Beneficial Ownership, Tax Abuse and Legal Pluralism: An Analysis in Light of the CJEU’s Judgment Concerning the Danish Cases on Interest

Abstract

The complex interconnections characterizing the relationship between the international tax treaty law system and the EU tax law system increasingly require attention. Accordingly, within the framework of this article, the judgment of the EU Court of Justice concerning the Danish cases on interest has provided the concrete opportunity to evaluate the significant effects that a lack of coordination between these two systems may have. In fact, due to the broad economic concept of beneficial owner applied by the EU Court of Justice vis-à-vis the narrower OECD concept, there is no complete coordination between EU tax law and international tax treaty law. Even if, under the OECD approach, further conduit arrangements are covered under Article 7(1) of the MLI (or the anti-conduit mechanism), the different scope of the OECD and the EU concepts of abuse is an obstacle to complete coordination. Very significantly, this lack of coordination may concretely create situations of conflict between the international and the EU obligations held by the same EU Member State. The significant practical relevance of these conflicts, which cannot be solved on the basis of a common conflict rule, requires solutions in terms of global tax governance. Accordingly, the author has developed her theory on the basis of a legal pluralist approach. Beneficial owner, Danish cases on interest, legal pluralism, global tax governance, tax abuse, coordination, tax treaties, EU law, conflict rules, dialectical approach, PPT rule.