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LLM 119 - Tax 3: EU Tax

Diamond Graduate School of Law

LL.M. Program

Syllabus for EU & TAX

Summer Semester - 15 weeks and an exam week

Second week June - last week September

* COURSE DESCRIPTION

The European Union embraces 25 countries and 454 million people, and it deals with a wide range of tax and VAT issues of direct importance for individuals and corporations. When Bulgaria and Romania join the Union in 2007, the Union will embrace 484 million people compared with 298 million in the USA. Many international tax issues are on the agenda in the EU, like Transfer Pricing, Home State Taxation, Tax Harmonization, Savings Directive, VAT and the Place of Supply, etc. Taxation within the EU is more important than ever. The European Court of Justice has made decisions on hundreds of tax and VAT cases, which affect corporations and individuals cross Europe. EU & TAX addresses the importance of EU Taxation and the European Court of Justice and the impact for each member state, corporations and individuals, but also the fundamental principles within the Union.

Instructor:

The course is taught and instructed by Professor Knut Olsen. He has 25 years experience within taxation. He started his career as a tax and VAT inspector in Norway, a position he held for 7 years, before he established his own account and tax-advising bureau. For 4 years he was a lecturer at the Directorate of Taxes for County Tax Inspectors, where he had the sole responsibility for the tax syllabus for the 2nd year students. He was also lecturing at the Norwegian School of Management, Ostfold Regional College and Oslo Advanced College. He is engaged as an international tax course supervisor by PricewaterhouseCoopers, where he gives lectures for the tax lawyers.

Knut Olsen is a PhD student at Dundee University in Scotland. His subject is within international petroleum taxation / tax treaties. He fulfilled a LLM and a certificate in international taxation at St. Thomas University, Miami in 2003. He is also authorized as a legal services provider, equivalent to a chartered tax advisor, and as an authorized account. Furthermore, he has Special Subject Examination in Tax Law and 3 years of examination of law.

* PURPOSE

This course will be taught at the executive level and will employ case studies as well as global case analysis.

* The course is a 3 credits LLM course
* No pre-requisites are required.

The purposes of the EU Tax Course are to familiarize you with:

* the four freedoms, the institution and the bodies,
* the prohibition of discrimination,
* other fundamental principles within the Union,
* the EU Treaty and relevant direct tax and VAT provisions,
* corporate and individual taxation within the EU,
* the European Court of Justice and its landmark cases,
* State aid and taxation and tax co-operation, control and anti-fraud within the EU

COURSE PROCEDURE

This course will involve fifteen weekly modules that are delivered through on-line instruction pursuant to current program specifications. Each module will contain text material, study guide instruction, and weekly interactive participation. Text material may contain a combination of code sections, cases, and commentary materials. Study guides will contain commentary materials upon the text materials with imbedded exercises and assignments to be completed either independently or within a group of two to five persons. Assignments may be submitted directly to the Instructor or submitted to the classroom.

Questions will be posed in case study format or in issue format. Answers may be short form (one page) form or long form (five page analysis).

During the semester, module based audio and videotape lecture construction will be explored as well as the provision to students through streaming technology.

During the fifteen-week semester, the students will have one technology skills and control week. During the first week of the course, the student will spend the time acquiring and testing the necessary accessing components of the course, including: blackboard skills, database access, proxy server access, material download, and other technical issues. Also, students will introduce themselves and identify with each other (camaraderie and network building).

During the semester, each student will submit at least two assignments. Separately, the Instructor is available for office hour private counselling through email, telephone, and by residential office appointment.

Other assignments may receive feedback and will receive a grade, recorded in the online grade book that students may assess their performance.

ATTENDANCE AND PARTICIPATION

This online course requires attendance, which is measured by:

i) the modular weekly interactive participation opportunities in the classroom,

ii) mandatory weekly participation through being called upon to address the class for certain modules, as well as

iii) modular study guide assignments.

Missing mandatory weekly participation assignments is the equivalent of being not prepared in class and will result in a zero for that assignment. Not turning in study guide assignments will result in a zero for that assignment.

EVALUATION OF STUDENT PERFORMANCE

Grades will be determined through a combination of factors, as follows:

a) Weekly participation – 40 %

b) Weekly study guide assignment – 30 %

c) Final exam – 30 %

* REQUIRED TEXT

Electronic texts edited and authored by the Instructor, supplemented by reference materials. Reference materials will include source materials and secondary materials.

REFERENCE MATERIAL

Research is conducted using EU and European Court of Justice web pages, as well as, and most importantly, value added databases, such as:

- Lexis-Nexis

- BNA US and foreign materials

- BNA International

- CCH International databases

- CCH USA databases

- Butterworths UK and international materials

- QuickLaw

- Checkpoint-RIA-WGL-Gee

- Westlaw

- Tax Analysts

- Foreign Law Publishers

- World Compliance database

- LLM and PhD thesis and dissertation databases

- Hein

- Matthew Bender databases

- Lois Law e-libraries

- Amongst other databases that we subscribe to for you (see the external links

in the classroom for details).

WEEKLY SYLLABUS

Module 1 – Overview

General overview

* The objectives of the Union
* EU history in a nutshell
* EU institutions and bodies
* T he fundamental principles and rights
* The EU Treaty and its relevant provision with regard to taxation
* EU legislation versus domestic law of member states
* Tax sites / Where to find EU tax documents
* Essential and suggested reading

Learning objectives:

Be familiar with the fundamental ideas and principles of the EU, namely a single

marked without borders, obstacles and discriminations. Be familiar with EUs main

web pages, especially the tax pages.
Module 2 - T he fundamental principles and rights

a) General overview

b) The Four Freedoms (free movement of persons, goods, services and capital)

c) Prohibition of discrimination

d) Obligations to respect the national identities and the fundamental political and constitutional structures

d) The principle of loyal cooperation

e) The principle of the primacy of the law of the European Union over the law of the Member States.

f) Essential and suggested reading

Learning objectives:

Be familiar with the most important principles and rights within the European Union.

