Comment in response to the public consultation paper issued by the European Commission on 28th January 2011 on taxation problems that arise when dividends are distributed across borders to individual investors and possible solutions

The EU Commission identifies two major shortcomings of the cross‐border taxation of dividends received by portfolio shareholders in its consultation paper. Firstly, withholding taxes may be levied and credited in a discriminatory manner which may constitute an infringement of the free movement of capital set out in Articles 63 to 66 of the Treaty on the Functioning of the European Union. Secondly, the imposition of withholding taxes may result in double taxation and as a consequence impede investors from investing in foreign corporations. Hence, the benefits of international risk diversification are not fully exploited which may result in welfare losses.1 The parent‐subsidiary‐directive2 addresses this issue by prohibiting the imposition of dividends paid to substantial shareholdings. A comparable relief is, however, not available for portfolio and individual investors. In turn, withholding taxes on interest have been considerably reduced and even abolished by many member states whereas withholding taxes on dividends are still common and significant.3 This report therefore discusses how the above highlighted issues concerning the cross‐border taxation of dividends received by individuals can be resolved. The taxation of portfolio investments by corporations which is also left out of the scope of the parent‐subsidiary‐directive is not addressed in the following as this issue requires a separate analysis

Romania's development to a low-tax country: Effective corporate tax burden in Romania from 1992 to 2010 and Romania's current ranking among the eastern European member states

We trace back Romania's development to a low-tax country among the Member States of the European Union by analysing the major tax law changes in corporate taxation since 1992. We find that the significant reduction of the corporate income tax rate from 45% in 1992 to 16% since 2005 has not been accompanied by a comprehensive broadening of the corporate income tax base as prevalent in many longstanding Member States of the EU and the OECD. Our analysis is not limited to a comprehensive description of the development of corporate taxation in Romania, but goes on with a numerical analysis of the tax burdens at different periods of time which constitute milestones in the development of corporate taxation in Romania. For this purpose, we apply the European Tax Analyzer, which is a computer-based model firm approach. We find that the average company tax burden of the underlying model company has dropped significantly by almost 65% since 1992. Furthermore, our numerical analysis does not confirm the tax base broadening policy. As a result, Romania holds position two among the group of Central and Eastern European EU Member States. --corporate taxation,effective tax burden,transition economy,EU accession countries,tax reform,tax-rate-cum-base-broadening reform

Effective tax rates under IP tax planning

Tax planning with intangibles has become one of the most popular and most vividly debated topics in international taxation. We incorporate various intellectual property (IP) tax planning models into forward-looking measures of effective tax rates, namely the disposal of intangibles to low-tax subsidiaries, intra-group licensing arrangements, and intra-group contract R&D. In doing so, we draw upon the methodology put forward by Devereux and Griffith and amend this model by considering a research & development (R&D) investment which is carried out by a parent company, whereby the resulting intangible is exploited by a foreign subsidiary. We point out analytically under which conditions IP tax planning achieves the objective of reducing the effective average tax rate of the group. We find that the disposal of intangibles to low-tax subsidiaries does not achieve this tax planning objective, if the true value of the asset is subject to tax upon the disposal. We show to what extent the parent must understate the value of the intangible in order to reduce the group’s tax burden. We furthermore point out that contract R&D may generally achieve a significant lower effective tax burden. We present cost of capital and effect average tax rates to illustrate these findings

Fiscal Investment Climate and the Cost of Capital in Germany

Measured in terms of the cost of capital, the investment climate in Germany currently ranks 24th Key Messages out of the 28 EU member states. However, this represents an improvement over the year 2000, when Germany ranked 27th. In fact, among the EU-28, Germany has seen the most significant decline in the cost of capital between 2000 and 2014, from 7.7% to 6.5%. This decline is mainly attributable to considerable reductions in the country’s corporate tax rate. The comprehensive corporate tax reforms enacted in 2001 and 2008 thus appear to have succeeded in improving the investment climate in Germany. Nevertheless, in comparison to most other EU member states, the cost of capital in Germany is still quite high. In order to further improve the investment climate in Germany, the (temporary) re-introduction of reduced-balance tax depreciation for movable fixed assets is currently being discussed. However, our analysis indicates that this would only slightly decrease the cost of capital from 6.5% to 6.3%. When we additionally account for the personal taxation of individual investors, a different picture emerges: The overall cost of capital in Germany currently amounts to 6.0%, and could be reduced considerably by taxing dividends and capital gains at lower rates than interest income

