1.3 Structure of this study

The present study is structured in four parts. Part I serves as an introduction to the current situation and the problems of cross-border death and gift taxation. This part includes chapters 2 and 3 of this study. Chapter 2 provides an overview of death taxes and taxes on gifts. In this overview, I discuss the main elements of death taxes and taxes on gifts and the way that they are levied. The overview is not limited to inheritance and estate taxes, but it includes any tax levied in the event of death, i.e. any death tax (e.g. mortis causa income taxes, capital gains taxes, registration duties etc.). Finally, the overview includes the justifications based on which states may levy or maintain death taxes and taxes on gifts.

The problems of cross-border inheritances and donations are discussed in chapter 3 of this study and are as follows: i) double or multiple taxation, ii) double or multiple non-taxation, iii) discriminatory treatment of cross-border inheritances and donations, and iv) administrative difficulties. The selection of these problems is not random. They increase the burden of the parties involved in a cross-border inheritance and donation. Furthermore, they are confirmed by the two points of reference of this study: the 1982 OECD IHTMTC and the 2015 inheritance tax report.1 Both points of reference, therefore, are discussed. Finally, I discuss the level at which the problems can be more effectively addressed.

Part II of this study examines separate solutions to the problems under the current mechanisms at the OECD level (chapters 4 to 6) and the EU level (chapter 7).

Chapters 4 to 6 focus on the OECD level and the updates to the OECD IHTMTC for the effective addressing of the problems. In my view, an up-to-date model will significantly contribute to addressing the problems of cross-border inheritances and donations. As a result, updated language and interpretation of several Articles of the model is recommended. In that regard, I observe that the update work requires a benchmark. In my view, a model that is in line with the elements of this benchmark addresses the problems of cross-border inheritances and donations in a more comprehensible manner (considering the objectives of the OECD IHTMTC) than a model that is not in line with (some of) these elements. As a result, in chapter 4, I present the benchmark of the update work. I decided to call this benchmark “the proposed inheritance and gift tax”. The introduction of this benchmark allows me to suggest improvements to certain provisions of the OECD IHTMTC and its Commentary. In the course of my research, I discovered that the proposed inheritance and gift tax consists of four elements as distilled from the OECD IHTMTC and its Commentary. Subsequently, in chapter 5, I examine certain provisions of the OECD IHTMTC concerning each problem of cross-border death and gift taxation, which I am of the view can be improved, having regard to the elements of the proposed inheritance and gift tax and the objectives expressed in the inheritance tax model. In chapter 6, therefore, I suggest improvements to these provisions regarding each separate problem of cross-border death and gift taxation.

Chapter 7 focuses on the EU level. In this chapter, I examine the progress made at the EU level towards addressing the problems of cross-border death and gift taxation. Moreover, I discuss separate solutions for each problem within the EU and provide clarifications to the Court’s case law. Chapter 7 concludes the second part of this study on the separate solutions.

The third part of this study focuses on holistic solutions to the problems of cross-border death and gift taxation. Those types of solutions are, in my view, conceivable only at the EU level that provides for the necessary tools under the EU treaties. A holistic solution for dealing with cross-border inheritance tax obstacles is not, however, a novelty. In fact, in 2015, the EC’s expert group put together an inheritance tax archetype in the 2015 inheritance tax report. The report introduced the innovative concept of “one inheritance – one inheritance tax” under which only one inheritance tax shall be chargeable in the event of a cross-border inheritance. In this respect, the deceased’s habitual residence was suggested to serve as a connecting tax criterion indicating the EU Member State that is allowed to tax the cross-border inheritance as a whole. The report is not a legal document nor has the group developed and fine-tuned the concept since 2015. Consequently, I am of the view that more research is needed into the scope and the application of the concept in my endeavour to address the problems of cross-border inheritances and donations within the EU from a holistic point of view.

Part IV contains the summary and the conclusions of this study.