International commercial tax / Peter Harris, David Oliver.
2010
K4542 .H375 2010 (Map It)
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Details
Author
Title
International commercial tax / Peter Harris, David Oliver.
Published
Cambridge ; New York : Cambridge University Press, 2010.
Call Number
K4542 .H375 2010
ISBN
9780521853118
0521853117
9780511776625 (e-book)
0511776624 (e-book)
0521853117
9780511776625 (e-book)
0511776624 (e-book)
Description
xxxvi, 483 pages : illustrations ; 24 cm.
System Control No.
(OCoLC)496958756
Summary
"Inspired by a postgraduate course the authors have jointly taught at the University of Cambridge since 2001, Peter Harris and David Oliver use their divergent backgrounds (academia and tax practice) to build a conceptual framework that not only makes the tax treatment of complex commercial transactions understandable and accessible, but also challenges the current orthodoxy of international tax norms. Designed specifically for postgraduate students and junior practitioners, it challenges the reader to think about tax issues conceptually and holistically, while illustrating the structure with practical examples. Senior tax practitioners and academics will also find it useful as a means of refreshing their understanding of the basics and the conceptual framework will challenge them to think more deeply about tax issues"-- Provided by publisher.
Bibliography, etc. Note
Includes bibliographical references (pages 470-476) and index.
Series
Record Appears in
Added Author
Table of Contents
Preface
xii
List of abbreviations
xiii
Table of cases
xiv
Table of statutes
xxiii
Table of treaties
xxxi
Introduction
1
1.
Fundamentals and sources of international tax law
8
1.1.
Tax fundamentals
8
1.2.
Sources of international tax law and their interrelationship
14
1.2.1.
Domestic law
14
1.2.2.
Tax treaties
16
What are they and where did they come from?
16
How tax treaties take effect in domestic law
20
Can a treaty create or increase tax?
24
1.2.3.
EU Law
25
FEU Treaty
25
Directives
26
1.2.4.
Other sources
27
GATT and the WTO
27
European Convention on Human Rights
28
1.3.
Approaches to interpretation of material
28
1.3.1.
Domestic law
29
1.3.2.
Treaty interpretation
30
Vienna Convention
31
OECD Commentaries
34
Which Commentary?
37
Dispute resolution
38
1.3.3.
Jurisprudence of the ECJ
38
2.
The jurisdiction to tax
43
2.1.
Forms of economic allegiance
43
2.1.1.
The person
46
2.1.1.1.
Who is a person: the tax subject
48
Domestic characterisation of entities
48
Meaning of 'person' in the OECD Model
54
2.1.1.2.
Residence as a connecting factor
57
Domestic law
57
'Residence' under the OECD Model
62
2.1.1.3.
Beneficiaries of EU Law
68
2.1.2.
The activities
71
2.1.2.1.
Characterising income producing activities
71
Domestic characterisation
71
OECD Model characterisation
74
2.1.2.2.
Locating the activity
76
Domestic law
76
Assignment of taxing rights under the OECD Model
79
2.1.2.3.
Activities covered by EU Law
80
Fundamental freedoms
80
Directives
85
2.2.
Divided allegiance: the problem of double taxation
86
2.2.1.
Principles
88
Tripartite relationship
88
Economic considerations
89
Cross-border restrictions
91
OECD Model
91
EU Law
95
Interstate relationship
103
Inter-nation equity
103
Harmful tax competition
105
EU Law considerations
108
2.2.2.
Methods for relief
111
Double tax relief
112
Interstate relationship
114
3.
Source country taxation
118
3.1.
The recipient/schedular approach
119
3.1.1.
Other income
121
3.1.2.
Income from immovable property
123
Immovable property
123
Income from immovable property
126
EU Law
128
3.1.3.
Business profits
129
3.1.3.1.
Enterprise of a contracting state
130
3.1.3.2.
Subsidiaries: exclusive taxation
133
3.1.3.3.
Permanent establishments: shared taxation
135
Permanent establishment threshold
136
Physical presence
137
General test
137
Building sites
142
Express exclusions
143
Personal presence
144
Agency permanent establishment
144
Independent agent exception
148
Services PE
149
Position of associated corporations
150
EU Law
151
Attribution of profits: separate enterprise approach
153
Delineating activities
155
Calculating PE profits
158
Real transactions
159
Intra-enterprise dealings
162
3.1.3.4.
Discrimination in taxation of business profits
168
OECD Model
168
Permanent establishments
168
Subsidiaries
171
EU Law
176
3.1.4.
Dividends, interest and royalties
180
3.1.4.1.
Dividends
181
OECD Model
181
Scope of Article 10
181
Limited source country taxation
182
Portfolio investors
182
Direct investors
185
Dividends and PEs
186
EU Law
190
Parent-Subsidiary Directive
190
Fundamental freedoms
193
3.1.4.2.
Interest
198
OECD Model
198
Scope of Article 11
198
Limited source country taxation
198
Interest and PEs
200
EU Law
201
Directives
201
Fundamental freedoms
202
3.1.4.3.
Royalties
205
OECD Model
205
EU Law
206
3.1.5.
