Limits to Tax Planning

S. 469 1. Introduction

This paper analyses the principles flowing from EU primary law regarding the application of anti-abuse rules from an EU standpoint in relation to third countries in the area of direct taxation.

More specifically, Section 2 examines some relevant definitions that will help the reader to understand the following topics of this document. In Section 3, after illustrating some facts and preliminary questions, the author explains the importance of the free movement of capital (hereafter: “FMC”) both from a theoretical and a practical viewpoint by focusing on selected critical points discussed in certain relevant judgments of the European Court of Justice (hereafter: “ECJ”). Subsequently, Section 4 evaluates the two bilateral withholding tax agreements (hereafter: “Rubik” agreements) concluded between Switzerland and the United Kingdom, and Switzerland and Austria focusing specifically on the anti-abuse rules in an attempt to discover whether these agreements are in conformity with EU law. Lastly, Section 5 provides conclusions and recommendations on the previously covered points.

2. Definitions

2.1. Anti-abuse Provisions in the Area of Direct Taxation

The notion of “anti-ab...