CFC legislation, tax treaties and EC law


Type Research Project

Funding Bodies
  • Commission of the European Communities
  • Federal Ministry of Education, Science and Culture
  • City of Vienna, Municipal Department 7

Duration Sept. 1, 2002 - Sept. 1, 2006

http://fgr.wu-wien.ac.at/INSTITUT/FR/hlcfc.html
  • Tax Law AE (Former organization)
  • Financial Law AE (Former organization)

Tags

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  • Aigner, Hans-Jörgen (Former researcher)
  • Fürnsinn, Katharina (Former researcher)
  • Herdin-Winter, Judith (Former researcher)
  • Lang, Michael (Details) Project Head
  • Stefaner, Markus (Former researcher)
 

Abstract (German)

Most developed countries tax residents on their world-wide income and, to obviate double taxation, grant a credit for taxes paid on foreign source income. A major exception to such treatment arises when a resident taxpayer earns income indirectly through a controlled foreign corporation. The resident taxpayer and the foreign corporation may constitute a single economic unit but for tax law purposes they are treated as separate taxable entities. The result is that domestic tax on foreign income of the corporation is postponed to the time the income is distributed. If foreign tax rates are lower than domestic rates, as in the case of a tax haven, the deferral of domestic tax can be very beneficial.<P>
In order to protect the domestic tax base, a variety of measures has been invoked, to avoid the effectiveness of those tax havens. Well known is the so called CFC-legislation (Controlled Foreign Company), which differ widely. Common goal of all CFC-legislations is nevertheless the implementation of measures to tax shareholders of CFCs pro rata share on the undistributed income of those corporations. Problems within this context not only arise from the issue of double tax treaties to assign the right to tax, but also from constitutional and EC law.


Abstract (English)

Most developed countries tax residents on their world-wide income and, to obviate double taxation, grant a credit for taxes paid on foreign source income. A major exception to such treatment arises when a resident taxpayer earns income indirectly through a controlled foreign corporation. The resident taxpayer and the foreign corporation may constitute a single economic unit but for tax law purposes they are treated as separate taxable entities. The result is that domestic tax on foreign income of the corporation is postponed to the time the income is distributed. If foreign tax rates are lower than domestic rates, as in the case of a tax haven, the deferral of domestic tax can be very beneficial.<P>
In order to protect the domestic tax base, a variety of measures has been invoked, to avoid the effectiveness of those tax havens. Well known is the so called CFC-legislation (Controlled Foreign Company), which differ widely. Common goal of all CFC-legislations is nevertheless the implementation of measures to tax shareholders of CFCs pro rata share on the undistributed income of those corporations. Problems within this context not only arise from the issue of double tax treaties to assign the right to tax, but also from constitutional and EC law.

Partners

  • Commission of the European Communities - European Union

Publications

Book (monograph)

2004 Aigner, Hans-Jörgen. 2004. Hinzurechnungsbesteuerung und DBA-Recht, Schriftenreihe zum Internationalen Steuerrecht, Band 32. Wien: Linde Verlag. (Details)

Journal article

2004 Aigner, Hans-Jörgen. 2004. Die abkommensrechtlichen Rahmenbedingungen für eine internationale Konzernbesteuerung. SWI 2004, 187-199 (Details)
  Stefaner, M. C.. 2004. EuGH-Verfahren zur Vereinbarkeit von CFC-Gesetzgebung mit Gemeinschaftsrecht. SWI 2004, 339 ff (Details)
2003 Lang, Michael. 2003. CFC Regulations and Double Taxation Treaties. Bulletin for International Fiscal Documentation 2003, 51 ff (Details)
  Lang, Michael. 2003. Législation sur les sociétés étrangères contrôlées et droit communautaire. Revue Générale du Contentieux Fiscal 2003, 9 ff (Details)

Chapter in edited volume

2004 Aigner, H.-J., Scheuerle, U., Stefaner, M. C.. 2004. General Report. In: Lang, M./Aigner, H.-J./Scheuerle, U./Stefaner, M. C. (eds.): CFC Legislation - Domestic Provisions, Tax Treaties and EC Law. 13 ff (Details)
  Haslinger. 2004. National Report Austria. In: Lang/Aigner/Scheuerle/Stefaner (Hrsg.): CFC Legislation - Domestic Provisions, Tax Treaties and EC Law. 73 ff (Details)

Edited book (editorship)

2004 Lang, M., Aigner, H.-J., Scheuerle, U., Stefaner, M. C. (eds.). 2004. CFC Legislation - Domestic Provisions, Tax Treaties and EC Law. Linde, Wien (Details)

Paper presented at an academic conference or symposium

2004 Metzler, Vanessa E.. 2004. Country Surveys of Multilingual Issues in Tax Treaty Law - Austria. Seminar: Multilingual Texts and Interpretation of Tax Treaties and EC Tax Law, Milan, 22 November 2004 (Details)
  Lang, Michael. 2004. Gemeinschaftsrechtliche Anforderungen an die Doppelbesteuerungsabkommen. Vortrag anläßlich der Konferenz des Zürcher Instituts für Europarecht, Universität Zürich, 1.7.2004 (Details)
  Schuch, Josef. 2004. Internationales Steuerrecht und EU-Recht im Lichte der EU-Erweiterung. VWT Fachtagung 2004, Bad Tatzmannsdorf, 17.6.2004 (Details)
2003 Haslinger, Katharina. 2003. Can Art. 10 OECD-MA be applicable to CFC-income? und 'Abuse of a Tax Treaty by a Contracting State?'. High Level Scientific Conference 'CFC-Legislation, Tax Treaties and EC-Law', Rust, 3.-5. Juli 2003 (Details)

Unpublished lecture

2007 Lang, Michael. 2007. CFC Legislation in the Light of ECJ Case Law. Georgetown University (Law Center), Washington D.C., USA, 16.04. (Details)
  Lang, Michael. 2007. CFC Legislation - Recent European Developments. New York University (NYU) Law School, New York, USA, 13.04. (Details)
2004 Stefaner, M C. 2004. CFC Legislation. Does it Contradict EU Legislation?. im Rahmen des Tax Seminars 'European and Cyprus Tax Law', Limassol 4.10.2004 (Details)

Classification

Expertise

  • International Tax Law
  • CFC