Kommentatorer:
- Professor Arvid Aage Skaar, Wiersholm
Leder for evalueringen og veileder:
- Midtveisevalueringen ledes av professor Inger Johanne Sand.
- Kuźniackis veileder er professor Frederik Zimmer.
For disposisjon og tekstutkast, kontakt Błażej Kuźniacki.
Combating CFC Tax Avoidance Schemes: An Analysis of Polish Tax and Constitutional Law, Tax Treaties and the EU Law
The vague and overly stringent CFC rules can result in decreasing the number of cross border businesses operations. This may be explained by the fact that resident taxpayers controlling a CFC are taxed on an ongoing basis with respect to CFC’s income, while others taxpayers (foreign taxpayers investing in the CFC’ State and domestic ones investing in its resident State) must pay taxes at the time of a distribution of the company’s profits. Despite this, documentation requirements resulting from the CFC rules constitute a heavy burden on international business. Such situation may increase the risk of conflicting taxation claims. On the other hand, the lack of the CFC rules results in effective exploitation of blatant tax avoidance schemes that leads to erosion of tax base in the CFC shareholders’ State, increase a harmful tax competition, causes in inequality of taxation of all taxpayers in CFC shareholders’ States, and lower the prestige of the state and the law. As a consequence, it is a very difficult to draft a proper CFC rules, but this does not mean that drafting such rules is either not possible or unnecessary. Conversely, this indicates a need to understand this topic by a comprehensive and comparative study in that regard.
The main aim of the dissertation is to analyse the justifiability and potential outcomes of introducing the CFC rules into tax law system in Poland. In this context, a wide comparative approach of dissertation may constitute useful know how in the field of anti-tax avoidance measures not only for the Polish practice and theory of tax law but also for another countries. The importance of the topic is furthermore justified in the light of the current global initiative of the OECD regarding Base Erosion and Profit Shifting (BEPS). Pursuant to number 3 of the Action Plan on BEPS, CFC rules should be strengthened and for this purpose the OECD will develop recommendations regarding the design of CFC rules by September, 2015. In this context, the up dated analysis of the CFC rules is of high relevance, since it may show their weak and strong sides, also with regard to their effectiveness in combating international tax avoidance with the use of CFCs.
The problematic touched by the dissertation is divided into four parts.
The first, presents legal and economic factors conducive to the development of CFC tax avoidance schemes, general characteristic of the schemes, and worldwide recognized legal methods of preventing tax avoidance through the use of CFCs.
The second part includes the comparative analysis of the CFC rules as special tax law provisions combating CFC tax avoidance schemes on the examples of selected EU/EEA countries (the United Kingdom, Norway and prospectively in Poland). This part also presents alternatives to CFC rules, such as: GAARs, switch-over clauses, the concept of the place of effective management and domestic anti-avoidance provisions of (allegedly) the same effect as CFC rules, i.e. abuse of law theory (Luxembourg), see-through look approach (Belgium), fiscal investment companies regime (Netherlands), and international fiscal transparency rules (Argentina).
The third part regards the analysis of the justifiability and potential outcomes of introducing the CFC rules into tax law system in Poland.
The fourth part includes an analysis of the compatibility of CFC rules with Polish constitutional principles, the EU law and tax treaty provisions.
In the final conclusions of the dissertation is make an attempt to answer to the question, how the CFC rules may be introduced to the Polish tax law without infringement of the constitutional law, tax treaty imperatives and the EU law, and simultaneously be effective in combating CFC tax avoidance schemes and not hinder the cross-border investments?