Abstract: South Korea introduced VAT in 1977 and the Sixth VAT Directive was enacted n the same year. In this article, the EU and Korean VAT systems are compared and analysed from a legal transplants perspective. The first research question pertains to whether there was any European influence on the Korean VAT Act at the time of its introduction, and, if so, how this influence was exerted. The second research question concerns the identification and explanation of similarities and differences between the two systems, both at the time of the introduction of Korean VAT and today. This leads to the third research question, whether the two VAT systems have moved towards or away from each other. The analysis has been carried out from a legal transplants’ perspective, which analyses whether, how and why such laws spread across the globe. The article ends with a final analysis and conclusions. Our conclusions are that there was a European influence on the Korean VAT Act by the time of its introduction, that many similarities are so close that they can hardly have occurred spontaneously, and that the two systems have drifted apart from each other. PubDate: Thu, 06 Jun 2024 00:00:00 GMT
Abstract: This contribution serves to provide a fully-fledged analysis of the compatibility of the Spanish windfall tax on credit institutions with EU law (EU monetary and banking policy, EU Fundamental Freedoms, and state aid) and international law (investment law and double tax treaties). Our analysis reveals that the design of the Spanish tax captures windfall profits that are large and easy to detect due to inflation and high interest rates. Although the tax is compatible with EU law, it compromises the area of bilateral investment treaties and bilateral tax treaties. PubDate: Mon, 22 Apr 2024 00:00:00 GMT
Abstract: The issue of how the Swedish welfare system should be organized in an increasingly market-driven economy has become an urgent one. The public sector’s retreat from its previous commitments through deregulation and new public management reforms, as well as the state’s ambition of highlighting non-profit actors as potential providers of welfare, can be understood as an illustration of two ongoing processes of transformation in Swedish society. The aim of this article is to place a legal doctrinal research methodology of the Swedish Income Tax Act´s incentive scheme for corporate and private donations to civil society at the intersection of these transformations (welfare and civil society). At the same time, it is in the understanding of the tax legislation and the advantages it can offer individuals, nonprofits or commercial actors, that changes can be brought about in both the patterns and our understanding of charity and giving. A question that arises in this context is whether it is meaningful to speak of a shift in the state’s control of the financing of civil society. The term nonprofit tax shift is introduced in the study to discuss this issue. The article also addresses how ideas, stances and policy initiatives are shaped and articulated in Swedish contemporary politics, including tax policy. The paper argues for the existence of a ressentiment driven discursive frontline, running parallel to the public dialogue on welfareand the role of nonprofits. Additionally, it examines whether these developments in tax policy have affected the notions of justice that were previously a significant consideration in designing the income tax system in Sweden. PubDate: Fri, 08 Mar 2024 00:00:00 GMT
Abstract: This paper examines the budgetary impact and dynamic effects of implementing a global minimum tax in Sweden. Using a new dataset of global activities of large Swedish companies, we estimate that Swedish tax revenue could increase by approximately SEK 500 million per year (around EUR 50 million). In addition, we estimate that administrative costs can be of the same order of magnitude and discuss the role of safe harbor rules to limit the administrative burden. PubDate: Fri, 15 Dec 2023 00:00:00 GMT
Abstract: Tax policy is one way to promote sustainability, and this paper focuses on the role of taxation for SDG 8 on economic growth and decent work. Three basic values for sustainability are identified—equity and equality, environmental protection, and coherence. All these values are important for SDG 8, but they are not easily or naturally combined as there are intermittent tensions among the various values. Equal treatment is important for both efficiency and legitimacy. However, globalization calling for equal treatment across borders may be hard to implement as it requires international agreements. This, in turn, may violate the required local coherence if taxes are more aligned with other countries than with the local context. Environmental taxation will likely play an increasing role in steering economies in a more sustainable way. A crucial issue and a possible challenge is to do that in a way that does not hamper growth. PubDate: Wed, 06 Dec 2023 00:00:00 GMT
Abstract: This study discusses the role and development of carbon pricing via taxation by using Finland as a case example of several issues with carbon taxation. Carbon taxation and carbon pricing face some major problems, mainly competitiveness and social issues. Although Finland was one of the first countries to adopt carbon-based energy taxation, these problems shaped the tax system in a way that could even be described as “avoiding carbon pricing”. This study provides new insights on how to develop carbon taxation and how to overcome major problems related to commonly known problems with carbon pricing. PubDate: Wed, 29 Nov 2023 00:00:00 GMT
