Opinion statement ECJ-TF 3/2022 on the EFTA court decision of 1 June 2022 in Case E-3/21, PRA Group Europe, on the discriminatory interaction between the "interest barrier" and group contributions

This is an Opinion Statement prepared by the CFE ECJ Task Force on the PRA Group Europe case, in which the EFTA Court delivered its decision on 1 June 2022. At issue in PRA Group Europe was the interaction of the Norwegian "interest barrier rule" ("interest limitation rule"), which generally limit the deductibility of interest payments to affiliated resident and non-resident entities to 30% of EBITDA, and the group contribution rules, which permit tax effective transfers between group members, but are limited to Norwegian entities. As group contributions also increase the EBITDA of the recipient Norwegian entity (and decrease it at the level of the paying Norwegian entity), companies in the Norwegian tax group can achieve interest deductions under the interest barrier rules where profits ("tax EBITDA") and interest expenses are distributed unevenly between the companies in the group, while a similar opportunity to escape (or lessen the impact of) the interest barrier rules is not available to cross-border groups. The EFTA Court took a combined perspective on the interaction of those rules and found them to constitute an unjustified restriction of the freedom of establishment under Articles 31 and 34 of the EEA Agreement. The EFTA Court's decision is particularly interesting from an EU law perspective, as the interest barrier rule of Article 4 of the Anti-Tax Avoidance Directive (ATAD) similarly foresees the option for Member States to introduce a domestically-limited "interest barrier group" to permit a calculation of exceeding borrowing costs and the EBITD at the local group level. The CFE ECJ Task Force welcomes the EFTA Court's progressive impetus on fundamental freedoms doctrine: PRA Group Europe AS makes it clear that for purposes of identifying a restriction, for establishing comparability and for justification, a combined perspective on the interaction of two sets of rules – here the interest barrier on the one hand and the group contribution regime on the other – is necessary. From that perspective, the interaction of the Norwegian rules on the "interest barrier" and on group contributions leads to unjustified discrimination in cross-border situations. However, if asked to decide on a similar case, the CJEU might take a different approach. First, the CJEU could take a different perspective on the available grounds of justifications and, e.g., accept the coherence of the tax system as such ground. Second, Article 4 ATAD gives the Member States the option to treat an "interest barrier group" as a single taxpayer and to limit the group perspective to domestic settings. Even if such an option in the ATAD is not viewed as "exhaustive harmonization", one could wonder if the mere existence of the ATAD and the value judgments made by the EU legislature therein could lead to a different outcome in the EU (CJEU) vis-à-vis the EEA (EFTA Court).info:eu-repo/semantics/submittedVersio

Opinion Statement ECJ-TF 2/2021 on the CJEU decision of 25 february 2021 in case C-403/19, société générale, on the calculation of the maximum amount of a foreign direct tax credit

The Court’s judgment in Société Générale reinforces the established case law that EU law neither prohibits juridical double taxation as such nor does it put an obligation on the residence Member State to prevent the disadvantages which could arise from the exercise of competence thus attributed by the two Member States. The parallel existence of taxing jurisdiction, however, must be distinguished from the exercise of such jurisdiction by each Member State: While Member States are free to determine the connecting factors for the allocation of fiscal jurisdiction in tax treaties, “the exercise of the power of taxation, so allocated by bilateral conventions for the avoidance of double taxation, the Member States must comply with EU rules and, more particularly, observe the principle of equal treatment”. It is generally accepted in the Court’s case law that both the ordinary credit and exemption (also with progression) are permissible methods to avoid double taxation, and the Court in Société Générale has confirmed this position specifically with regard to the “maximum deduction” in the ordinary credit method in tax treaties, even though it can result in a disadvantage for cross-border income as compared with domestic income. As the disadvantage in Société Générale was due to the difference between gross-basis taxation of dividends in the source Member States (Italy, the Netherlands and the UK) and net-basis taxation of those foreign-source dividends in the residence State (France), it remains to be seen if future cases will bring clarity in light of the EFTA-Court’s Seabrokers judgment as to which expenses can be lawfully allocated to foreign income from the perspective of the residence Member State. The CFE Tax Advisers Europe stresses that in an Internal Market neither (unintended) double non-taxation nor double taxation is acceptable. It therefore calls on all EU institutions to analyze and address the remaining issues of juridical double taxation (including in the context of the upcoming actions amending current corporate tax directives).info:eu-repo/semantics/publishedVersio

Opinion Statement ECJ-TF 2/2022 on the CJEU decision of 27 January 2022 in case C-788/19, European Commission v Kingdom of Spain (form 720), on the lack of proportionality of the consequences derived from the failure to provide information concerning assets or rights held in other member states of the European Union or the EEA

