bluuebunny/crossref_metadata_2025 huggingface dataset:
Luxembourgs Move towards IFRS: Income Tax Impact
Authors: Sergiel-Bhardwaj Anna
Published: February 2022

The end of 2010 brought significant accounting changes in Luxembourg, with the introduction on an optional basis of International Financial Reporting Standards (IFRS) for undertakings. While the accounting law has been brought up to speed with European standards, the draft law to adapt the relevant tax provisions accordingly was withdrawn from Parliament and, to date, has not been re-introduced. This article looks at the history of the proposed amendments and also tries to examine what this situation means for businesses. The issues addressed are the potential impact on the taxable basis of accounting under IFRS, classification issues in respect of financial instruments, and, finally, the availability of certain tax advantages.
The Impact of the UN and OECD Model Tax Conventions on Turkish Tax Treaties
Authors: Üzeltürk Hakan
Published: February 2022

Turkey is an appealing country for global investors. The economical importance of Turkey with the defragment of the geopolitical importance will gain deeper dimension and meaning. Since the outbreak of the global financial system crisis, the issue of tax cooperation between related parties has a priority on the international agenda. The Turkish tax regime is an important part of the economy since Turkey attaches a high priority to the encouragement of foreign investment and provides a variety of incentives. Turkey is a signatory to a tax treaty with many countries all over the world. Turkey's tax treaties generally follow the provisions of the Organization for Economic Co-operation and Development (OECD) Model Convention. This study intends to give vision all foreign investors about Turkish Double Taxation Treaties.
Tax Avoidance and Non-proportional Demergers
Authors: Cimino Filippo Alessandro
Published: February 2022

This article analyses the compatibility with European Union (EU) law of the anti-avoidance practice by Italian tax authorities in the field of non-proportional demergers. Based on the European Court of Justice (ECJ) case law and selected tax literature, the author concludes that such practice is incompatible with EU law and violates the obligation of tax authorities to comply with the principle of Union loyalty.
Applicability of Double Taxation Avoidance Agreements to Fiscally Transparent Entities: An Indian Perspective
Authors: Chaudhuri Tarumoy , Agarwal Anish
Published: February 2022

Being 'liable to taxation' is a prerequisite for being a resident (under most double taxation avoidance agreements (DTAAs)). Therefore, fiscally transparent entities (as they do not pay taxes) would not be residents and thus would not be entitled to treaty benefits. However, the Hon'ble Income Tax Appellate Tribunal, Mumbai Bench, has recently held that fiscally transparent entities would be eligible for treaty benefits.1 The same needs to be analysed in light of the judgments given by the Hon'ble Supreme Court of India and views of various nations around the globe.

This article considers the various scenarios that could pose problems in the interpretation of DTAA and its applicability to partnerships where different countries treat them differently. It also analyses the Indian position with regard to interpretation of DTAA, the reservations that it has taken against the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention on Income and on Capital (Condensed Version), 22 July 2010 (hereinafter 'OECD Commentary'), and the justifiability of the same.
(Re)shaping Fiscal State Aid: Selected Recent Cases and Their Impact
Authors: Luja Raymond H.C.
Published: February 2022

This contribution touches upon a number of recent state aid developments. It addresses EU limits to the tax authority's competence to conclude tax settlements and rulings and pays special attention to their role as creditors settling payment issues. Other points discussed are the need for investment fund regimes not to go beyond full transparency in order to stay outside of the state aid regime and the relation between state aid and other primary EU law. Moreover, the tax facilitation of takeovers and the use of cooperatives in tax planning will be addressed. Finally the limitations to state aid as an instrument to address harmful tax competition are to be briefly dealt with in light of the effects test introduced by the ECJ when dealing with analytical taxation of profits.
Arbitration Convention 90/436/EEC: Inapplicability in Case of Serious Penalties
Authors: Valente Piergiorgio
Published: February 2022

A tool for settling transfer pricing controversies is the EU Arbitration Convention No. 90/436/EEC. If a double taxation in transfer pricing occurs, the enterprise may submit its case to the competent authority of the state in which it resides, regardless of the remedies provided by domestic provisions. Where the claim is legitimate, the competent authority shall initiate a mutual agreement procedure (MAP) with the authority of the other state to settle the controversy. If no agreement is reached within two years, the controversy shall be submitted to an advisory Commission charged with the delivery of an opinion. The competent authority of a state shall not be obliged to initiate a MAP or set up an advisory Commission should the enterprise be liable to serious penalties.
The Tax Treatment of Corporate Losses: A Comparative Study
Authors: Stals K.P.E. , Post Dennis
Published: February 2022

