censuses beyond 2000 will be held in France in the second half of 1999. The workshop proceedings have been published jointly by the organising national statistical institutes and Eurostat and are available from either. Changing census methodology Increasing cost pressures and pressures to reduce respondent burden have created a strong intensive for the countries in Europe to seek new solutions in census data collection and more effective methods of data processing.
    [Show full text]
  • Statement by the Turkish Government on 14
    PERCEPTIONS JOURNAL OF INTERNATIONAL AFFAIRS December 1997-February 1998 Volume II - Number 4 STATEMENT BY THE TURKISH MINISTRY OF FOREIGN AFFAIRS ON 14 DECEMBER 1997, CONCERNING THE PRESIDENCY CONCLUSIONS OF THE EUROPEAN COUNCIL HELD ON 12-13 DECEMBER 1997 IN LUXEMBOURG At the Luxembourg meeting of the Heads of State and Government of the member states of the European Union, held on 12-13 December 1997, a decision was taken to commence accession negotiations with “Cyprus” on the basis of the unilateral application of the Greek Cypriot Administration of Southern Cyprus. Turkey deems it useful to bring the following to the attention of EU members and the international community regarding the aforesaid decision and the repercussions that will ensue: 1. The 1959-60 Agreements regarding Cyprus were concluded among five parties, namely, Turkey, Greece, the United Kingdom and the Turkish Cypriot and Greek Cypriot communities. These agreements have established a balance not only between the two national communities in the island, but also between Turkey and Greece, with a view to preserving peace and stability in the region. The aforementioned agreements have stipulated the political and legal equality of the two sides in Cyprus, and designated the Turkish Cypriot and Greek Cypriot communities as the co-founders of the 1960 Republic. In this context, in addition to the United Kingdom which has maintained bases on the island, Turkey and Greece, as Guarantor Powers and motherlands, were given equal rights and obligations for the maintenance of the internal and external balance established over Cyprus. Ever since 1963 when the partnership state established in 1960 was destroyed by force of arms by the Greek Cypriots, there has not been a single state, government or parliament competent to represent the whole island.
    [Show full text]
  • How Taxation Can Increase Inequality
    11. FRANCE: HOW TAXATION CAN INCREASE INEQUALITY Nicolas Frémeaux and Thomas Piketty Abstract The evolution of inequality in France is specific compared with most OECD countries. Inequality only started to rise at the end of the 1990s after a period of decline during the 1970s and the 1980. This late increase partly explains the limited effects of inequality on social, political and cultural outcomes. However, social gradients like income or education play a considerable role for fields such as health, housing, political participation or trust in institutions. France is also particular with regard to the role of taxation. This chapter provides evidence about the absence of progressivity in the tax system. We conclude that the reforms implemented during the past decade have contributed to the increase in income inequality. 1 Introduction In this chapter, we describe the evolution of inequality in France and its impact on social, political and cultural outcomes. Three points make France distinctive with respect to other rich countries. First, the increase in inequalities in France occurred later than in many countries. More specifically, income inequality declined during the 1980s. Then, inequality started to rise at the end of the 1990s and this offset the decrease observed at the beginning of the period. Second, this difference in terms of timing also influences the study of its effects since it may take time for changing inequalities to lead to social, political or cultural impacts. Third, the role of taxation is rather specific in France. The absence of progressivity in the tax system has contributed to the recent increase in income inequality.
    [Show full text]
  • Corporate Reputation and Optimal Tax Planning
    What Stakeholders Expect from Corporations When It Comes to Paying Tax: Corporate Reputation and Optimal Tax Planning March 2015 Chris Brooks Professor in Finance, Director of Research and Deputy Head of School, ICMA Centre, Henley Business School Carola Hillenbrand Professor in Organisational Psychology, John Madejski Centre for Reputation, Henley Business School Kevin Money Professor of Reputation and Responsible Leadership, Director of the John Madejski Centre for Reputation, Henley Business School Acknowledgements The authors would like to thank Deloitte for their financial contribution towards the cost incurred in conducting this study. We are grateful to Chris Godfrey, Lisa Schopohl and Nicole Tovstiga for excellent research assistance. We also appreciate the comments of Mark Kennedy and Alexandra Warren of Deloitte on a previous version of this document. The authors alone are responsible for any errors. Henley Business School Founded in 1945, Henley was the first business school to be established in the UK and is one of the oldest and most respected schools in Europe. It is consistently ranked among the world’s top 50 business schools by the Financial Times and The Economist. It is among an elite group of business schools – the top 1% in the world – to be triple accredited for the quality and capability of its faculty and output. As part of the University of Reading, Henley operates within an academic institution that is placed within the top 1% of all universities globally. ii © Brooks, Hillenbrand and Money, March 2015 Contents
    [Show full text]
  • NEWSLETTER June 2008 N°1 Summary
    NEWSLETTER June 2008 N°1 Summary REAL ESTATE TRANSACTIONS-TAX PLANNING REAL ESTATE TRANSACTIONS Individual income tax- Purchase of the principal residence TAX PLANNING Purchase of a secondary home in France by foreign citizens settled in Monaco Individual income tax - Purchase of the principal residence Sale of a French real estate property indirectly held through a foreign vehicle Loan interest paid by a taxpayer to finance the purchase of his French 3% tax reform and its impact on offshore trust principal residence will have the benefit of a tax credit, whether French trust (Fiducie) and real estate transactions the purchase is direct or indirect through an SCI, subject to the following conditions: FAMILIES New French inheritance and gift tax provisions - the provision only applies to contracts signed after May 6, 2007; - applicable to both direct and indirect (namely via an SCI) CITIZENS OF THE WORLD investment; Stock options or the best manner to compensate - the loan must be granted by a EU Bank subject to fixed or executives and employees variable rate interest ; French Wealth tax new incentives - an indefinite loan, a “ prêt in fine”, is also allowed ; French tax cap amended - the loan must follow the special French legal provisions relating to loans under the French Consumer Code. «The purchase of the MONEGASQUE CORPORATE ISSUES principal residence now Disadvantages of branches against subsidiaries : garnishee The benefits of this provi- gives rise to a tax credit...» proceedings out in France on assets held in a foreign country sion will also apply if the Contract of employment in Monaco at a glance loan is to refinance an existing loan.
    [Show full text]
  • 33967075.Pdf
    25*$1,6$7,21Ã)25Ã(&2120,&Ã&223(5$7,21Ã$1'Ã'(9(/230(17Ã Ã - Ã &(175(Ã)25Ã7$;Ã32/,&<Ã$1'Ã$'0,1,675$7,21Ã ABATEMENT ABUSE OF LAW ACCELERATED DEPRECIATION ACCOUNTING BASIS , ACCOUNTING PERIOD ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE ACCOUNTING RECORDS - , ACCRUAL BASIS (ACCRUAL METHOD) , , AD VALOREM TAX ADMINISTRATIVE COMPANY - ADMINISTRATIVE EXPENSES . ADMINISTRATIVE OFFICE ADVANCE PRICING ARRANGEMENT (APA) ADVANCE RULING AFFILIATED COMPANIES - AFFILIATION PRIVILEGE , ( ). AGENCY AGGREGATION ALIEN, TAX TREATMENT OF - ALIENATION OF INCOME ALLOCATION ALLOWANCE AMORTIZATION AMORTIZATION METHOD APPORTIONMENT METHOD ARBITRAGE ARBITRAGE, TAX ARBITRATION « » ARM’S LENGTH PRINCIPLE © ª © ª ARM’S LENGTH RANGE © ª ARM’S LENGTH TRANSACTION ASSESSMENT
    [Show full text]