The European Court of Justice blessed international tax arbitrage in a VAT transaction by means of which taxpayer was able to obtain a credit for input VAT on purchases while avoiding payment of output VAT on sales. The result was obtained thanks to an inconsistent characterization of the transaction for VAT purposes under UK and German law. UK treated the transaction as a financial service taxable in the country of supplier (Germany), while Germany treated it a as a sale of goods taxable in the country of the goods are sold (UK).
avoidance
Italy’s Supreme Court Rules Against Fictitious Foreign Tax Residency
By Marco Rossi on
Italy’s Supreme Court ruled against taxpayer in a case concerning use of fictitious tax residency for tax avoidance purposes. Italy was held to be the real tax residency as the place where taxpayer had maintained his center of main interests…
Italy’s Government to Approve New Rules on Transfer Pricing Documentation, Anti Tax Abuse
By Marco Rossi on
A decree presented to the Italian Council of Ministers today will introduce new provisions on contemporaneous documentation for transfer pricing purposes and a new black list with a duty to disclose any transaction carried out in or with any black listed countries to the tax administration. Also, the minimum threshold for the duty to report cross border transfers of money will be reduced to euro 5,000.…
Italian Supreme Court Held That Burden of Proof in Tax Avoidance Cases is Upon Taxpayers
By Marco Rossi on
Italian Supreme Court in judgment n. 8487 of April 8, 2009 placed upon taxpayers the burden to prove the existence of valid economic reasons to avoid the application of anti abuse provision and denial of tax benefits in tax avoidance transactions. The decision contradicts a previous ruling, n. 1465 issued on January 21, 2009 in which the burden of proof was placed upon the tax administration.…
Burden of Proof of Tax Avoidance on Tax Administration, Italian Supreme Court Says
By Marco Rossi on
The Tax Section of the Italian Supreme Court in its judgment n. 1465 of January 21, 2009 held that the tax administration bears the burden to prove that a transaction is carried out solely to obtain a tax advantage, in order to disregard the transaction and deny the tax benefits obtained by the taxpayer under…