Part 1 - AL-Tax

Chapter 95. It is worth noting, however, that Sørensen’s (2000, 2001) simulations showed that tax coordinationin the EU would lead to a significant welfare improvement.6. These burdens can indeed discourage groups to restructure even if this restructuring couldguarantee considerable improvement in terms of efficiency.7. Much research is devoted to the policy reasons underlying corporate taxation and to itsalternatives – see, for instance, Bird (2002) and Mintz (1995).8. One of the main areas of comparative legal studies is the determination of families, namely agroup of countries forming a homogeneous area in respect to regulatory issues. Mattei (1997)provides helpful details on this topic.9. Notice that EU tax models consist of various structural elements: Each element serves to solve aspecific regulatory problem, while all elements combined together can solve the tax problem ofthe model implemented. For example, the structural elements of each of the various models fortax treatment of corporate distributions are: (i) The definition of the participating and participated(or distributing) entity; (ii) The notion and the requirement of dividends; (iii) The amountof relief (exemption, credit, or modified corporate taxation). For a comparative analysis of theseelements, see Garbarino (2006).10. A good example of reduced taxation is provided by Germany’s split-rate system, according towhich, until 2000, retained profits were taxed at 40%, whereas dividends were taxed at 30%.This system was abandoned in 2001.11. Tax groups usually have no minimum period of existence, though in most cases tax benefits areenjoyed only if the necessary holding was achieved in the previous tax year.12. This third level of convergence/divergence of corporate tax mechanisms shows that comparativeanalysis is meaningful only when aimed at finding, from an evolutionary approach, which elementsof a given corporate tax mechanism have a common origin with those of another country (circulationof models) and which elements have a common function (domestic evolution of mechanisms).13. A variation of EU inter-system transplantation occurs when an element of a tax mechanism, onceimported by a country, subsequently develops a new function in the tax system of destination.14. For example, the effective rule of asset dilution ratio can be implemented in a given countrywithout adopting a fixed ratio, but adopting an administrative guideline.15. Competition among institutional alternatives is analyzed by North (1990), Komesar (1994), andPosner (1996). On competition among legal rules, further details can be found in Mattei andPulitini (1991), and Mattei (1997). Finally, the emergence of rules is dealt with by Ullmann-Margalit (1977) and Axelrod (1984).16. In order to prevent revenue losses, none of these countries decided to extend full imputation tononresident shareholders.17. For example, in certain cases, deduction is limited by an explicit statutory ratio, while in othercases ad hoc guidelines determine whether interest is related to exempted income and thereforenot deductible.18. As shown in the Commission Staff Working Document, SEC (2005) 1785, the minimum participationthresholds are: Austria 50%, Cyprus 75%, Denmark 100%, Germany 50%, Finland 90%,France 95%, Ireland 75%, Italy 50%, Latvia 90%, Luxembourg 95%, Malta 51%, Netherlands95%, Poland 95%, Portugal 90%, Slovenia 90%, Spain 75%, Sweden 90%, UK 75%.19. It is not unlikely that trans-border tax consolidation will be implemented after the ECJ’s rulingon Case C-446/03, regarding Marks & Spencer. Indeed, in December 2005, the Court held that235