Por y para profesionales del Derecho

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03/10/2023. 07:11:01


Por y para profesionales del Derecho

Blog Fiscalidad Internacional

From beps to the basics: a rhapsody to the classics

Asesor fiscal internacional

My apologies to my usual readers (dad, mum, some friends and relatives who suffer from occasional insomnia…) but, for the first time since I joined this growing and beautiful bloggers family, back 3 years ago, I’m writing my post in English due to a simple reason: It’s contents was inspired by my most recent “international tax guru”, who does not speak the language of don Miguel de Cervantes, although his speech was so clear and inspiring that even don Miguel himself would have understood his arguments from his grave.


In early April I assisted to a conference where this person was granted some 20 or 30 minutes to share his view of the current "trending topics" in international taxation, and during his speech I experienced a strange sort of epiphany, because it felt as if someone else was speaking out loud my own thoughts about what should be the nowadays main goals of a regular in – house tax lawyer like me.

Obviously, during the conference the speakers talked about BEPS, value chain analysis, joint tax audits, DAC 6, Brexit, and so on and so forth just like the last 5 years. This is why, in the midst of "so much of the same", a different outlook of international tax, based on a return to the roots of our profession was so shocking. In broad terms, pursuant to this professional's understanding, the three non – negotiable items that any "tax planning scheme" must include are as follows:

    1) Ensuring that all costs and expenses are tax deductible, wherever they may accrue or arise, and anytime they may accrue or arise.

    2) Avoiding the payment of direct taxes on non – received revenues or income.

    3) Ensuring that no profit is taxed twice.

Most of the readers of this post who have the slightest tax knowledge surely take for granted that the aforementioned "principles" are always met, but it seems to me that multinational companies have greater concern on their P&L and their EBITDA than on the yearly costs they have to bear as a consequence of a lack of control on these principles. Actually, I think that a lot of CEO's would be astonished if they knew the part of the corporate income tax paid in the 4 former years that are directly related to "failure" in the control of these items.

From my point of view, achieving these goals is difficult, but it is doable, as long as multinational groups implement and procure the means to coordinate the role of tax controllers along with the role of in – house tax advisers. In like manner, MNE should seek to balance the measures implemented by the former with the measures proposed by the latter, as well as by the outsourced tax advisers (although each of these characters pursue their own interest).

Another (very big) hurdle that tax controllers along with tax advisors would have to deal in order to achieve these goals, especially the first one listed, arise directly from the unilateral interests of the tax administrations of different countries and from the absence of proper coordination in the implementation of cross border tax provisions whose origin is BEPS itself. Two examples may well serve to illustrate this point:

    1) As far as I know, some tax authorities consider a reasonable stance demanding parent companies to charge out management fees to their foreign subsidiaries, regardless of the MNE's circumstances.

    However, in the case of MNEs with a decentralized corporate structure (that is, those MNE whose subsidiaries have their own back office and their own management organization), management fees do not qualify as tax deductible for the subsidiaries' corporate income tax purposes because such costs do not comply with the benefit test provided for by the regulations of the country where the subsidiary is based.

    2) As all of you know for sure, the 2018 US tax reform implemented by the Tax cuts and jobs act created the "base erosion and anti – avoidance tax" (BEAT), aimed at protecting the taxable income of US based subsidiaries from being eroded by charges imposed by their foreign parent companies.

    In practice, most of multinational groups who fall into the scope of this provision will find that, usually, the tax credit provided for by the tax treaty or by the corporate income tax regulations of the country where the income receiving company is based does not provide full relief because BEAT will exceed the corporate tax payable at the parent company level.

    However, alike the situation referred to in point 1 above, tax authorities of the parent company country still want them to push down costs to their subsidiaries, even if they know that this potential double tax cost may arise.

Finally, I have to say that it is not the first time I listen this point of view. Last year I also assisted to a conference where the speaker "reminded" us all that international taxation, in principle, should not aim only at seeking tax savings, but also at balancing the tax burden that multinational groups have to bear on the worldwide business activities they run and in relation with their cross border transactions and charges, by way of ensuring that all those business activities transactions are taxed equally wherever they may be carried out, and avoiding double taxation that discourages international business activities. Perhaps, this is the moment to double check tax planning structures implemented under BEPS principles, and make them simpler by returning to the basics of international taxation.

The aforementioned opinion is exclusive of the author and cannot be attributed or related to any person of his personal or professional surroundings.

La opinión expresada en este post es exclusiva de su autor, y en modo alguno puede imputarse o atribuirse a ninguna persona o entidad de su entorno profesional.


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Blog Fiscalidad Internacional

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Actualmente, los estados son cada vez menos soberanos para implementar medidas fiscales de calado internacional. Los sistemas fiscales son muy similares y sus novedades prácticamente uniformes. Principalmente porque necesitan contar con un consenso supranacional, la Unión Europea en el caso de España, o es necesaria una unidad de actuación y coordinación de intereses comunes como es la OCDE. Por lo tanto, todo lo que acontece fuera de nuestras fronteras, en mayor o menor medida, acabará influenciando la normativa española y su interpretación.

Por lo tanto, este blog nace con la idea de tratar desde un punto de vista práctico, crítico y ameno todas aquellas novedades fiscales que tienen lugar en el ámbito internacional que afecten o puedan acabar afectando a nuestro sistema fiscal español, y por tanto, a empresas españolas con presencia internacional o empresas extranjeras con presencia en España. Igualmente, el propósito de este blog es comentar y compartir con todos los lectores aquellos trabajos, estudios o artículos preparados por universidades y periódicos extranjeros especializados en fiscalidad internacional que aporten un punto de vista adicional y diferente a las fuentes tradicionales.