This is an Opinion Statement prepared by the CFE ECJ Task Force on the Commission v Spain case (also cited as the 'Form 720' case), in which the First Chamber of the Court of Justice of the EU (ECJ) delivered its decision on 27 January 2022. The Court, in its decision, ruled in favour of the action brought by the Commission and did not fully follow the reasoning of AG Saugmandsgaard Øe in his Opinion of 15 July 2021, who proposed only to partially accept the action brought by the Commission. The Court held that the Kingdom of Spain had failed to fulfil its obligations under articles 63 TFEU and 40 of the EEA Agreement by imposing disproportionate measures on the failure to duly comply with the obligation to provide information concerning assets and rights located abroad. The Spanish legislation provided for very serious economic consequences, such as the taxation of the value of not duly declared assets and rights as unjustified capital gains with no statute of limitations period. The legislation also provided for a proportional fine of 150% of the tax calculated on amounts corresponding to the value of those assets or those rights, which could be applied concurrently with flat-rate fines. At the same time, such flat-rate fines were much higher than the penalties imposed in respect of similar infringements in a purely national context, not being capped by any amount. Commission v. Spain is an important case as it addresses a number of relevant issues regarding the limits that the Member States must respect when implementing measures to counteract international tax avoidance and evasion.info:eu-repo/semantics/publishedVersio

Opinion Statement ECJ-TF 1/2022 on the CJEU Decision of 25 November 2021 in case C-437/19, état luxembourgeois v L, on the conditions for information requests and taxpayer remedies

The CFE Tax Advisers Europe welcomes the judgment of the Court as it provides further clarification on the legal protection of the information holders afforded by Article 47 of the Charter of Fundamental Rights of the European Union in cases of cross-border exchange of information. Article 47 of the Charter guarantees that national courts can review the cross-border information request in order to assess its legality and also that the information holder must be able to ascertain the reasons upon which the order they receive is based. Moreover, the CFE Tax Advisers Europe welcomes the illumination regarding the concept of “foreseeable relevance”, but also notes that additional clarification will be needed to distinguish permissible group requests from illegal “fishing expeditions”.info:eu-repo/semantics/publishedVersio

Opinion statement ECJ-TF 3/2021 on the CJEU decision of 18 March 2021 in case C-388/19, MK v Autoridade Tributária e Aduaneira, on the taxpayers’ option to avoid discriminatory taxation of capital gains

The CFE welcomes the judgment as it clearly refers to a case of unjustified discrimination. However, there are some questions that are left open (and that Court was not required to provide an answer). The Court’s judgment in MK reinforces the established case law that EU law prohibits the adoption of non-EU compliant regimes, even if they are offered as an option to fully EU-compliant regimes. Member States are still free to adopt optional regimes but have to ensure that each one of the routes that the taxpayer may elect does not lead to unfavourable tax treatment. The CFE stresses, however, that the creation of EU-compliant options should not necessarily imply that Member States simply extend the rules conceived for residents to non-residents, as such extension may be quite both burdensome and disproportional. The CFE notes that MK may lead Member States to adopt simplified rules that end up treating non-residents more favourably. Which should not be regarded as a matter of unfairness, taking into account that they will normally be again subject to taxation at the Residence Member State, which is(traditionally) the one placed in the best position to assess a taxpayer’s ability to pay and their corresponding final tax burden.info:eu-repo/semantics/publishedVersio

Opinion statement ECJ-TF 4/2022 on the ECJ decision of 22 September 2022 in case C-538/20, W AG, on the deductibility of foreign final losses

In this CFE Opinion Statement, submitted to the EU Institutions in November 2022, the CFE ECJ Task Force comments on the ECJ decision of 22 September 2022 in W AG (Case C-538/20), on the deductibility of foreign final losses. The W AG decision makes it clear that comparability should be examined differently depending on whether the exemption is granted by domestic or tax treaty law. The CFE ECJ Task Force has reservations regarding this distinction. For the taxpayer, an exemption has the same economic effects regardless of whether it is adopted through domestic law or tax treaty law. Moreover, W AG departs from the Court’s reasoning and thinking in Lidl Belgium, which also concerned Germany and the same rules. Ideally, the Court should have made this explicit. Finally, it remains to be seen whether Marks and Spencer (Case C-446/03) is still “good law” or if W AG was one of the final nails in the coffin of the “final loss” doctrine.info:eu-repo/semantics/submittedVersio

Commentaire ECJ TF 2/2021 de la décision de la CJUE du 20 janvier 2021 dans l'affaire Lexel AB (C-484/19) concernant l'application des règles suédoises de déductibilité des intérêts

peer reviewedThis CFE Opinion Statement, submitted to the EU Institutions on 9 April 2021, addresses the decision of the Court of Justice of the European Union (First Chamber) (ECJ) of 20 January 2021 in Lexel AB (Case C-484/19).  SE: ECJ, 20 Jan. 2021, Case C-484/19, Lexel AB v. Skatteverket, Case Law IBFD. The ECJ gave its decision without an Opinion of an Advocate General. The case concerned the application of the Swedish interest deductibility rules

How do General Practitioners experience providing care for their psychotic patients?

