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Abstract:
This paper is intended to give an overview over Austrian advance rulings in an international context. In order to be able to outline the Austrian rulings practice and provisions that constitute a legal basis for advance rulings -- since in Austria rulings are not based upon one single law or provision but on many -- the term "advance ruling" will be defined as well and its meaning in international tax practice will be described.
Moreover, this paper is intended to examine Austrian rulings measures in the light of the EU and OECD provisions against harmful tax competition, as well as under the state aid provisions of the EC Treaty.
It is structured as follows:
In the first part, the provisions of the EU (Code of Conduct of Business Taxation) and OECD (report on harmful tax competition) against harmful tax competition as well as the state aid provisions are described and the discussion, as to whether provisions against harmful tax competition are necessary at all, is outlined briefly. Then, international rulings practice is explained. Finally and essentially, Austrian rulings provisions are described in detail and assessed according to the criteria to identify harmful tax practices described in the provisions against harmful tax competition.
This diploma thesis was written in the course of the EUCOTAX-program 2001/2002. EUCOTAX is a scientific cooperation between several European universities (i.e. European Universities Cooperating on Taxes). The intention of this program is to provide students and young academics with the experience of participating in an international tax conference. During their time of preparation, they are supported by senior experts. In the year 2002, the general topic was "Tax Competition". This topic was split up into six sub-topics which were to be discussed in groups during this year's conference. These sub-topics were "State aid", "OECD report on harmful tax competition", "Code of conduct of business taxation", "Holding companies/exempt entities", "CFC legislation", and "Advance rulings". The conference was held from 4 April to 12 April 2002 in Tilburg, Netherlands.
Table of Contents:
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|
Table of contents |
2
|
|
Dedication |
5
|
| 1. |
Preface |
6
|
| 2. |
Eu and OECD PRovisions against harmful tax competition |
8
|
| 2.1 |
Are measures to curb harmful tax competition necessary? |
8
|
| 2.1.1 |
Definition of harmful tax competition |
8
|
| 2.1.2 |
Arguments in favor of the adoption of measures against harmful tax competition |
9
|
| 2.1.3 |
Arguments against the adoption of measures against (harmful) tax competition |
11
|
| 2.1.4 |
Conclusion |
13
|
| 2.2 |
EC State Aid Provisions (Arts 87 to 89 of the EC Treaty) |
14
|
| 2.2.1. |
General concept of state aid within the EU |
14
|
| 2.2.2. |
EC legal rules on state aid |
15
|
| 2.2.3. |
Categorization of state aid by objective |
16
|
| 2.2.4 |
Fiscal state aid |
17
|
| 2.3 |
Code of Conduct of business taxation |
19
|
| 2.3.1 |
Background and Legal nature |
19
|
| 2.3.2 |
Scope |
21
|
| 2.3.3 |
Criteria to identify harmful tax practices |
22
|
| 2.4 |
OECD Report on Harmful Tax Competition |
24
|
| 2.4.1 |
Background and Legal nature |
24
|
| 2.4.2 |
Scope |
25
|
| 2.4.3 |
Criteria to identify harmful tax practices |
26
|
| 3. |
International rulings practice |
30
|
| 3.1 |
Introduction |
30
|
| 3.1.1 |
Definition of aDvance ruling |
30
|
| 3.1.2 |
Why rulings are important but still controversial |
32
|
| 3.2 |
Classifications |
36
|
| 3.2.1 |
Legal basis |
36
|
| 3.2.2 |
Right to obtain a ruling and time limits for the issue of a ruling |
38
|
| 3.2.3 |
Binding force and term of validity |
41
|
| 3.2.4 |
Possibility of appeal |
44
|
| 3.2.5 |
The applicant |
46
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| 3.2.6 |
The ruling authority |
48
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| 3.2.7 |
Publication |
49
|
| 3.3 |
National and international topics |
50
|
| 4. |
Austrian rulings practice and its compatibility with provisions against harmful tax competition |
52
|
| 4.1 |
Introduction |
52
|
| 4.1.1 |
Definitions |
52
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| 4.1.2 |
Good faith ("Treu und Glauben") |
55
|
| 4.2 |
Administrative decisions ("Bescheide") |
56
|
| 4.2.1 |
General aspects |
56
|
| 4.2.2 |
Declaratory decisions legally not expressly provided for |
59
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| 4.2.3 |
Special provisions in austrian tax law providing for the issue of administrative decisions -- national topics |
60
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| 4.2.4 |
Special provisions in austrian tax law providing for the issue of administrative decisions -- International topics |
62
|
| 4.2.4.1 |
Section 48 Federal Fiscal Code |
62
|
| 4.2.4.2 |
Section 103 income tax code |
67
|
| 4.3 |
Agreements |
71
|
| 4.3.1 |
Agreements between a taxpayer and the tax authorities |
71
|
| 4.3.2 |
Agreements between countries |
72
|
| 4.4 |
Obligations to provide information and rulings ("Auskunftspflichten") |
73
|
| 4.4.1 |
General aspects |
73
|
| 4.4.2 |
National topics |
76
|
| 4.4.3 |
International topics |
77
|
| 4.4.3.1 |
Section 6 of regulation 1995/57 |
77
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| 4.4.3.2 |
Section 5 of regulation 1995/56 |
78
|
| 4.5 |
General rulings |
79
|
| 4.6 |
Express-answer-service of the ministry of finance |
81
|
| 4.7 |
Compatibility with provisions against harmful tax competition |
84
|
| 4.7.1 |
Sec 48 Federal Fiscal Code |
84
|
| 4.7.1.1 |
Forbidden state Aid |
84
|
| 4.7.1.2 |
Code of conduct |
85
|
| 4.7.1.3 |
OECD Report on harmful tax competition |
89
|
| 4.7.2 |
Sec 103 income tax code |
92
|
| 4.7.2.1 |
Forbidden state Aid |
92
|
| 4.7.2.2 |
Code of conduct |
94
|
| 4.7.2.3 |
OECD Report on harmful tax competition |
96
|
| 4.7.3 |
Declaratory decisions legally not expressly provided for |
99
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| 4.7.4 |
Advance Pricing Agreements |
99
|
| 4.7.5 |
Obligations to provide information and rulings ("Auskunftspflichten") |
99
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| 4.7.6 |
General rulings |
101
|
| 4.7.7 |
Express-answer-Service of the ministry of finance |
101
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| 5. |
Conclusion |
102
|
|
Bibliography |
104 |
