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Browsing by Author "Mäenpää, Marie"

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  • Mäenpää, Marie (2023)
    Restrictions of the basic freedoms, which are in principle prohibited, can be justified by the aim to prevent tax avoidance under the rule-of-reason doctrine. Even in light of extensive case-law concerning the justification of preventing tax avoidance, the rules for the application of the doctrine are not exhaustively determined. Clarifying the subject is important both in light of the Member States' interest to protect tax revenue and prevent tax avoidance, and the taxpayers' interest to be able to exercise the basic freedoms without the undue burden of discriminatory tax treatment. This thesis examines the justification of preventing tax avoidance. The aim is to provide comprehensive description of the application of the justification through analyzing the CJEU's case-law. The thesis is limited to the field of direct taxation. This thesis concludes that a restriction of the basic freedoms can be accepted only when both the condition of a subjective aim to gain tax avoidance and the condition of an objective fictitiousness are fulfilled when assessed separately. The limitation to wholly artificial arrangements stems from the supremacy of the basic freedoms in relation to national tax law. An arrangement can be considered wholly artificial only if it does not concern genuine exercise of the basic freedoms, which is to be assessed based on objectively observable elements. This thesis claims that the choice of elements depends on the nature of the arrangements the restriction aims to prevent. The role of the arm's length principle in the assessment of a wholly artificial arrangement is examined, and this thesis concludes that in light of the recent judgement C-484/19 Lexel and previous case-law, it is well established that a transaction at arm's length cannot be considered wholly artificial. Further, this thesis examines possible limitations of this rule in light of the pending case C-585/22 and concludes that a restriction of the role of the arm's length principle is unlikely.