2016 saw dramatic change in the tax landscape in which international business is conducted. Most of this change revolved around the rollout of base erosion and profit shifting (BEPS) following the endorsement of the reports containing the 15-point action plan by the G20 leaders in November 2015, both in terms of its adoption in domestic tax laws and follow-up action by the EU Commission.
As well as the implementation of BEPS, 2016 also saw the European Commission adopting an increasingly aggressive use of state aid laws to attack the application by Member States of their domestic tax laws and the tax rulings they issue to multinational taxpayers operating across international borders. Many observers are concerned that the European Commission has crossed a fine line and is imposing its authority over Member States’ sovereign right to determine their own direct taxes. On a more practical level, the European Commission’s approach has drawn expressions of concern from the US Treasury on the basis, inter alia, that the Commission’s approach is inconsistent with international norms, and that it undermines the international tax system and the BEPS initiative. It will be interesting to see where this potential conflict between the US Treasury, supported by certain EU Member States (notably Ireland, which is contesting the findings in the Apple case), and the European Commission, goes in 2017.
Despite the uncertainty so much radical change produces, enterprises will continue to trade across borders and establish a presence in jurisdictions beyond the boundaries of their home state. When doing so they will look to the tax adviser for guidance and confirmation of their tax position. While it is beyond any book to provide all the answers, it is hoped that this volume will prove to be a useful starting point for readers.
Tim Sanders is an English-qualified solicitor and fellow of the Chartered Institute of Taxation. After practising law for 35 years, he retired from private practice and as head of the European tax practice of Skadden, Arps, Slate, Meagher & Flom LLP at the end of 2015, and he currently works in-house as an international tax adviser to an NYSE-listed company. He continues to work on a wide range of corporate and finance taxation matters, many with international aspects.
Mr Sanders is listed as a leading tax adviser in a number of directories, and is the author of Tottel Publishing’s Tax Indemnities and Warranties and the chapter on directors’ benefits in Tolleys’ Company Law.
The publisher acknowledges and thanks the following for their learned assistance throughout the preparation of this book: