Einde inhoudsopgave
Treaty Application for Companies in a Group (FM nr. 178) 2022/5.2.4.1
5.2.4.1 Introduction
L.C. van Hulten, datum 06-07-2022
- Datum
06-07-2022
- Auteur
L.C. van Hulten
- JCDI
JCDI:ADS659336:1
- Vakgebied(en)
Omzetbelasting / Plaats van levering en dienst
Voetnoten
Voetnoten
E.g., rules that allow for consolidation, transfer of losses or tax-free property transfers between companies under common ownership.
Additionally, according to the OECD the equal treatment principle as included in art. 24 OECD MTC does not extend to group taxation regimes (Commentary on art. 24 OECD MTC, par. 41 and 77).
B.F.A. da Silva, The Impact of Tax Treaties and EU Law on Group Taxation Regimes, Alphen aan den Rijn: Kluwer Law International 2016, par. 7.1. The entity will still qualify as a body corporate and thus as a person for purposes of the application of the OECD MTC (S.P. Link, ‘Chapter 7: Application of tax treaties to companies subject to national group taxation regimes’, par. 7.4, in G. Maisto (ed.), International and EC Tax Aspects of Groups of Companies, Amsterdam: IBFD 2008). Under a full consolidation regime it has also been claimed that the unit as such constitutes the resident (E. Reimer et al., Klaus Vogel on Double Taxation Conventions, Alphen aan den Rijn: Kluwer Law International 2022, p. 466). If multiple entities are seen as one resident from a domestic tax perspective, the activities of these entities are consolidated to determine whether a permanent establishment exists (J. Gooijer, Tax Treaty Residence of Entities, Deventer: Wolters Kluwer 2019, par. 8.2.2.2). In that case, this one single enterprise might have permanent establishments in each state in which either the parent company or one of its subsidiaries conducts activities (E. Reimer, ‘Chapter 1: Permanent Establishment in the OECD Model Tax Convention’, par. 1.02E, in E. Reimer, S. Schmid & M. Orell (eds.), Permanent Establishments: A Domestic Taxation, Bilateral Tax Treaty and OECD Perspective, Alphen aan den Rijn: Kluwer Law International 2018).
Group taxation regimes1 as such are not dealt with under the OECD MTC.2 Therefore, each group member seems eligible for treaty entitlement if the entity is liable to tax (i.e., the tax group as a whole is not considered a person or a company for tax treaty purposes).3 In this section various elements of group taxation regimes and their concurrence with the OECD MTC are discussed. Subsequently, it is analysed whether relevant insights can be derived from domestic group taxation regimes for the application of tax treaties based on the OECD MTC.