ABSTRACT
Cross-border payments for philanthropic purposes are subject to various tax obstacles, which could hinder their development. Very often, states will treat resident and non-resident philanthropic entities differently. As a consequence, charitable deductions could be allowed domestically but refused in a cross-border context. In addition, philanthropic cross-border payments may face adverse multiple tax consequences for income, inheritance or gift tax purposes. In the EU, the case law of the EU Court of Justice has, however, introduced limits to the potential discriminations caused by domestic taxation rules. This chapter suggests going further and using the various double taxation treaties (DTTs) network in order to avoid or alleviate the potential multiple tax consequences of cross-border charitable payments. Based on the examples of some rare existing DTTs, the author suggests, under some conditions, new specific clauses of DTTs, notably a rule for residence, exemption and deduction, for cross-border philanthropy. Moreover, this chapter recommends developing a broader discrimination clause, which could solve many of the existing issues, as the case law of the EUCJ has demonstrated. Finally, in parallel to the existing DTTs network, a multilateral instrument could serve as a tool to achieve a more global implementation of this proposal.
