Tax Abuse and Aggressive Tax Planning in the BEPS Era: How EU Law and the OECD Are Establishing a Unifying Conceptual Framework in International Tax Law, despite Linguistic Discrepancies

Abstract

The article aims to demonstrate how EU law and the OECD are establishing a unifying conceptual framework in which the two different seminal phenomena, “tax abuse” and “aggressive tax planning”, can be acknowledged in the new (global) operating environment. The purpose of this article is to critically assess the meaning of these concepts, broadly used in several EU and OECD soft law instruments. These concepts cannot be completely formalized or objectified, but the resulting uncertainty of their application can be reduced to an acceptable level. In the search for a useful reference point to delimit tax abuse from aggressive tax planning, particular attention is paid to the definitions conveyed (and the wording used) by EU institutions and the OECD. Indeed, the purpose of this article is also to establish a starting point for the discussion on linguistic discrepancies that can arise, and it provides for a preliminary categorization of them. Further to the analysis of these discrepancies, the article explains the reciprocal influences between the European Union and the OECD, and highlights how the promotion of a theoretical understanding and careful empirical handling of the relevant practices should enrich the discussion and foster consistent implications. In particular, how consensus on the development of a linguistic and conceptual framework could enhance the resolution of some issues is emphasized and, more specifically, to what extent EU law allows the BEPS Project to be applied in the EU area, knowing that EU institutions cannot provide for any ex ante guarantee on the compliance of BEPS with EU law. To ensure that the important goals of global tax coordination – that the implementation of the BEPS Project implies – are achieved, this contribution aims to delineate preliminary clarifications in these areas.