Cross–border direct tax issues of investment funds from the perspective of European law

Abstract: This article addresses the issue of discriminatory taxation of investments through investment funds. In particular, the article seeks to demonstrate that national legislations of Member States,while trying to grant neutral treatment to such investments as compared to direct investments, create sometimes obstacles to their internationalization. Furthermore, it tries to find solutions in the ECJ Case Law (with a special emphasis on Orange Smallcap) that might help mitigating or solving such obstacles. The author analyzes several scenarios where he tries to interact EC Law, double tax treaties and domestic law. To achieve that purpose, the author goes through several scenarios where investment funds, investors and investments are in different Member States or in third states and tries to detect restrictions or discriminations in both the source and home State, giving special emphasis to the comparability tests and to possible justifications.

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