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Leonova O.A. Some Aspects of Direct Taxation in the EU: Legal Regulation of Taxation During Withdrawal of Parties

Published in journal "Taxes and Taxation", 2015-6 in rubric "International Tax Law", pages 404-415.

Resume: The object under research of this article is the public relations developing when the companies from particular member states change their residence and transfer assets from the head company to their economically independent subdivision in other member states. The subject under research of the present article is the legal regulation of taxation in the process of withdrawal of parties as a resulf of the transfer of assets from the head company to subdivisions located in other member states of the EU. The author examines such aspects of the topic as granting tax deferment, the term of tax deferment, specifying requirements of the government on provision of the bank guarantee and interest payment. Special attention is paid to the practice of the European Court of Justice that prejudicially viewed the issues of compatibility of the provisions of domestic tax legislation on taxation during withdrawal of parties in different member states. The methodological basis of the article involves general and special methods of scientific cognition. The researcher has also used the methods of legal, system, comparative law and linguistic analysis. Based on the results of the research, the author concludes that, firstly, immediate taxation of unrealized capital gain when transfering assets from the head company to a subdivision in another member state violates the EU rights. Secondly, the requirement to provide the bank guarantee does not automatically violate the EU rights; any condition introduced by the goverment must be proportional to achieving balanced distribution of authorities to collect taxes between states. Thirdly, when developing their own domestic legislation on taxation during withdrawal of parties the governments must find the balance between retaining their rights to perform their tax authorities and eliminating obstacles for efficient functioning of the domestic market and exercising the four economic freedoms guaranteed by the founding treaties of the EU.

Keywords: resident, transfer of assets, permanent establishment, economically autonomous subdivision, European Court of Justice, taxation during withdrawal of parties, European Union, redomiciliation, directive on cross-border merger, domestic market

DOI: 10.7256/1812-8688.2015.6.14088

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Bibliography:
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