SAU, Alm.del - 2021-22 - Endeligt svar på spørgsmål 155: MFU spm. om muligheden for at nægte udbetaling af hjælpepakker til firmaer i skattely, til skatteministeren

Skatteudvalget 2021-22
SAU Alm.del
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Ref. Ares(2021)5765922 - 21/09/2021

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Europaudvalget 2021-22

EUU Alm.del - endeligt svar på spørgsmål 33

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EUROPEAN COMMISSION

DIRECTORATE-GENERAL

TAXATION AND CUSTOMS UNION

Direct Taxation, Tax coordination, Economic Analysis and Evaluation

The Director

Brussels, 21 September 2021

TAXUD.D/BA/IM

TAXUD.D.1(2021)6525683

Ms Lise Bo Nielsen

Head of Corporate Tax

Danish Ministry of Taxation

by e-mail:

[email protected]

Subject:

Follow up on the Commission Recommendation of 14 July 2020 on

making State financial support to undertakings in the Union

conditional on the absence of links to non-cooperative jurisdictions –

your email of 31 August 2021

Dear Ms Nielsen,

I would like to thank you for your third set of follow up questions on the Commission

Recommendation of 14 July 2020 regarding making State financial support to

undertakings in the Union conditional on the absence of links to non-cooperative

jurisdictions. As for our responses of 21 September and 15 December 2020 to your first

and second set of questions respectively, I would like to reiterate that the

Recommendation represents the official position of the Commission on the issues it deals

with. All the relevant Commission Services, including the Legal Service, contributed to

the completion of this Act. As such, the Recommendation reflects the Commission’s

views on the interpretation and application of the Union’s fundamental freedoms, as

established in the EU Treaties, and is addressed to Member States. It does not prejudge,

however, any future pronunciation of the European Court of Justice on this issue.

Against this background and in view of your request for clarification and the arguments

that your Services brought forward, I would like to make the following comments.

Regarding the existence of an unlawful restriction, you express the view that

undertakings should be refused State financial support only where they are directly held

by entities in listed jurisdictions. You thus advance the argument that undertakings which

are indirectly held by entities in listed jurisdictions – notably, via entities of the same

group in other EU Member States - cannot be refused the financial support. In your

analysis, refusing the financial support in such circumstances would amount to an

unlawful restriction of the Freedom of Establishment.

Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111

Office: SPA3 06/055 - Tel. direct line +32 229-69785

[email protected]

SAU, Alm.del - 2021-22 - Endeligt svar på spørgsmål 155: MFU spm. om muligheden for at nægte udbetaling af hjælpepakker til firmaer i skattely, til skatteministeren

In support of this view, you make reference to a list of judgments by the Court of Justice

of the European Union (ECJ) in the field of ‘restriction’ on the fundamental freedoms

and you draw a distinction from the concept of discrimination. You argue that

“even

national measures which do not imply a difference in treatment (“discrimination”)

between purely internal situations and cross-border situations can be considered as a

restriction of the freedom of establishment.”

You also quote the recent case C-71/20, VAS Shipping ApS of 8 July 2021 where the

ECJ confirmed in point 22 that the term ‘restriction’

“should be understood as measures

which, although applied without discrimination on grounds of nationality, may make it

more difficult or less attractive to exercise the freedom of establishment”.

We can agree that the notion of a direct tax restriction goes beyond a mere discrimination

on the grounds of nationality and covers measures providing for a difference in treatment

between domestic and cross-border activities, where the cross-border situations/activities

are treated less favourably. We would also wish to clarify that this line of thought has to

be placed within the contours of the concept of the Freedom of Establishment. In a

situation where the link to an EU listed jurisdiction involves indirect ownership, the right

of establishment of one (or more) EU-resident entity, which is interposed between the

Danish beneficiary (‘interposed entity’) and the entity in the EU listed jurisdiction, is not

affected. This is because

the criterion of exclusion from the State financial support in

Denmark is not the place of residence of the interposed entity but the residence of

the ultimate beneficial owner, i.e. of the entity in the EU listed jurisdiction.

The latter

being outside the EU, the Freedom of Establishment is out of scope. It follows that the

concept of ‘restriction’, as analysed and delineated by the ECJ is not applicable within

this set of facts. It would have been applicable if the exclusion from financial support

were contingent upon conditions linked to characteristics and circumstances associated

with any EU-resident interposed entities (which, for instance, is the case in C-299/02,

Commission v. Kingdom of the Netherlands).

Furthermore, it should also be noted that the one (or more) EU-resident interposed

entity/entities would itself/themselves not be eligible for the financial support in its/their

own Member State of establishment in accordance with the Commission’s

Recommendation. In other words,

none of the EU-resident entities in the chain of

control between the Danish beneficiary and the entity in an EU listed jurisdiction is

eligible for the financial support in their respective Member State. This cannot be

seen as a restriction on the right of establishment of these interposed entities in

Denmark.

Finally, even if nevertheless the ECJ found a restriction, this would be justified by the

need to ensure fiscal supervision and prevention of tax evasion and money laundering in

connection with jurisdictions that have failed the EU listing criteria and therefore suffer

fundamental failures in the fields of tax transparency and harmful tax competition.

We sincerely hope that the above points clarify your doubts in connection with the

Commission Recommendation of 14 July 2020.

You also addressed a second question, which involves whether the Commission’s

interpretation of the notion of ‘restriction’ on the Freedom of Establishment is limited to

the issues covered by the Recommendation or should be understood as applicable in all

contexts. Although the principles that permeate the fundamental freedoms are common,

as a matter of principle, in all fields of the single market, it is obvious that these have to

be interpreted in line with the features of each policy area where there is EU law.

SAU, Alm.del - 2021-22 - Endeligt svar på spørgsmål 155: MFU spm. om muligheden for at nægte udbetaling af hjælpepakker til firmaer i skattely, til skatteministeren

I hope that the explanations above bring more clarity to the issues that your Services have

raised. In this regard, I wish to reiterate that the input above is provided in the spirit of

cooperation between the Commission and Denmark. The official position of the

Commission remains the full text of the Recommendation, as approved by the College of

Commissioners on 14 July 2020.

Yours sincerely,

(e-signed)

Benjamin ANGEL

c.c.:

Ms Lise WINTHER JENSEN ([email protected])

Ms Kim LUNDGAARD HANSEN ([email protected])

Ms Kristina ELLEGAARD RASMUSSEN ([email protected])

Ms Jasna VOJE

Mr Bernardus ZUIJDENDORP

Ms Ioanna MITROYANNI

Electronically signed on 21/09/2021 12:43 (UTC+02) in accordance with article 11 of Commission Decision C(2020) 4482