Intellectual Property (IP) box regimes : tax planning, effective tax burdens, and tax policy options

This thesis contributes to the current debate on Intellectual Property (IP) Box regimes and IP tax planning. It provides a comprehensive survey of the 12 IP Box regimes in place in Europe by the end of 2014 and presents effective tax rates associated with the IP Box regimes and the use of popular tax planning models. Moreover, it evaluates the IP Box regimes on the basis of the EU State Aid rules and the EU Code of Conduct for business taxation and discusses options to reform the taxation of IP income in order to counter profit shifting and tax base erosion

Romania's development to a low-tax country - Effective Corporate Tax Burden in Romania from 1992 to 2010 and Romania's current ranking among the Eastern European Member States

We trace back Romania’s development to a low-tax country among the Member States of the European Union by analysing the major tax law changes in corporate taxation since 1992. We find that the significant reduction of the corporate income tax rate from 45% in 1992 to 16% since 2005 has not been accompanied by a comprehensive broadening of the corporate income tax base as prevalent in many longstanding Member States of the EU and the OECD. Our analysis is not limited to a comprehensive description of the development of corporate taxation in Romania, but goes on with a numerical analysis of the tax burdens at different periods of time which constitute milestones in the development of corporate taxation in Romania. For this purpose, we apply the European Tax Analyzer, which is a computer-based model firm approach. We find that the average company tax burden of the underlying model company has dropped significantly by almost 65% since 1992. Furthermore, our numerical analysis does not confirm the tax base broadening policy. As a result, Romania holds position two among the group of Central and Eastern European EU Member States

Reconnecting the University to the Region of Twente : Findings from the RUNIN-Design Lab Think Tank

The RUNIN project's Design Lab Think Tank took place on 28th June 2018. Its aim was to discuss the topic of universities' engagement with society, specifically in their region. It used a world café format that brought together regional stakeholders to discuss how the University of Twente (UT) can incorporate societal questions in its core activities and, through this, create regional benefits. This report provides a description of the event, a summation of the initiatives proposed and an analysis of the discussion that was prompted by the sub-questions around the subject of universities' societal engagement

Feasibility and clinical utility of endoscopic ultrasound guided biopsy of pancreatic cancer for next-generation molecular profiling.

Next-generation sequencing is enabling molecularly guided therapy for many cancer types, yet failure rates remain relatively high in pancreatic cancer (PC). The aim of this study is to investigate the feasibility of genomic profiling using endoscopic ultrasound (EUS) biopsy samples to facilitate personalised therapy for PC. Ninty-five patients underwent additional research biopsies at the time of diagnostic EUS. Diagnostic formalin-fixed (FFPE) and fresh frozen EUS samples underwent DNA extraction, quantification and targeted gene sequencing. Whole genome (WGS) and RNA sequencing was performed as proof of concept. Only 2 patients (2%) with a diagnosis of PC had insufficient material for targeted sequencing in both FFPE and frozen specimens. Targeted panel sequencing (n=54) revealed mutations in PC genes (KRAS, GNAS, TP53, CDKN2A, SMAD4) in patients with histological evidence of PC, including potentially actionable mutations (BRCA1, BRCA2, ATM, BRAF). WGS (n=5) of EUS samples revealed mutational signatures that are potential biomarkers of therapeutic responsiveness. RNA sequencing (n=35) segregated patients into clinically relevant molecular subtypes based on transcriptome. Integrated multi-omic analysis of PC using standard EUS guided biopsies offers clinical utility to guide personalized therapy and study the molecular pathology in all patients with PC