Einde inhoudsopgave
Treaty Application for Companies in a Group (FM nr. 178) 2022/2.3.2.1
2.3.2.1 Introduction
L.C. van Hulten, datum 06-07-2022
- Datum
06-07-2022
- Auteur
L.C. van Hulten
- JCDI
JCDI:ADS657713:1
- Vakgebied(en)
Europees belastingrecht / Richtlijnen EU
Vennootschapsbelasting / Fiscale eenheid
Internationaal belastingrecht / Belastingverdragen
Vennootschapsbelasting / Belastingplichtige
Voetnoten
Voetnoten
This also requires the establishment of a suitable management control system. See in this regard, e.g., E.G.J. Vosselman & J. van der Meer-Kooistra, ‘Efficiency seeking behaviour in changing management control in interfirm transactional relationships’, Journal of Accounting & Organizational Change 2006, vol. 2, no. 2 and G.J. Vosselman & J. van der Meer-Kooistra, ‘Accounting for control and trust building in interfirm transactional relationships’, Accounting, Organizations and Society 2009, vol. 34, no. 2. The management control framework for internal transactions should support the decision-making of central management as well as the management of the transacting organizational units (I.J.J. Burgers & J. van der Meer-Kooistra, ‘Chapter 13: Control frameworks for cross-border internal transactions: the tax perspective versus the management control perspective’, in R. Russo (ed.), Tax assurance, Deventer: Wolters Kluwer 2015, par. 3.1). The tax perspective and business perspective do not necessarily match. The central management wants to make sure that the different parts of the group together achieve the goals of the group. The question is whether a transfer pricing system that aims to provide for an arm’s length remuneration also entails the right incentives to achieve these management goals (J.T. van Egdom, Verrekenprijzen; de verdeling van de winst van een multinational (Fiscale monografieën, nr. 115), Deventer: Wolters Kluwer 2020, par. 12.1).
This section is mainly based on the BEPS report on Action 3 which provides guidance for designing effective CFC legislation. The OECD report explains the type of control required to conclude that a CFC regime should apply. In this regard, the report contains a general explanation of the concept of control. It would seem that the BEPS report provides an adequate summary of the different ways of control that are possible for the interpretation of a group concept.
Control is a key element to determine whether a group of companies exists that constitutes a single entity from an economic perspective. Control should be actually exercised, i.e., there should be a central management.1 Such a central management can determine a common strategy which can be the basis for planning, coordinating and controlling the policy of the group companies. Such control can be exercised in various ways and both in a direct or indirect manner.2 First, the various forms of control are discussed and then the requirements to be set on the level of control. The last section includes a conclusion.