Non-Collective Investment Funds Under BEPS Action 6 versus European Investment Fund Law
Werner Hasslehner (ed.), Investment Fund Taxation - Domestic Law, EU Law, and Double Taxation Treaties, EUCOTAX Series on European Taxation, Vol. 59 (2018), Ch. 9, pp. 181-196
38 Pages Posted: 7 Oct 2018
Date Written: September 13, 2018
Looking at collective investment schemes from a financial law perspective seems to stand in harsh contrast to the OECD’s perspective as expressed in the materials to BEPS Item 6. While financial lawyers emphasize the use of collective investment schemes – for manifold-financial relationships involving individuals and intermediaries – the word abuse can be often found in the BEPS Item 6 materials.
In contrast to this perspective, this chapter argues that the apparent divide between financial law and tax law does not exist, or at least that it is overstated, if financial law and tax law are properly applied. For this purpose, it will first outline the OECD’s approach to, and concerns with regard to, collective investment schemes, and then the financial law’s view on investment funds. Based on these fundamentals, it will be argued that the OECD’s position outlined in the BEPS Item 6 is suffering from definitional uncertainty; clarifying definitions, however, is far from easy.
Drawing on almost a hundred years of financial law, it will be argued that the tax law’s definitional uncertainty finds counterparts in financial law – and that it is advisable to employ the financial law’s solutions to this uncertainty for remedying the definitional vagueness in tax law to avoid unnecessary structural complexity. The next section demonstrates how this could work highlighting similarities and differences between the tax and financial law concept of ‘transparency’ in the context of collective investment schemes. The final section concludes.
Keywords: investment fund, BEPS, abuse, treaty entitlement, collective investment schemes, OECD, financial law, Base Erosion Profit Shifting, tax law, transparency
JEL Classification: K34, K22, K23
Suggested Citation: Suggested Citation