2013 Mannheim Corporate Tax Day – Current Fields of Action in the Area of Cross-Border Tax Planning with Corporations

Renowned speakers from the areas of academia, tax advisory, business, and tax administration addressed current issues of national and international company taxation at the annual Mannheim Corporate Tax Day. The 2013 Corporate Tax Day on June 20, 2013, was dedicated to cross-border tax planning with corporations.

Initiator Prof. Dr. Christoph Spengel (University of Mannheim und Research Associate at ZEW) welcomed some 130 participants to this year’s Mannheim Corporate Tax Day. Prof. Dr. Jürgen Lüdicke (PwC Partner and Professor for International Tax Law at the University of Hamburg) presented the official German basis for negotiating Double Taxation Conventions, which was published in April. He gave a comprehensive overview of the differences compared to the OECD Model Convention as well as Germany’s position displayed in the Double Taxation Conventions negotiated in the last years. Prof. Lüdicke’s principally approved of the basis for negotiation, yet he demanded further elaboration of some aspects.

Prof. Dr. Dietmar Gosch, Chief Judge at the Federal Fiscal Court, addressed the topic "Mobility of Corporations and European Law". He discussed the implications of the verdict reached by the European Court of Justice in the "National Grid Indus" case on the taxation of hidden reserves if a corporation transfers its seat or effective place of management to another state of the European Union. Referring to the German legislator, he warned not to push the limits of what is permissible under EU law in the case of the National Grid Indus.

In keeping with the objective of the Mannheim Corporate Tax Day to promote the exchange of ideas among academia, tax administration, and practitioners, Dr. Bernd Niess (Head of Tax of Daimler Group) gave insights into the tax risk management of a German corporation with cross-border activities. He pointed out that tax planning, which had previously been of major importance, has lost significance, whereas the focus of his staff’s work has shifted towards the field of tax reporting, tax compliance and tax risk management. With regard to the current debate on tax planning of multinational corporations, he emphasised his company’s dedication to the "Good Citizenship" philosophy.

Workshops on Current Topics of Cross-Border Tax Planning with Corporations

The Mannheim Corporate Tax Day featured three afternoon workshops where the participants had the opportunity to discuss current issues with experts from tax advisory and the tax administration. Case studies from business practice highlighted current problem areas. In this regard, Thomas Rupp (Ministry of Finance of the Federal State of Baden-Württemberg) and Dr. Hartmut Winkler (Ernst & Young) shed light on current focal points of the German Foreign Transaction Tax Act. Dr. Winkler laid particular stress on the fact that in the past few years several EU member states have grown into the scope of the German Foreign Transaction Tax Act due to tax rate reductions. As a result, tax planning structures which are not abusive per se, also run the risk of falling within the scope of this tax.

Dr. Marius Helios (KPMG) and Dr. Carsten Meinert (Court of Finance Cologne) discussed questions relating to the financing and hedging of foreign participations. Debate among the participants was aroused by the speakers’ remarks on the accounting and tax treatment of evaluation units concerning underlying and hedging transaction in the context of protection against  currency risks.

Dr. Jens Schönfeld (Flick Gocke Schaumburg) and Andreas Benecke (German Ministry of Finance) addressed current developments in the taxation of inbound and outbound dividends. They shed some light on the "refund jumble" when it comes to the refunding of withholding taxes in the case of inbound-dividends, leading to legal uncertainty and unnecessarily high administrative expenses on the tax payers’ side.