Summary:
SUMMARY
The topic of the present paper is the tax treatment of capital companies in the framework of Double Taxation Conventions as well as the interaction of these Conventions with European legislation, both primary and secondary. Modern cross-border development of companies' activities means that they are subject to more than one national taxation system for all or part of their income. The issues of avoiding international double taxation of corporate income and the application of European law to the diptych of the freedom of establishment of companies and the free movement of capital enshrined in the Treaty of the European Union therefore arise.
In the first part of the paper, focus is made in the current OECD Contract Model in conjunction with the explanatory commentary, which formed the basis for concluding bilateral conventions. The central policy pursued by States through Double Taxation Conventions is the introduction of a more favorable tax regime for residents of Contracting States when doing business in the other State. This is because the Convention lays down maximum levels of taxation within which each Contracting State can exercise its fiscal power in accordance with its domestic law and is the largest possible burden for the residents of the Contracting States when they obtain income from the other state. In particular, the issues of international double taxation that arise in relation to income tax from the international activity of companies are examined in three respects : a. the taxation of income from the operation of an enterprise with a physical establishment or a dependent agent in another State (permanent establishment), b. the taxation of income from the participation in another enterprise established in another State (dividends) and c. the taxation on income earned by an enterprise in the form of interest and royalties from enterprises of another State, whether affiliated or not.
In the second part of the paper, the contribution of European law to the introduction of rules to combat international double taxation is analysed, but both the fight against international double taxation and direct taxation do not fall within the scope of EU's objectives and competences. In its case-law, the European Court of Justice created negative integration rules, which consist of the prohibition of tax discrimination in the intra-Community movement of legal persons. Whilst positive integration concerns the establishment of common positive rules for the functioning of the internal market, negative harmonization refers to the removal of barriers to the free movement of persons, capital and products. In the context of positive harmonization, the tax arrangements of three directives are examined: a) Directive 90/434 - as replaced by Directive 2009 / 133- on the common system of taxation applicable to mergers, divisions, partial divisions, transfers of assets and exchanges of shares concerning companies of different Member States and to the transfer of the registered office of an SE or SCE between Member States , b) Directive 90/435 - as replaced by Directive 2011/96 - on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States and c) Directive 2003/49 on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States.
Finally, the prospects in the development of international tax treatment of companies in the light of European law, as reflected in the Commission Communication "Tax policy in the EU-priorities for the coming years» (COM (2001) 0260) are examined. In the above mentioned Communication, it is stated that due to the difficulty of making unanimous decisions on legislative proposals in the field of taxation, the EU should consider the use of alternative tools such as Notices, Recommendations, Guidelines in order to eliminate taxation obstacles in the internal market.
Keywords:
Διεθνής φορολογική μεταχείριση κεφαλαιουχικών εταιρειών, Συμβάσεις Αποφυγής Διπλής Φορολογίας, Οδηγία 2009/133, Οδηγία 2011/96, Οδηγία 2003/49