Module 3 – EU Tax Policy & Tax Strategy

General overview

* EU tax policy
* EU tax strategy
* Essential and suggested reading

Learning objectives:

Be familiar with EU tax policy and strategy and the development within the tax field.

Module 4 – Tax Harmonization

General overview

* Previous development of companies and individuals
* Priorities in the years to come
* Essential and suggested reading

Learning objectives:

Be familiar with the harmonisation in the company tax field within EU and priority

issues for the EU in years to come and also Harmful Tax Regimes in EU.

Module 5 – European Court of Justice - ECJ

General overview

* What is the European Court of Justice?
* The purpose of the Court of Justice
* The role of the ECJ in remedying tax obstacles in the Internal Market
* Landmark tax cases
* (C-292/04) Meilicke-Weyde and (C-475/03) Banca Popolare di Cremona
* (C-270/83) Avoir fiscal
* (C330/91) Commerzbank AG
* (C-1/93) Halliburton Services BV
* (C-311/97) Royal Bank of Scotland )
* (C-120-78) The Cassis de Dijoncase-law
* (C-267/8-91) The Keck and Mithouard case law
* Essential and suggested reading

Learning objective:

To learn how the European Court of Justice works and to be familiar with some landmark court decision within direct taxation. Furthermore, to understand how ECJ’s decisions in the tax field will impact on the Member States.

Module 6 – European Court of Justice – Continued

Overview

* List of landmark cases within taxation
* Landmark cases
* Manninen (C-319/02)
* Bouanich (C-265/04)
* Cadbury Schweppes Plc (C-196/04)
* Lankhorst-Hohorst (C-324/00)
* Bachmann (C-204/90)
* Schumacker (C-279/93)
* Saint Gobain (C-307/97)
* Ritter-Coulais (C-152/03)
* du Saillant (C-9/02)
* Overview court cases in 2006
* Essential and suggested reading

Learning objective:

To establish a basic understanding of ECJ impact on national tax law, and to be familiar with some important landmark cases.

Module 7 – ECJ – The Marks & Spencer Case

General overview

* Facts
* Article 43 and 48
* Restrictions
* Further restrictions by the UK tax authorities
* Back to the UK High Court
* Essential and suggested reading

Learning objective:

To understand the different tax aspects of the European Court of Justice’s potentially most important decision within the tax field, namely the Marks & Spencer case.
Module 8 – Company Taxation

General overview

* Implementing the Lisbon Programme
* Corporate Taxation in the European Union
* Harmful tax competition
* EU Code of Conduct for business taxation
* Essential and suggested reading

Learning objectives:

To achieve a better understanding about company taxation and harmful tax competition within the European Union

Module 9 – Company Taxation Continued

Overview

* Parents-Subsidiary Directive
* Merger Directive
* Interest and Royalties Directive
* Double taxation convention
* Transfer pricing
* Essential and suggested reading

Learning objective:

To achieve a brief overview of some directives and other key tax elements for corporation within EU.
Module 10 – Personal Tax

General overview

* Saving taxation
* Pensions
* Dividend taxation
* Cross-border workers
* Social security contribution
* Double taxation conventions
* European Human Rights Convention
* Essential and suggested reading

Learning objective:

The main objective is to achieve a general understanding about taxation of individuals within the EU.

Module 11 – Fiscal State Aid and Tax Competition

General overview

* EC Treaty – Articles 87-89
* What is State aid?
* Legal / illegal tax aid
* Recovery of granted aid
* Recent decisions in ECJ
* Tax competition
* EC Treaty Articles 81 – 82
* Useful web pages
* Essential and suggested reading

Learning objectives:
To understand the concept of State aid, and to be able to tell the distinction between legal and unlawful State aid. Furthermore, you should achieve knowledge about the tax competition concept within the EU.
Module 12 – Societas Europaea (SE) (The European Company)

General overview

* Advantages
* Disadvantages
* Taxation
* Essential and suggested reading

Learning objectives:

To understand the concept of the European Company and the main tax issues for the European Company.

Module 13 – Tax Co-operation, Control & Anti-Fraud

General overview

* European Union strategy to combat tax fraud
* Mutual assistance
* Tax recovery
* Arbitration Convention
* Fiscalis programme
* R isk M anagement G uide for Tax Administrations
* International Tax Dialogue
* OECD's report: Tax Co-operation: Towards a Level Playing Field – 2006 Assessment by the Global Forum on Taxation
* OECD - Manual on the Implementation of Exchange of Information Provisions for Tax Purposes
* OECD Model Tax Treaty – Article 26 Exchange of information
* Essential and suggested reading

Learning objective:

To be familiar with EU strategy for combating tax and fraud and how tax authorities co-operate cross the borders.
Module 14 – VAT

* General overview
* EU Sixth VAT Directive
* Amendment to Sixth VAT Directive 24 July 2006
* Useful EU and VAT links
* Key VAT Documents
* H ow VAT works
* VAT and traders
* VAT and consumers
* VAT harmonisation
* VAT and Fraud
* Landmark VAT cases from the European Court of Justice
* Essential and suggested reading

Learning objective:

To achieve a basic understanding of the VAT system within the EU and to be familiar with some landmark VAT cases of the European Court of Justice.

Module 15 – EU and the Future

a) General overview

b) Essential and suggested reading

Learning objectives:

To be able to imagine where the EU and the European Court of Justice are going during the next 10 – 20 years and what we might have to expect in the future.