1.2.2 Suggestion of separate and holistic solutions

The second – and perhaps primary – purpose of this study is to suggest “separate” and “holistic” solutions to the selected problems of cross-border death and gift taxation under the available mechanisms at the OECD and EU levels. The term “separate solution” means a solution that deals with (aspects of) only one selected problem of cross-border death and gift taxation. It is distinguished from the term “holistic solution” that means a solution, which deals with all problems of cross-border death and gift taxation altogether. To achieve the objective mentioned above, I first describe the problems of cross-border death and gift taxation that, in my view, significantly increase the burden on parties involved. Then, I discuss the reaction of the OECD and the EU to these problems.

Regarding separate solutions at the OECD level, it can hardly be denied that an updated and watertight OECD IHTMTC would serve as a useful tool in dealing with some or most of the aspects of the selected problems of cross-border inheritances and donations. In that regard, I observe that the model can be improved in a manner that is more in line with its objectives and the principles reflected in its Commentary. In addition, given that the model has not been updated since 1982, the subsequent amendments to the OECD Model Convention on Income and Capital (referred hereinafter, the OECD ICTMTC or the income and capital tax model) cannot be neglected. It should, therefore, be assessed whether they fit the system introduced by the OECD IHTMTC. As a result, with regard to the OECD level, this study aims at improving the inheritance tax model. Regarding separate solutions at the EU level, I aim to explore how the EU primary and secondary law, as well as the Court’s case law, can be used or optimized in order to effectively address the selected problems of cross-border inheritances and donations within the EU.

Regarding holistic solutions, I aim to continue the work of the EC’s expert group (hereinafter: the “group”) which resulted in the production of the 2015 inheritance tax report. In this report, the group suggested a holistic solution to the cross-border tax obstacles posed to individuals within the EU. This solution is based on the innovative concept “one inheritance – one inheritance tax” (hereinafter: the “concept”) that arguably addresses the cross-border obstacles identified by the group, altogether. Nevertheless, several aspects of this concept need to be further explored. Finally, it should be assessed whether the concept can also provide a holistic solution to the selected problems of cross-border inheritances and donations that are discussed in this study.