The tax treatment of corporate losses is a hot topic in times of economic downturn for both taxpayers as well as governments. This article outlines the findings of a comparative study that the authors performed in this respect amongst 50 countries. More specifically, the authors draw conclusions on the terms for the carry back and carry forward of losses as well as the presence of change of ownership/activity legislation in the countries investigated. Furthermore, the authors highlight some of the most commonly seen loss refresher strategies that are available for taxpayers to avoid that losses can no longer be utilized. Finally, conclusions are drawn on the recently published OECD report regarding corporate loss utilization through aggressive tax planning.
Searching for the Uncertain Rationale Underlying the US Treasury's Anti-treaty Shopping Policy
Authors: Fleming J. Clifton
Published: February 2022

The US Treasury Department regards treaty shopping as an abuse of its bilateral income tax treaty network and has developed a model anti-treaty shopping article, which it insists on including in all of its treaties. The Treasury has explained that its position is based on the rationale that treaty-shopping inappropriately benefits residents of countries that have not 'paid' for treaty advantages by making reciprocal concessions to the United States and that successful treaty shopping lessens the incentive for other countries to enter into treaty negotiations with the United States. This article examines the exceptions to the US anti-treaty shopping article and finds that, because these exceptions are significantly inconsistent with the Treasury's announced anti-treaty shopping rationale, the Treasury's true rationale is uncertain and its anti-treaty shopping article is, in fact, vulnerable to substantial treaty shopping behaviour.
Personal Income Taxation in Portugal: Moving towards Tax Neutrality between Capital Gains and Dividends
Authors: Martins António
Published: February 2022

This article shows how the Portuguese tax reform of 1988 set up a non-neutral system for the taxation of dividends and capital gains. Capital gains had a much more generous treatment. The consequences of this lack of neutrality were immediately felt in two areas, with share buy-backs and the changing of legal status of firms coming to the forefront of individual tax planning. The system then enacted discriminated between holding periods for the same equity holders and also between gains realized by the sale of different types of equity instruments.

In 2010, faced with a desperate public finance situation, the government finally changed the taxation of capital gains, making it similar to the one applied to dividends. This modification eliminated some important tax loopholes and made the tax system fairer and more efficient.
The CCCTB Rules on Leaving a Group
Authors: van de Streek Jan
Published: February 2022

The consolidation system proposed in the draft of the CCCTB Directive puts relationships between Member States on edge. This is clearly apparent in the rules that apply when a company leaves a group. In this article the leaving rules are examined. Although the leaving rules are claimed to be 'tailor-made', their effects are just as rough as the allocation of the consolidated profit according to the apportionment formula. It remains very much a question as to whether there are sufficient advantages to balance this approach.
§ 50d (3) EStG  Entitlement to Tax Relief Available to Foreign Companies  Unofficial Translation of the Federal Ministry of Finance Circular Dated 24 January 2012 and Explanatory Note
Authors: Ränsch Ulrich
Published: February 2022

With reference to the results of the discussions with the representatives of the supreme tax authorities of the German Länder, the following applies to the application of § 50d (3) of the German Income Tax Act (EStG) as amended by the Act for the Implementation of the Tax Recovery Directive and for the Amendment of Tax Provisions (Gesetz zur Umsetzung der Beitreibungsrichtlinie sowie zur Änderung steuerlicher Vorschriften) of 7 December 2011, Federal Law Gazette 2011 Part I p. 2592:
The Dutch Extreme Default Risk Loan: A New Dimension in International Debt/Equity Mismatches
Authors: Wijtvliet Laurens W.D. , Ruijschop Michel
Published: February 2022

On 25 November 2011, the Dutch Supreme Court shaped the concept of a new kind of loan in a number of rulings. This so-called extreme default risk loan is a high risk loan that has both the marks of equity and debt. The Supreme Court ruled that such a loan must be regarded as a debt, and yet write-downs on these loans are not permitted. Furthermore the Court ruled that the interest stated in the loan agreement is to be ignored for tax purposes and must be replaced by the interest rate that would have been agreed upon had the loan been granted by a third party, but with a guarantee by the creditor. In this article we analyze the rulings and show that in a cross-border setting the fiscal treatment set out by the Supreme Court could lead to undesirable cross-border mismatches. We propose a number of potential solutions to this problem.
Controlled Foreign Company Regime in Turkey and its Valuation
Authors: Öz N. Semih
Published: February 2022

