3.4 Conclusion of Chapter 3

In this chapter, I examined the essential problems of cross-border inheritances and donations: double or multiple taxation, double or multiple non-taxation, discrimination and administrative difficulties. These problems are confirmed, in my view, by the OECD IHTMTC and the 2015 inheritance tax report both of which serve as the two points of reference of this study. Furthermore, as previously noted, there could also be other problems of cross-border inheritances and donations. However, those problems fall outside the scope of this study as they do not seem to have been confirmed by the two points of reference of this study.

I further noted that the problems could not be effectively solved at the national level although unilateral measures should be welcomed in that regard. In my opinion, a more coordinated approach is required for addressing the problems. Such an approach can only be safeguarded at the OECD or the EU level because both levels provide for mechanisms to ensure a coordinated approach.

At the OECD level, the OECD IHTMTC is undoubtedly a valuable tool for addressing the problems. This is true regardless of the fact that the number of inheritance and gift tax treaties is not impressing. It could be argued, however, that certain provisions of the OECD IHTMTC and its Commentary can be improved, having regard to the objectives of the inheritance tax model and the principles reflected in its Commentary. In my view, a model that is in line with (some of) these principles seems to address 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 principles.

At the EU level, I observed that to date, no harmonisation measure had been proposed to address the problems of cross-border inheritances and donations. Only the EC’s recommendation has attempted to coordinate the EU Member States’ unilateral double tax relief provisions, but it seems to have failed to achieve this objective. Furthermore, the Court’s case law has contributed to the so-called “negative harmonisation” of death taxes and taxes on gifts. However, the Court’s case law has, in my view, two aspects that can be further discussed and explained, and the EU Directives 2011/16/EU and 2010/24/EU do not deal with administrative problems of cross-border inheritances and donations at the micro-level.

In conclusion, I would suggest that both the OECD and the EU levels are appropriate to address the problems of cross-border inheritances and donations because, as stated above, both levels provide for mechanisms to ensure a coordinated approach. First, at the EU level, the OECD IHTMTC and its Commentary serve as the basis for treaty negotiations. Second, at the EU level, the issuance of EU legislation is possible and can thus provide “separate” and “holistic” solutions to the problems of cross-border inheritance and gift taxation.