The need of tax harmonization within the wealth taxation in the European Union

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by Hugo Flores da Silva, Assistant Professor at Law School of UMinho


1. Introduction and wealth taxation characterization

Though widely used in the European Union, the wealth taxes account for a relatively small part of the EU Member States’ tax revenue, when compared with the main sources of revenue[i]. At the same time, the political debate and the scientific research developed in the field of wealth taxation is very incipient, when compared to another taxation bases[ii]. Not even the fact that this kind of taxation constitutes one of the oldest ways employed by the states to obtain revenue was able to counter the identified trend[iii].

However, in the current time of fiscal consolidation and macroeconomic adjustment, taxation of wealth is gaining momentum. The lack of alternatives capable of generating an increase in tax revenue within the income and consumption taxation[iv], the growing interest in the fairness and redistributions aspects of the tax system[v] and the need to adjust the tax system to make it more growth friendly[vi], can be pointed out as the main reasons for the recent academic and political debate on wealth taxation.

When we talk about wealth taxation we’re referring to a very complex reality, capable of reunite a very large group of different taxes[vii]. Although there are many types of wealth taxes, and with very different characterization between them, we consider that they can be grouped into two major categories[viii]: taxes on wealth transfers; and taxes on wealth itself. Inside these two main categories it is possible to identify a wide variety of distinct taxes.

The taxes on wealth transfers usually assume the following characterization[ix]: (i) taxes on onerous transfers – as the onerous movable transfers are subject to VAT, in this subcategory we include the taxes levied on onerous immovable transfers[x]; (ii) and taxes on gratuitous transfers – in this subcategory we include the inheritance and gift taxation[xi]. The taxes on wealth itself can be classified as follows[xii]: (i) taxes levied on the holding or ownership of specific assets – usually immovable property[xiii]; and (ii) taxes levied on the taxpayer’s aggregate net-wealth[xiv].
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Is Europe alone?

by João Alexandre Guimarães, Erasmus student at UMinho

After the US Election and confirmation of Donald Trump as president, the current President Barack Obama visited Europe and raised an issue … Is Europe alone?

In an interview, the EU Commission President Jean-Claude Juncker, said,

“Trump has, among other things, praised Vladimir Putin, questioned the principle of NATO, and suggested creating a database of Muslims in America.[…] We will need to teach the president-elect what Europe is and how it works,’ he continued, adding that Americans usually had no interest in Europe. […] I think we will waste two years before Mr Trump tours the world he does not know”, via Metro.

In Berlin and after a meeting with Chancellor Angela Merkel, current President Barack Obama recalled the priorities of his eight-year term, saying he hoped that his successor, Donald Trump, would not call into question projects such as the transatlantic free trade agreement or commitments to NATO and the Paris climate deal.

‘‘The committement of the United States to Europe is enduring and it is rooted in the values that we share. The values that Angela just mentioned. Our commitment to democracy, our commitment to the rule of law, our commitment to the dignity of all people. In our own countries and around the world our alliance with our NATO partners has been a cornerstone of US foreign policy for nearly 70 years, in good times and bad, and through presidents of both parties, because the United States has a fundamental interest in Europe’s stability and security,” he said, via Euronews.

Mark Leonard told the Social Europe that “this will be a tough agenda to adopt – not least because Europe is facing its own brand of populist nationalism. France’s far-right National Front leader, Marine Le Pen, was among the first to congratulate Trump on his victory, and Trump has said that he would put the UK at the front of the queue after Brexit. But even Europe’s most Trump-like leaders will find it harder to defend their national interest if they try to go it alone. To survive in Trump’s world, they should try to make Europe great again.”

EU Citizenship and Protection of Social Rights in the Court of Justice case-law

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by Cinzia Peraro, PhD student in European Union Law at the University of Verona

1. Introduction

This post aims at analysing the fundamental freedom of movement of workers and the protection of social rights in light of the recent EU Court of Justice case-law. The arising question is whether fundamental social rights may assume the same hierarchical level as general principles when a balancing test is exercised within the assessment of compatibility of national measures with EU law.

The definition of EU citizenship and the codification of rights granted to EU citizens are covered by the Treaties, namely by Article 9 TEU, Article 18 ff. TFEU and Chapter V of the EU Charter of Fundamental Rights. EU citizens can freely move across the Union in order to work or look for a job or establish their place of work in one Member State different from the one of origin, where they can enjoy the rights granted by the EU. Indeed, EU citizenship creates rights upon EU citizens and therefore could be defined as a “comunidade de direitos”[i].

Nowadays, the free movement of citizens became a core issue within the debates on present threats and challenges that the EU is facing, amongst which the EU immigration policy that is not only linked to the free movement of persons, but also to the underlying process of integration. In general, a more positive approach should be welcomed when addressing current issues.

2. Free movement of workers

Originally, the four fundamental freedoms were established with the aim of increasing and developing the European internal market and workers were granted rights abroad. The Union offered workers the possibility to move across Member States in order to provide their services or capabilities or establish their place of work. Then, the personal dimension was considered and individual rights were recognised, such as the right to family reunification. Thus, the free movement of workers should not be seen in macroeconomic terms, that is to say linked to the development of the internal market, but rather as a personal freedom to choose the country in which citizens want to work.[ii]

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Trump won, and what now for Europe?

by João Alexandre Guimarães, Erasmus student at UMinho

Today, 09/11/2016, we discovered that Republican Donald Trump won the American Election for President. But what does this influence in the European Union?