Abstract: In Denmark, the rules on the reimbursement of electricity charges for charging electric cars have been introduced under the provisions of Act No. 1353 of December 21, 2012. Contrary to custom, the rules have not been introduced into the Electricity Tax Act itself, but are only laid down in the Special Act. However, the fact that the rules have given rise to problems of interpretation is due not only to the unusual way in which they were introduced, but also to the ambiguities caused by the legal text itself, and to the way in which the Danish tax authorities administer the rules.In this article I will highlight some of the areas where the rules have caused—and continue to cause—problems of interpretation. I will therefore highlight requirements for changing stations; interpretation of the company’s bill and risk; the supply of electricity to the charging point; and the correlation between the reimbursement rule and the electric heating rules, the renewable energy rules, the Danish Value Added Tax Act, and the European internal market rules.In addition, I will explain the rules for the reimbursement of electricity tax for charging electric cars in Sweden and Germany.Finally, I shall examine the possibility of support for the installation of charging points in the three countries. PubDate: Thu, 08 Jun 2023 00:00:00 GMT
Abstract: According to the Swedish government, the Swedish general anti-avoidance rule that was already in place when the Anti-Tax Avoidance Directive was adopted sufficiently implements the general anti-avoidance rule of the Anti-Tax Avoidance Directive. The implementation strategy chosen raises questions of European Union (EU) law compatibility, as there are clearly differences between them. It also raises questions concerning the extent to which EU law will affect the interpretation of the Swedish general anti-avoidance rule in the future. The purpose of this article is to discuss these questions. PubDate: Wed, 03 May 2023 00:00:00 GMT
Abstract: The paper examines what happened to the profitability of foreign-acquired firms following acquisition in Norway in the period 1994–2005. Propensity score matching combined with a difference-in-difference estimator is used to show that the profitability of the firms acquired goes down significantly following the acquisition. Cost elements, driving the lower profitability of the foreign-acquired firms, are the elements that could reflect transfer price manipulations. Furthermore, the results indicate that despite deteriorating financial performance, there is no significant change in the operating efficiency, liquidity, or solvency of the acquired firms. This may indicate that the observed changes in profitability can be explained by profit shifting activities of the acquired firms. PubDate: Wed, 29 Mar 2023 00:00:00 GMT
Abstract: This article examines whether the Finnish controlled foreign corporation (CFC) regime fulfills its aim to effectively prevent the shifting of profit to foreign low-tax entities and what the effects of the most recent legal amendment were. In addition, the article addresses whether the Finnish CFC regime actualizes the principles of a good tax system. PubDate: Sat, 04 Mar 2023 00:00:00 GMT
Abstract: Finnish limited liability housing companies (LLHCs) are increasing their debt ratios quickly. In this paper, I argue that current tax rules encourage this behaviour owing to strong shareholder tax incentives for a higher debt ratio. Although tax rules are designed to be neutral, Finnish tax rules related to selling assets are profitable for LLHC shareowners in cases where debt rates are high owing to taxable profits being based not on actual acquisition costs but on presumed acquisition costs derived from the selling price. Both tax deductibility of LLHC financial charges and the presumed acquisition cost rule are from a time when interests and inflation were higher than they currently are. Both of these were used to counter the adverse effects of inflation and interest for asset owners and LLHC shareholders. Currently, when inflation and interest rates are close to zero, these rules have created an incentive for a behaviour that increases risks for the whole economy and reduces tax income. PubDate: Sat, 09 Jul 2022 00:00:00 GMT
Abstract: This is an introduction to the research papers that make out this Nordic Tax Journal special issue on inequality within the international tax regime. The special issue is an outcome of the discussions that took place at the (online) conference hosted by Copenhagen Business School in September 2020. In addition to introducing the papers of this special issue, this introduction also provides a contemporary guide to tax justice and tax fairness with an emphasis on theories and principles applicable to the international tax context as this was the overall theme of the conference. PubDate: Thu, 14 Oct 2021 00:00:00 GMT
Abstract: The OECD Programme of Work on the tax challenges arising from the digitalization of the economy comprises a so-called GloBE (Global Base Erosion) or Pillar Two proposal, consisting of a series of measures aimed at establishing a floor to tax competition by achieving minimum taxation of the income obtained by in-scope multinational enterprises. If such a measure is implemented, developing countries would be severely deprived of the possibility to grant tax incentives to attract FDI and potentially foster economic growth. This contribution emphasizes the importance of the thorough review of their tax policy preferences that developing countries should undertake amidst the rapid adoption of GloBE, which the OECD is pushing to achieve. To illustrate this concern, an examination of implementation issues shows that a deficient enactment of the income inclusion rule proposed in GloBE could paradoxically trigger the applicability of tax sparing clauses aimed at protecting the effectiveness of tax incentives, even when both sets of rules pursue opposing goals. PubDate: Thu, 14 Oct 2021 00:00:00 GMT
