european commission taxation and customs union brussels, 10 november 20091 taxation of international...

Brussels, 10 November 2009 1

European Commission

Taxation and Customs Union

Taxation of International Artistes and Community

LawEuropean Commission

[email protected]

”Seminar on social security and taxation in the context of mobility in the live performance sector”


European Commission /


Questions for the Panel on « International Artiste Taxation »

1) What is changing after the ECJ case rulings(Gerritse – 2003, Scorpio – 2006) for artist taxation?

2) What’s the situation across Europe?

3) What has improved for the live performance sector and which areas are still a problem?

4) How can Europe respond better to the principles of freedom of movement of persons and services?




What « Europe » can do (and/or is doing) to remove fiscal obstacles for artistes using the Internal Market’s freedoms? OUTLINE

1. EC Law and Taxation: General Remarks on the limits of the “positive integration”2. The EC Treaty Freedoms and the “negative integration”3. The EU Cross-border Citizens and Their Rights



Taxation and Customs Union1. EC Law and Taxation

General Remarks

The limits of the positive EC action/integration

A. Legal Constraints :

(1) Legal basis: Direct Taxation is only indirectly taken in account by the EC Treaty

• Art. 93 ECT «The Council shall … adopt provisions for the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation … »

• Art.94 ECT « The Council shall … issue directives for the approximation of such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the common market. »




General Remarks


A. Legal Constraints :

(2) Double Taxation: Article 293 ECT does not oblige Member States to eliminate double taxation

Art. 293 ECT « Member States shall, so far as is necessary, enter into negotiations with each other with a view to securing for the benefit of their nationals … the abolition of double taxation within the Community … »

“Article [293] is not intended to lay down a legal rule directly applicable as such, but merely defines a number of matters on which the Member States are to enter into negotiations with each other ’ far as is necessary’. … it is clear from the wording of that provision that it cannot itself confer on individuals any rights on which they might be able to rely before their national courts.” (ECJ, C-14/96, Gilly, para. 14-17)




General Remarks


B. Political/Legal Constraints :

(1) The need for unanimity among European Union members over tax matters.

Article 94 ECT « The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, issue directives for the approximation of laws … . »




General Remarks


B. Political/Legal Constraints :

(2) Fiscal sovereignty of MSs (subsidiarity).

Article 5 ECT « In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States … ».

•“ … as Community law stands at present, direct taxation does not as such fall within the purview of the Community …” ECJ, C-279/93, Schumacker, para.21; C-290/04, Scorpio, 30)

•“ … direct taxation falls within the competence of the Member States … “ (ECJ, C-345/04, Centro Equestre, para 19)



Taxation and Customs Union2.The EC Treaty

Freedoms

The negative integration

the role of the ECJ

Member States remain competent to determine the criteria for taxation, however their tax provisions must be compatible with EC Law.

“ … the powers retained by the Member States must nevertheless be exercised consistently with Community law” ( ECJ, C-279/93, Schumacker, para.21; C-290/04, Scorpio, 30 )




Freedoms

Tax Treaties are not an exception to the rule. Like other tax provisions, tax conventions must not contravene the requirements of EC law

“ Irrespective of its extent, the difference in tax treatment resulting from the application of that [tax] convention … constitutes discrimination … which is incompatible with the freedom of establishment guaranteed by the Treaty ”

( ECJ, C-170/05, Denkavit France, para.49 )




Freedoms

Member States may take their inspiration from OECD Model (e.g. Article 17 on taxation of artistes) but their provisions are not necessarily compatible with EC Law

“ …the fact that the rules are consistent with the provisions of the OECD model convention does not also mean that they comply with Article 43 EC. Neither the provisions nor the objectives of the OECD model convention, on the one hand, or of the EC Treaty, on the other, are in fact the same.”( A.G. Micho, C-324/00, Lankhorst-Hohorst, para.79 )




3. The EU Cross-border

Citizens and Their Rights The role of the European Commission

as policy maker: the “coordination” of national tax policies(to transform the “negative integration” into a positive,

constructive action) as “guardian of the Treaty” (Art. 211 ECT)

the infringement procedures(main aim of an infringement action is to remedy

breach of Community law)

No direct access for tax payer to the ECJ

• Art. 226 ECT: Infringement procedure (Commission)• Art. 234 ECT: Preliminary ruling (national courts)




Direct tax cases decided by/pending before the ECJ (by year of reference to the Court; 31/12/2008)

0

5

10

15

20

25

Decided Cases: Art. 226 ECT 1 0 0 0 0 0 0 1 0 0 0 1 0 0 1 0 0 0 1 2 2 3 3 1 0 0

Decided Cases: Art. 234 ECT 0 0 0 0 1 1 0 1 2 1 2 3 2 3 6 8 4 6 6 4 10 18 14 10 4 0

Pending Cases: Art. 226 ECT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 4

Pending Cases: Art. 234 ECT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 12 12

1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008




Direct taxation: new infringements per year (31/12/07)

Year Complaints Own initiative Total

2001 17 1 182002 34 5 392003 28 10 382004 (EU 25) 35 2 372005 47 23 702006 50 16 662007 (EU 27) 65 32 97


Citizens and Their Rights




Complaints about the taxation of non-resident

• 1) Different collection mechanism• 2) Different tax base (gross versus net)• 3) Different tax rates



For press releases in respect of infringement cases : http://ec.europa.eu/taxation_customs/common/infringements/infringement_cases/index_en.htm(See, e.g.: IP/09/292; IP/09/291; IP/08/1533; IP/08/144 …)




Complaints – Who and how?

• Anyone, free of charge • Against any measure or practice by a Member State

incompatible with EU law• Complainant does not have to:

– demonstrate a formal interest or– be directly concerned by the alleged infringement

• Complainants are not a party to the infringement proceedings; they must safeguard their rights at national level

• In writing, by letter, fax or e-mail (any EU language)



For more information: EC Infringement-Website: http://ec.europa.eu/community_law/infringements/infringements_en.htm




Thank You For Your

Attention !!

Arnoud Gerritse & the free movement of musical notes

(Source: http://eddywestveer.blogspot.com)

european commission taxation and customs union brussels, 10 november 20091 taxation of international...

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