Deutsche Welle, on its website, has stated that Europeans have had rather disappointing experiences with American presidents. That’s just as true for the relationship with Republican George W. Bush as it is for the one with Democrat Barack Obama.

Erica Chenoweth, an expert on international security policy at the University of Denver, said to DW, “Europe should occupy the top spot on the list of priorities for the next president, because it’s about the most important strategic alliance the United States has”.

Mark Stone, from Sky News, talked to Jeremy Shapiro, the research director at the European Council on Foreign Relations, who stated:

“European governments have a strange degree of confidence that although they certainly don’t want a Trump presidency, they can manage it, because he has said a lot of crazy things on the campaign trail but he probably hasn’t meant most of them and probably won’t be able to implement the rest because of the checks and balances and advisers”, via SkyNews.

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Brexit is going to happen, but…

by João Alexandre Guimarães, Erasmus student at UMinho

The New York Times says the British government’s plan for leaving the European Union was thrown into uncertainty on Thursday after the High Court ruled that Parliament must give its approval before the process can begin. “The court’s decision seemed likely to slow — but not halt — the British withdrawal from the bloc, a step approved by nearly 52 percent of voters in a June referendum. Nevertheless, the court’s decision was a significant blow to Prime Minister Theresa May“.

She had planned to begin the legal steps for leaving the European Union by the end of March, and to prepare for the negotiations over Britain’s exit mostly behind closed doors. If the court’s ruling is upheld — the government immediately vowed to appeal — that plan would be thrown into disarray, analysts said.

On CNN (also here), Jane Marrick says, this does not have to expose Britain’s detailed negotiating position with Brussels, but it should allow our democratically elected representatives to scrutinize the broad terms. It will also give the 48% who voted Remain — 16 million people — a voice that under the government’s plans they are currently denied.

Eleanor Garnier, from BBC, said this decision has huge implications, not just on the timing of Brexit but on the terms of Brexit. That’s because it’s given the initiative to those on the Remain side in the House of Commons who, it’s now likely, will argue Article 50 can only be triggered when Parliament is ready and that could mean when they’re happy with the terms of any future deal. Of course, it will be immensely difficult to satisfy and get agreement from all those MPs who voted to remain. Could an early general election be on the cards after all? , via BBC.

Editorial of November 2016

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by Alessandra Silveira, Editor
and Sophie Perez Fernandes, Junior Editor

Unveiling the meaning of freedom of religion in the workplace

Two preliminary proceedings are currently pending before the Court of Justice of the European Union (ECJ) concerning the question of religious expression at work. In both cases, Achbita (C-157/15), originated in Belgium, and Bougnaoui (C-188/15), originated in France, the ECJ is called upon to rule on a highly sensitive issue – the wearing of Islamic headscarves (and not the full veil) in the workplace. The questions are fundamentally the following: is a private employer allowed to prohibit a female employee of Muslim faith from wearing a headscarf in the workplace?; is the dismissal of an employee who refuses to comply with such rules restricting the wearing of religious symbols at work unlawful?

It is the first time that the ECJ is called upon to address such questions. In the meantime, both AG Kokott (in Achbita) and AG Sharpston (in Bougnaoui) have rendered their opinions. The issues raised in both cases require the interpretation of the concept of ‘discrimination on the grounds of religion or belief’ within the meaning of the Anti-Discrimination Directive – the Directive 2000/78[i]. Both Advocates General concluded that a ban, such as those at issue in the main proceedings, could be regarded as indirect discrimination: the rules in question, although apparently neutral, were likely to put individuals of certain religions or beliefs at a particular disadvantage by comparison with other employees. Such discrimination may nevertheless be permitted if i) objectively justified by a legitimate aim, such as the interest of the employer’s business to enforce a policy of religious and ideological neutrality, and ii) so far as the principle of proportionality is observed (Article 2/2/b of Directive 2000/78).

However, the Advocates General disagree as to whether such a ban could be found as constituting direct discrimination (Article 2/2/a of Directive 2000/78). According to AG Kokott, a ban such as that at issue in Achbita could not be regarded as direct discrimination based on religion: a company rule prohibiting the wearing of visible signs of religious, political or philosophical beliefs, only creates a difference of treatment between employees who wish to give active expression to a particular belief and their colleagues who do not feel the same need. Thus, Ms Achbita had not been treated less favourably than another person on account of religion directly and specifically. On the contrary, AG Sharpston firstly concluded that Ms Bougnaoui’s dismissal amounted to direct discrimination against her on the basis of her religion as the right to manifest one’s religion is to be understood as an intrinsic part of the right to freedom of religion enshrined in both Article 9 of the European Convention of Human Rights (ECHR) and Article 10 of the Charter of Fundamental Rights of the European Union (CFREU). The distinction between direct and indirect discrimination is relevant as their possible justifications are different. In her analysis, AG Sharpston concluded that neither Article 4(1) of Directive 2000/78, nor any of the other derogations from the prohibition of direct discrimination on grounds of religion which that directive lays down, applied.

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