Capital gains
207
OECD Model
207
EU Law
211
3.1.6.
Income from employment and independent personal services
211
3.1.6.1.
Employment
212
OECD Model
212
Employment
213
Salaries, etc.
217
Exercised in
218
Non-resident employers
218
EU Law
219
3.1.6.2.
Independent personal services
220
OECD Model
220
EU Law
222
3.2.
The payer/deductions
223
OECD Model
223
EU Law
225
3.3.
Quantification and characterisation issues
227
3.3.1.
Quantification: transfer pricing between associates
228
3.3.1.1.
Identifying associates
230
3.3.1.2.
Independent enterprise approach
235
Arm's length pricing
236
Problem areas: services and intellectual property
239
Administrative matters
240
Special PE issues
241
3.3.1.3.
Formulary apportionment
242
3.3.1.4.
EU Law
243
Fundamental freedoms
243
Common consolidated corporate tax base
245
3.3.2.
Characterisation: focus on dividends, interest and royalties
246
3.3.2.1.
Defining the boundaries
246
Dividends
247
Interest
248
Royalties
250
3.3.2.2.
Thin capitalisation
252
Domestic rules
253
OECD Model
256
EU Law
259
3.3.3.
Dual characterisation: reconciliation rules
259
OECD Model
259
EU Law
260
4.
Residence country taxation
264
4.1.
Foreign tax relief
265
4.1.1.
Methods
265
4.1.1.1.
Domestic law: unilateral relief
265
Deduction
266
Exemption
267
Credit
269
4.1.1.2.
OECD Model
275
Exemption
276
Credit
278
4.1.1.3.
EU Law
280
4.1.2.
Problems with corporations
282
4.1.2.1.
Economic double taxation
283
Domestic law: unilateral relief
284
Portfolio investors
284
Direct investors
285
OECD Model
291
EU Law
291
Parent-Subsidiary Directive
291
Fundamental freedoms
293
4.1.2.2.
Controlled foreign corporations
296
Domestic law
299
OECD Model
303
EU Law
308
4.2.
Expenses/losses
312
4.2.1.
Allocation of expenses between foreign and domestic income
313
Generally
313
EU Law
318
4.2.2.
Foreign loss/domestic income
322
Generally
322
EU Law
324
4.2.3.
Foreign income/domestic loss
327
Generally
327
EU Law
330
4.2.4.
Group relief
333
Generally
333
EU Law
334
5.
The limited scope of treaties
343
5.1.
Mismatches between source and residence countries
345
5.1.1.
Allocation of payment
346
5.1.2.
Quantification
353
5.1.3.
Timing of payment
358
5.1.4.
Characterisation of payment
362
5.2.
Beyond the bilateral
368
5.2.1.
Mismatch of source: PEs and third countries
370
5.2.1.1.
Payments received by PEs
372
Generally
372
EU Law
376
5.2.1.2.
Payments made by PEs
378
Generally
378
EU Law
381
5.2.2.
Mismatch of residence
382
5.2.2.1.
Taxation of the person
382
Generally
382
EU Law
384
5.2.2.2.
Payments made by the person: dual source
386
Generally
386
EU Law
388
5.2.3.
Intermediaries: re-sourcing and other re-characterisation
388
5.2.3.1.
Intermediate country
389
PE
390
Subsidiary
391
Access to treaty network: treaty shopping
391
Access to lower corporate tax
393
5.2.3.2.
Source country taxation
394
US Model: limitation of benefits
395
OECD Model: beneficial owner and conduit companies
397
EU Law: most favoured nation and limitation of benefits
403
5.2.3.3.
Residence country taxation
407
Foreign tax relief: mixers
407
Intermediary retention: CFC rules
410
EU Law
411
6.
Changes of source and residence
416
6.1.
Changes of source jurisdiction
418
6.1.1.
Creation of source
418
Transfer of assets to PE
418
Transfer of assets to subsidiary
421
6.1.2.
Termination of source
422
Transfer of assets from a PE
423
Transfer of assets from a subsidiary
424
6.1.3.
Transfer of ownership of source
426
Transfer of a PE
426
Transfer of a subsidiary
428
6.1.4.
Variation of form of source
430
6.1.4.1.
Conversions
430
PE into subsidiary
431
Subsidiary into PE
433
6.1.4.2.
Mergers
437
Assets mergers
438
Corporate mergers
440
6.1.4.3.
Divisions
443
Assets divisions
444
Corporate divisions
446
6.2.
Changes of residence jurisdiction
448
6.2.1.
Commencing residence
448
6.2.2.
Cessation of residence
449
7.
Bilateral administrative issues
452
7.1.
Exchange of information
453
7.1.1.
OECD Model
454
7.1.2.
Information exchange agreements
455
7.1.3.
EU Law
456
7.2.
Dispute resolution
457
7.2.1.
OECD mutual agreement procedure
458
7.2.2.
EU Arbitration Convention
462
7.3.
Assistance in collection of tax
464
7.3.1.
OECD Model
465
7.3.2.
Assistance in collection agreements
466
7.3.3.
EU Law
466
Conclusion
467
References
470
Index
477