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What are the most common problems of cross-border inheritances and donations and how can the OECD and the EU most effectively address them? In his doctoral thesis, Dr. Dafnomilis has researched this topic and puts forward solutions to the problems under the current international and EU law mechanisms. The conclusions of his doctoral thesis are included in this NLF-W article. In Dr. Dafnomilis’s view, it is time for solutions to the problems that should in no case be neglected by international organisations, policymakers, legislators, tax professionals and academia.
NLF-W artikel
1. Introduction
In May 2021, the Organisation for Economic Cooperation and Development (OECD), in its report ‘Inheritance Taxation in OECD countries’ (hereinafter: the OECD report), exerted the importance of death and gift taxes in raising revenues, addressing inequalities and improving efficiency. The OECD report focused on the design of death and gift taxes and suggested that there is a good case for making greater use of well-designed inheritance and gift taxation, based on equity, efficiency and administrative considerations. Three weeks after the publication of the report – ironically enough – I defended my doctoral thesis entitled ‘Taxation of Cross-border Inheritances and Donations: Suggestions For Improvement’. In my doctoral thesis, I took the nature and elements (i.e., the design) of death and gift taxes as a given and thus focused on the problems of death and gift taxation in a cross-border setting and explored possible solutions to them based on the current mechanisms available at the OECD and the EU levels.
One year after the defence of my doctoral thesis I concluded that cross-border death and gift taxation remains a neglected area of law. The meagre percentage of total tax state revenue sourced from death and gift taxes, the increasing interest of states and international organisations in cross-border corporate income tax issues and the abolition of death tax laws by some states in the last twenty years may explain – to a certain extent – the modest interest of states and international organisations in providing solutions to the problems of cross-border death and gift taxation. This status quo may not necessarily be a burden from the perspective of a state, but it certainly poses problems for individuals who inherit a cross-border inheritance. Consider, for instance, that such an inheritance may be subject to double or even multiple taxation, or may be taxed more heavily due to its cross-border element. Given, therefore, the limited progress that has been made towards addressing the problems of cross-border death and gift taxation, I researched these problems. In my doctoral thesis I put forward separate and holistic solutions to the identified problems based on the available mechanisms at the OECD and the EU level. ‘Separate solution’ means a solution that deals with (aspects of) only one problem. It is distinguished from a ‘holistic solution’, which means a solution that deals with all problems of cross-border death and gift taxation together.
