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2021 | OriginalPaper | Chapter

CJEU Court Cases: IP and Taxation

Author : Patrick Uwe Wittenstein

Published in: Intangibles in the World of Transfer Pricing

Publisher: Springer International Publishing

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Abstract

The Court of Justice of the EU (“CJEU”) has become a major standard setter in EU tax matters. Intangible property (“IP”) is often regarded as an important driver of today’s multinational firms, in particular with respect to their tax planning activities. The present analysis focuses therefore on court cases of the CJEU that deal with IP and taxation. Using CJEU’s database, this chapter identifies relevant case law and subject matters (such as denial of R&D tax benefits for activities in other EU Member States, exit taxation, and abusive practices) in the area of direct taxation and VAT, and examines whether there is a tendency in judgments of the CJEU with regard to IP and taxation. In his results, the author observes some deviating tendencies, depending on the subject matter. Overall, the CJEU case law on IP and taxation appears to have become consistent over time, but rather more restrictive from a taxpayer’s point of view.

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Footnotes
1
With the Treaty of Lisbon (came into force December 1, 2009) the EU renamed its judiciary the Court of Justice of the European Union (CJEU), the upper instance of which is the European Court of Justice (ECJ). In this study reference is made in a uniform way to the CJEU, including for earlier cases.
 
2
Terra/Wattel (2012).
 
3
Mang (2015).
 
4
Heckemeyer/Overesch (2017).
 
5
Fuest/Spengel/Finke/Heckemeyer/Nusser (2013); Ting (2014).
 
6
Martin Jiménez (2010); Schoen (2013); Schoen (2015).
 
7
van Dongen (2012); Luchena Mozo (2012); Hey (2014).
 
8
Bal/Offermans (2012).
 
9
Brokelind (2016).
 
10
The EU State aid rules disallow EU Member States from granting aid only to certain firms and thereby placing them in a more favorable position.
 
11
Originally Council Directive 90/435/EEC of July 23, 1990, replaced by Council Directive 2011/96/EU of November 30, 2011, as amended.
 
12
Council Directive 2003/49/EC of June 3, 2003, as amended.
 
13
Terra/Wattel (2012).
 
14
Terra/Wattel (2012).
 
15
Terra/Wattel (2012).
 
16
TFEU Article 267.
 
17
TFEU Article 258.
 
18
TFEU Article 259.
 
19
Terra/Wattel (2012).
 
20
Englmair (2016).
 
21
Hilling (2013).
 
22
Hilling (2013).
 
23
What is referred to as the “sixth Directive” constituted the basis for harmonization of VAT within the EU (Council Directive 77/388/EEC of May 17, 1977). This directive was subsequently replaced by what is called the “recast VAT Directive” (Council Directive 2006/112/EC of November 28, 2006, as amended) (Terra/Wattel 2012).
 
24
Terra/Wattel (2012).
 
25
de la Feria (2010).
 
26
de la Feria (2010).
 
27
Before making a court decision, one of Advocate Generals publishes, in certain cases, his opinion; to give further guidance to the judges (European e-Justice Portal 2016).
 
28
As stated in the introduction, a search for the joint terms “transfer pricing”, “intellectual property” and “valuation” did not yield any results when applying the limiting factors mentioned.
 
29
On December 20, 2017 (7 months after this research was performed) the CJEU issued in Hamamatsu a judgment on the valuation of goods for customs purposes and transfer pricing (CJEU 2017b).
 
30
Judgment of October 27, 2011. Tanoarch. C-504/10. EU:C:2011:707.
 
31
Judgment of December 17, 2015. WebMindLicenses. C-419/14, EU:C:2015:832.
 
32
The other VAT cases found comprise: Judgment of June 20, 2002. Commission v Germany. C-287/00. EU:C:2002:388; Judgment of October 27, 2005. Levob Verzekeringen. C-41/04. EU:C:2005:649; Judgment of October 7, 2010. Kronospan Mielec. C-222/09. EU:C:2010:593; Judgment of October 25, 2002. Daimler. C-318/11. EU:C:2012:666; Judgment of December 8, 2016. A and B. C-453/15. EU:C:2016:933.
 
33
Evers/Miller/Spengel (2015); Braeutigam/Spengel/Streif (2017).
 
34
Mang (2015); Gil García (2016).
 
35
Judgment of September 12, 2006. Cadbury Schweppes. C-196/04. EU:C:2006:544.
 
36
Schaper 2014).
 
37
Judgment of January 21, 2010. SGI. C-311/08. EU:C:2010:26.
 
38
Schoen (2013).
 
39
CJEU (1999).
 
40
CJEU (2005).
 
41
CJEU (2008).
 
42
CJEU (2011a).
 
43
For further details on more contemporary R&D tax incentives in Europe see Bal/Offermans (2012). Moreover, due to the OECD’s project on Base Erosion and Profit Shifting (BEPS). These IP boxes and patent boxes have to be amended to comply with the so-called nexus approach. For further details see Shi 2016).
 
44
Judgment of July 12, 2012. Commission v Spain. C-269/09. EU:C:2012:439.
 
45
Judgment of September 6, 2012. Commission v Portugal. C-38/10. EU:C:2012:521.
 
46
Judgment of July 18, 2013. Commission v Denmark. C-261/11. EU:C:2013:480.
 
47
Judgment of January 23, 2014. DMC. C-164/12. EU:C:2014:20.
 
48
Kokott (2011); Jääskinen (2015).
 
49
Kokott (2011).
 
50
CJEU (2011b).
 
51
In particular National Grid Indus has had further reaching implications for the migration of companies within the EU and this is not explained in full detail in this study. For further information on this see van den Broek/Meussen (2012).
 
52
Judgment of the Court of September 7, 2006. N. C-470/04. EU:C:2006:525.
 
53
van den Hurk/van den Broek/Korving (2013).
 
54
Jääskinen (2015).
 
55
Jääskinen (2015), paragraph 20.
 
56
Jääskinen (2015).
 
57
CJEU (2015a).
 
58
Deloitte (2015).
 
59
CJEU (2006).
 
60
CJEU (2006) paragraph 75.
 
61
CJEU (2006), paragraph 65.
 
62
Including cross-border situations involving subsidiaries in countries of the European Economic Area, for example those included in the German Foreign Tax Act § 8 (2).
 
63
Braeutigam/Spengel/Streif (2017).
 
64
Baker (2010).
 
65
CJEU (2010).
 
66
CJEU (2010), paragraph 44.
 
67
CJEU (2010).
 
68
CJEU (2010), paragraph 73.
 
69
Meussen (2010).
 
70
Baker (2010).
 
71
CJEU (2011c).
 
72
Judgment of May 22, 2008. Ampliscientifica and Amplifin. C-162/07 EU:C:2008:301.
 
73
Martin Jiménez (2010).
 
74
CJEU (2015b).
 
75
CJEU 2011c, 2015b).
 
76
However, the wording of CJEU jurisprudence on abuse and taxation is less uniform when considering other related case law (Martin Jiménez 2010).
 
77
Braeutigam/Spengel/Streif (2017).
 
78
CFE ECJ Task Force (2016).
 
79
Council Directive 2016/1164 of July 12, 2016, as amended.
 
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Metadata
Title
CJEU Court Cases: IP and Taxation
Author
Patrick Uwe Wittenstein
Copyright Year
2021
Publisher
Springer International Publishing
Book
Intangibles in the World of Transfer Pricing

Print ISBN: 978-3-319-73331-9

Electronic ISBN: 978-3-319-73332-6

Copyright Year: 2021

DOI
https://doi.org/10.1007/978-3-319-73332-6_42

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