Abstract: Recently welfare economists and international political economy scholars have increasingly discussed how the corporations seek profits by corroding policies that tackle tax avoidance and undermine public interest. This article contributes to these discussions on so-called regulatory captures in the global wealth chains by providing a comprehensive case study on anti-tax avoidance legislative processes in Finland. The author analyzes the statements that various stakeholders provided during several phases of enacting the interest deduction limitation rule that targets so-called thin capitalization arrangements. Because of this specific research material, the author is able to undertake a nuanced analysis in describing how and whose statements made the difference from the draft version of legislation to the final wording of the law. The evidence suggests corporate interest groups and tax advisory firms influenced the content of the rule as notable tax base eroding loopholes have been included in the Finnish anti-tax avoidance rule. The author also assesses remedies of regulatory captures. PubDate: Tue, 05 Oct 2021 00:00:00 GMT
Abstract: A tax litigation concerning the value of non-traded financial instruments is impregnated by uncertainty. The aim of this paper is to study how uncertainty inherent in financial valuation models is discursively and rhetorically handled and constructed by the litigating parties as well as the court. A discourse analysis guided by the notion of hedging is conducted on The Swedish Tax Agency v. PwC (2013, 2014). The analysis demonstrates a sparse use of hedging. Rather, certainty characterizes tax litigation. However, the analysis shows that the litigating parties as well as the court participates in the construction of claims as facts, distancing themselves from their own claims and decisions. PubDate: Sat, 18 Sep 2021 00:00:00 GMT
Abstract: This paper deals with the question whether there are reasons to deem multinational corporate groups ethically or legally responsible for paying their fair share of taxes. Ethical concepts argue that companies should generally be held responsible, but these findings contradict the mainstream market theory that understands companies as legal fictions and therefore not ethically but merely legally responsible. In contrast, we base our argumentation on the political-cultural market theory. We find that this theory provides reasons to ascribe an ethical responsibility for paying their fair share of taxes to multinational corporate groups. We argue, moreover, that this ethical responsibility also speaks for a legal responsibility. The prevailing tax law, particularly the arm's length principle, does generally not see groups as tax subjects. This currently missing legal responsibility gives reasons to rethink tax law. Therefore, we analyze whether the OECD Pillar One proposal may be an alternative to existing law. PubDate: Sat, 18 Sep 2021 00:00:00 GMT
Abstract: Member states often try to restrict cross-border debt financing in multinational groups. The pending Swedish case, Lexel AB, C-484/19, is a prime example. The Swedish tax law operates with a vague legal concept of tax abuse that is completely inappropriate to identify tax-abusive financing and disadvantages only foreign groups. This paper analyzes the Swedish rules on interest limitation in affiliated groups (C-484/19), which refers to substantial tax benefits, against the background of the European Union law and the finance theory. In this regard, a breach of European Union law can be found. This also applies to the current Swedish tax law. Moreover, the interest limitation rules are analyzed from the background of the principles of finance theory, particularly the interest coverage ratio (ICR). In this context, a comparative analysis is carried out between the Swedish rules and the Anti-Tax Avoidance Directive (ATAD) provision (Art. 4). Adequate regulations on the limitation of interest should cope with the problem of profit shifting, also preserve the freedom of financing, particularly in multinational groups, and should not contain any difference in treatment between domestic and foreign groups. PubDate: Tue, 18 May 2021 00:00:00 GMT
Abstract: The author explores whether legal pragmatism may function as a useful and adequate explanatory model for the case law on tax avoidance unfolding in the Danish Supreme Court. In doing so, the underlying ideas of philosophical and legal pragmatism are initially re-visited while the general interpretational approach of the Danish judiciary is briefly outlined. Subsequently, the general approach to interpretation of Danish tax law is presented and the prevailing opinions on tax avoidance in the Danish doctrine are touched upon. This provide the necessary foundation for the following legal analysis of the Danish Supreme Courts’ case law on tax avoidance. Based on this analysis, it is concluded that legal pragmatism may actually function as a useful and adequate explanatory model for the Danish Supreme Court's case law on tax avoidance. Awareness of this pragmatic inclination may facilitate a better understanding of the Danish Supreme Court's approach in difficult cases on tax avoidance and enhance the possibilities of predicting the outcome of such cases. PubDate: Thu, 11 Mar 2021 00:00:00 GMT
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