1. Revisiting Tax Avoidance EATLP 2016 Ana Paula Dourado SESSION 1 THE MEANING OF AVOIDANCE AND AGGRESSIVE TAX PLANNING IN THE BEPS CONTEXT

2. Austria Brazil Chech Republic Croatia Denmark Finland France Germany Greece Hungary Italy Netherlands Norway Poland Portugal Russia South Africa Spain Sweden Turkey United States NATIONAL REPORTS

3. Tax Avoidance Traditionally: Main features common to domestic and cross-border avoidance The Meaning of Tax Treaty Abuse: Reaction should only be in tax treaties? BEPS does not seem to modify the general concept of avoidance but to Intensify the reaction: legislative and perhaps judicial interpretation of anti- avoidance rules, GAARs, SAARs and TAARs To improve international standards to fight tax avoidance and disparities: PPT rule; reallocation of real functions, assets and risks; SAARS and TAARs: anti- hybrids; CFCs; Interest deductibility

4. Tax Avoidance National Reports Five groups: those who already had GAARs, SAARS and TAARs and were aligned with the OECD standards Are realigning quickly (Austria, France, NL, Spain) Try to realign (most of the national reports) Those who were not aligned: are either trying to realign (Finland) Or not trying yet to realign (Greece, Norway, Russia) Or will face obstacles in Parliament (Brazil, Poland)

5. Aggressive Tax Planning New category? Legal Category? Normally not recognized in national legislation Exception: communication of tax planning schemes BEPS Action 12 Strong policy role, but: coordination? Multiple unilateralisms?

6. Coordination? Is there a common concept of avoidance? Avoidance and/vs. sham transactions Avoidance: no legal definition Avoidance defined by GAARs/interpretation theories Avoidance not defined by TAARs or SAARs

7. Coordination? Is there a common concept of avoidance? In EU countries translation problems of EU legal instruments and case-law has brought innacuracies in domestic legal instruments: evasion, fraude fiscale, avoidance, évasion fiscale (France)

8. Is there a common concept of avoidance? Different Approaches Letter and spirit Advantages not intended by the legal system (Austria) Objective elements (Germany; Sweden) Subjective elements turned into objective (Austria, South Africa) Fraus legis (NL) Based on substance over form (Turkey) Artificiality/Economic substance (Finland; Italy; Spain) Illegal element(Chech; France: fines)

9. Coordination? Is there a common concept of avoidance? Interpretation theories according to economic substance (Croatia; Denmark; Norway; US) Interpretation according to “true content” & “due course of law”(Hungary), “bona fide” (Russia) No recognition of avoidance; no substance over form analysis (Brazil) Expanding the concept of sham transactions (Brazil)

10. Avoidance and GAARS, SAARS and TAARs Jurisdictions with no GAARs have more difficulty in recognizing a concept of tax avoidance and Aggressive Tax Planning The BEPS influence noted in SAARS: although Greece, Italy and Denmark introduced a GAAR recently Most reports announce SAARs to be realigned with BEPS In most cases: GAARs applicable when SAARs are not applicable (Germany doctrine/case-law is more subtle)