BACKGROUND: In primary care, GPs usually provide care for patients with chronic diseases according to professional guidelines. However, such guidelines are not available in the Netherlands for patients with recurring psychoses. It seems that the specific difficulties that GPs experience in providing care for these patients hinder the development and implementation of such guidelines. This study aims to explore the chances and problems GPs meet when providing care for patients susceptible for recurring psychoses, including schizophrenia and related disorders, bipolar disorder, and psychotic depression. METHODS: A qualitative study of focus group discussions with practising GPs in both town and rural areas. Transcripts from three focus groups with 19 GPs were analysed with the computer program 'Kwalitan'. Theoretical saturation was achieved after these three groups. RESULTS: Analysis showed that eight categories of factors influenced the GPs' care for psychotic patients: patient presentation (acute vs. chronic phase), emotional impact, expertise, professional attitude, patient related factors, patient's family, practice organization, and collaboration with psychiatric specialists. CONCLUSION: Current primary care for psychotic patients depends very much on personal characteristics of the GP and the quality of local collaboration with the Mental Health Service. A quantitative study among GPs using a questionnaire based on the eight categories mentioned above would determine the extent of the problems and limitations experienced with this type of care. From the results of this quantitative study, new realistic guidelines could be developed to improve the quality of care for psychotic patients

Care for patients with severe mental illness: the general practitioner's role perspective

BACKGROUND: Patients with severe mental illness (SMI) experience distress and disabilities in several aspects of life, and they have a higher risk of somatic co-morbidity. Both patients and their family members need the support of an easily accessible primary care system. The willingness of general practitioners and the impeding factors for them to participate in providing care for patients with severe mental illness in the acute and the chronic or residual phase were explored. METHODS: A questionnaire survey of a sample of Dutch general practitioners spread over the Netherlands was carried out. This comprised 20 questions on the GP's 'Opinion and Task Perspective', 19 questions on 'Treatment and Experiences', and 27 questions on 'Characteristics of the General Practitioner and the Practice Organisation'. RESULTS: 186 general practitioners distributed over urban areas (49%), urbanised rural areas (38%) and rural areas (15%) of the Netherlands participated. The findings were as follows: GPs currently considered themselves as the first contact in the acute psychotic phase. In the chronic or residual phase GPs saw their core task as to diagnose and treat somatic co-morbidity. A majority would be willing to monitor the general health of these patients as well. It appeared that GP trainers and GPs with a smaller practice setting made follow-up appointments and were willing to monitor the self-care of patients with SMI more often than GPs with larger practices.GPs also saw their role as giving support and information to the patient's family.However, they felt a need for recognition of their competencies when working with mental health care specialists. CONCLUSION: GPs were willing to participate in providing care for patients with SMI. They considered themselves responsible for psychotic emergency cases, for monitoring physical health in the chronic phase, and for supporting the relatives of psychotic patients

Integrated care to address the physical health needs of people with severe mental illness : a rapid review

Background People with mental health conditions have a lower life expectancy and poorer physical health outcomes than the general population. Evidence suggests that this discrepancy is driven by a combination of clinical risk factors, socioeconomic factors and health system factors. Objective(s) To explore current service provision and map the recent evidence on models of integrated care addressing the physical health needs of people with severe mental illness (SMI) primarily within the mental health service setting. The research was designed as a rapid review of published evidence from 2013–15, including an update of a comprehensive 2013 review, together with further grey literature and insights from an expert advisory group. Synthesis We conducted a narrative synthesis, using a guiding framework based on nine previously identified factors considered to be facilitators of good integrated care for people with mental health problems, supplemented by additional issues emerging from the evidence. Descriptive data were used to identify existing models, perceived facilitators and barriers to their implementation, and any areas for further research. Findings and discussion The synthesis incorporated 45 publications describing 36 separate approaches to integrated care, along with further information from the advisory group. Most service models were multicomponent programmes incorporating two or more of the nine factors: (1) information sharing systems; (2) shared protocols; (3) joint funding/commissioning; (4) colocated services; (5) multidisciplinary teams; (6) liaison services; (7) navigators; (8) research; and (9) reduction of stigma. Few of the identified examples were described in detail and fewer still were evaluated, raising questions about the replicability and generalisability of much of the existing evidence. However, some common themes did emerge from the evidence. Efforts to improve the physical health care of people with SMI should empower people (staff and service users) and help remove everyday barriers to delivering and accessing integrated care. In particular, there is a need for improved communication between professionals and better information technology to support them, greater clarity about who is responsible and accountable for physical health care, and awareness of the effects of stigmatisation on the wider culture and environment in which services are delivered. Limitations and future work The literature identified in the rapid review was limited in volume and often lacked the depth of description necessary to acquire new insights. All members of our advisory group were based in England, so this report has limited information on the NHS contexts specific to Scotland, Wales and Northern Ireland. A conventional systematic review of this topic would not appear to be appropriate in the immediate future, although a more interpretivist approach to exploring this literature might be feasible. Wherever possible, future evaluations should involve service users and be clear about which outcomes, facilitators and barriers are likely to be context-specific and which might be generalisable