EU legal Person Double Taxation Laws and Structures

• Pages: 36-41

Vol. 10 No. 1

March, 2024

Academic Journal of Business, Administration

Law and Social Sciences

36

E-ISSN 2410-8693

ISSN 2410-3918

EU legal Person Double Taxation Laws and Structures

Dr. Henris Balliu

University of Tirana, Albania

Dr. Erisa Xhixho

University of Tirana, Albania

DOI: hps://doi.org/10.2478/ajbals-2024-0004

Abstract

The United Nations Conference and Trade Development (2000) explains that double taxation

has caused the occurrence of jurisdictional vacuums as well as conicts. This is because most

nations lack the necessary denitions of income classication. Thus leads to a person being

considered as a resident by two or more states by virtue of the divergent perspectives held by

the states involved. Such situations are common among people who maintain habitual abodes

and conduct professional activities in 2 or more nations. It is also the case for entities operating

in 2 or more nations (United Nations Conference on Trade and Development, 2000). Take,

for example, a rm may be incorporated under the laws of Germany, which will determine

residence by exploring the place of incorporation. In the same manner, the rm might be

eectively managed and controlled from France, which determines the residence by exploring

the place of management. The company would be required to meet the residence test in both

France and Germany. This will ergo lead to it being taxed as a resident.

Likewise, the existence of a jurisdictional vacuum allows two states to tax the same item of

income by their own denition if they think that the item arises from sources within their

territories. The United Nations Conference and Trade Development (2000) indicate that such

denitions cause mismatches in the timing of income recognition and accounting standards.

The occurrences are mostly classied as either economic or judicial.

The topic on how to avoid double taxation is explored by Radu (2012), who notes that unilateral

or international schemes can be put in place. The unilateral measures are often determined

by the choices of economic policy. For instance, a nation which exports capital will exempt

the foreign source income from their trade agreements so as to avoid being in a competitive

disadvantage in third-country markets. The capital importing nations will exclude interest

remunerating bank deposits for the non-residents in order to aract capital and improve on

foreign direct investment (Radu, 2012; Barbuta-Misu & Tudor, 2009). The unilateral restraint

measures are thus dictated by the restrictions which are imposed by a nation outside its own

territory.

Keywords: European Union, Legal Person, Double Taxation Laws, Structures.

Research Article

© 2024 Henris Balliu & Erisa Xhixho

This is an open access article licensed under the Creative Commons

Attribution-NonCommercial 4.0 International License

(https://creativecommons.org/licenses/by-nc/4.0/)