One minute with Christiana HJI Panayi, professor in tax law at Queen Mary University of London.
If you could make one change to a tax law or practice, what would it be?
It would be nice if the CJEU were to follow precedent a bit more closely in some areas of tax law, so that there is more coherent development of EU tax law. Similarly, it would have been preferable if the European Commission addressed the criticism over the divergence of approach between established principles of the CJEU and some of the provisions of the Anti-Tax Avoidance Directive I.
What’s your view on the European Commission state aid rulings?
The European Commission’s state aid investigations (and ultimately decisions) over tax rulings given by several member states to multinationals was a very bold move. The European Commission’s reasoning was certainly debatable in the initial decisions, as it was effectively argued that non-compliance with the arm’s length principle meant there was illegal state aid. However, the European Commission’s reasoning in the final decisions is much more nuanced and substantially improved. Therefore, if the CJEU agrees with the European Commission’s decisions, it will not be much of a stretch of the state aid law. If that indeed happens, it will precipitate initiatives to work towards EU guidelines on transfer pricing.
You were appointed an expert on the European Commission’s Joint Transfer Pricing Forum (JTPF) in 2015. What did you learn during your time there?
I am an alternate member representing the BEPS Monitoring Group in the JTPF. The principal member is Sol Picciotto. I have attended a few meetings of the JTPF so far. This committee is very well run and has done a lot of interesting work and studies on transfer pricing. What have I learnt? Possibly that the Commission is taking transfer pricing very seriously and would like to have EU transfer pricing rules at some stage. I am also a principal member in the Platform for Tax Good Governance and I have participated in meetings where the Commission presented important draft proposals that it had been working on before these proposals were released to the public in general (e.g. the EU list of non-cooperative jurisdictions, or proposals on the digital economy). I (and other members) were given the opportunity to make comments on such important proposals. It is always exciting to see a major proposal being fine-tuned as a result of comments or feedback!
How will Brexit affect tax policy – both for the UK and the EU?
It is difficult to predict the impact of Brexit on the UK tax system without knowing if there will be hard Brexit or soft Brexit. Regardless of the label given, much also depends on the actual obligations imposed on the UK and the extent to which it will have to follow EU tax law in the post-Brexit era. Will the UK be able to amend UK legislation that incorporated past Directives? Will the UK be obliged to adopt future case law of the Court of Justice? The fewer the EU constraints on the UK tax system, such as the state aid prohibition, the easier it will be to develop a flexible and competitive tax policy.
As for the development of EU tax policy, my view is that Brexit will accelerate the tax integration of the remaining member states, as the UK has always been one of the most influentially recalcitrant member states in this area! We are likely to see further harmonisation of the tax base and, possibly at some stage, of the tax rates.
Finally, you might not know this about me but…
I have three young children – a six year old girl, a four year old boy and a ten month old boy. Motherhood has taught me that sleep is overrated. It is more important to be able to multi-task and to be able to work whilst Peppa Pig or Thomas the Tank Engine are blasting on the TV!
One minute with Christiana HJI Panayi, professor in tax law at Queen Mary University of London.
If you could make one change to a tax law or practice, what would it be?
It would be nice if the CJEU were to follow precedent a bit more closely in some areas of tax law, so that there is more coherent development of EU tax law. Similarly, it would have been preferable if the European Commission addressed the criticism over the divergence of approach between established principles of the CJEU and some of the provisions of the Anti-Tax Avoidance Directive I.
What’s your view on the European Commission state aid rulings?
The European Commission’s state aid investigations (and ultimately decisions) over tax rulings given by several member states to multinationals was a very bold move. The European Commission’s reasoning was certainly debatable in the initial decisions, as it was effectively argued that non-compliance with the arm’s length principle meant there was illegal state aid. However, the European Commission’s reasoning in the final decisions is much more nuanced and substantially improved. Therefore, if the CJEU agrees with the European Commission’s decisions, it will not be much of a stretch of the state aid law. If that indeed happens, it will precipitate initiatives to work towards EU guidelines on transfer pricing.
You were appointed an expert on the European Commission’s Joint Transfer Pricing Forum (JTPF) in 2015. What did you learn during your time there?
I am an alternate member representing the BEPS Monitoring Group in the JTPF. The principal member is Sol Picciotto. I have attended a few meetings of the JTPF so far. This committee is very well run and has done a lot of interesting work and studies on transfer pricing. What have I learnt? Possibly that the Commission is taking transfer pricing very seriously and would like to have EU transfer pricing rules at some stage. I am also a principal member in the Platform for Tax Good Governance and I have participated in meetings where the Commission presented important draft proposals that it had been working on before these proposals were released to the public in general (e.g. the EU list of non-cooperative jurisdictions, or proposals on the digital economy). I (and other members) were given the opportunity to make comments on such important proposals. It is always exciting to see a major proposal being fine-tuned as a result of comments or feedback!
How will Brexit affect tax policy – both for the UK and the EU?
It is difficult to predict the impact of Brexit on the UK tax system without knowing if there will be hard Brexit or soft Brexit. Regardless of the label given, much also depends on the actual obligations imposed on the UK and the extent to which it will have to follow EU tax law in the post-Brexit era. Will the UK be able to amend UK legislation that incorporated past Directives? Will the UK be obliged to adopt future case law of the Court of Justice? The fewer the EU constraints on the UK tax system, such as the state aid prohibition, the easier it will be to develop a flexible and competitive tax policy.
As for the development of EU tax policy, my view is that Brexit will accelerate the tax integration of the remaining member states, as the UK has always been one of the most influentially recalcitrant member states in this area! We are likely to see further harmonisation of the tax base and, possibly at some stage, of the tax rates.
Finally, you might not know this about me but…
I have three young children – a six year old girl, a four year old boy and a ten month old boy. Motherhood has taught me that sleep is overrated. It is more important to be able to multi-task and to be able to work whilst Peppa Pig or Thomas the Tank Engine are blasting on the TV!