In 2006, a new Corporate Income Tax Law was introduced in Turkey. One of its aims is to fight against harmful tax competition and therefore it covers defensive measures such as controlled foreign company (CFC) and transfer pricing practices which are intended to prevent companies from leaving their foreign subsidiaries' incomeabroad. This article describes and analyses CFC practices initiated in Turkey. Rather than giving detailed information, the article gives the definition of CFC's and summarizes their general features in a comparative approach, taking other country applications into account, and gives a general framework of CFC legislation in Turkey.
Fifty Years of Subpart F Revisited In the Light of Modified Economic Conditions
Authors: Beck Diana , Kraft Gerhard
Published: February 2022

With the enactment of the subpart F rules in 1962, it was the major concern of the US legislator to construct a precisely fitting concept against tax haven deferral consistent with economic conditions of that time. However, the world economy went through enormous changes since the enactment of subpart F in 1962. Local incorporation matters little today and products and services may be divorced from a specific location. In addition, the check-the-box regulations revolutionized entity qualification. All these changes are not considered within the subpart F regulations.

These may be the main reasons why the following analysis shows a striking inefficiency of subpart F provisions based on data regarding the example of Bermuda, Switzerland and Germany. Thereby, Bermuda and Switzerland as well-governed low-tax countries were chosen as representatives of typical tax havens, whereas Germany was chosen because it is one of the biggest industrialized countries and among the United States' major trading partners.

Examined data substantiate alleged inefficiency of subpart F within surrounding economic conditions of the now globalized world. A major conclusion, therefore, is that the controlled foreign corporation (CFC) regime today has lost its original rationale and, thereby, most of its justification. Significant modifications and modernizations appear to be indispensable in order to adjust the CFC set of rules to the modern economic framework and to align it with the goal to curb tax haven deferral effectively.
Burdens of the Right of Establishment: On Fiscal Establishment Chains in the EU
Authors: Ronfeldt Thomas
Published: February 2022

This article is concerned with the differences between invoking EU law in connection with an establishment and subsequent establishment chains under company law and invoking EU law in connection with the same establishment chain's fiscal circumstances. It reveals crucial differences in taxable persons' opportunities to invoke EU law in order to protect an establishment chain with reference to tax law and the right of establishment, respectively. From a Danish context, this article will emphasize the general differences in EU law that occur in the application of the right of establishment.
Interaction between the Monist and the Dualist Tax Systems: A Cause (of Double Taxation) Less Obvious
Authors: Sachdeva Sachin
Published: February 2022

This article seeks to highlight the importance of international law to the realm of international taxation. The article, without, detailing and repeating the obvious and much-written aspects of this interaction and interplay such as the Vienna rules of interpretation, covers an aspect which may be not be apparently obvious to all international tax practitioners. This aspect is how, in certain situations, when tax systems of monist and dualist states interact, double taxation of income may ensue. Double taxation of this kind occurs if there is a mismatch between the performances, by the states, of the respective obligations assumed at the international plane in the form of a tax treaty. A mismatch will easily occur, both if a state does not, either intentionally or unintentionally, give effect to the treaty domestically or if a state, after having implemented the treaty internally, gives superseding effect to domestic tax law, thus overriding a pre-existing treaty. The answer to the question, whether and if to what extent, international obligations may be domesticated and not disturbed subsequently by a state depends on which of the two theories: monism or dualism, has been adopted by that state to define the relationship between its municipal law and international law. The present article concerns itself with examining how double taxation occurs under the first of these scenarios. A brief account of the monist and the dualist theories of international law together with three hypothetical cases, viz., 'permanent establishment case', ' dividend distribution case' and 'dual-resident case' has been included to facilitate better and clearer understanding of the interaction between monist and dualist tax systems and to exemplify the tax consequences of that interaction.
Interest Deduction and the CCCTB: A Walk in the Park for Tax Advisors?
Authors: de Groot I.M.
Published: February 2022

In this article, the author critically evaluates the interest deduction limitations included in the original proposal for a CCCTB Directive. The directive proposal is first briefly discussed, after which the interest deduction limitations are discussed in more detail. The author's conclusion is that the interest deduction limitations appear to lack effect. She presents her own proposal for - what she regards are - more effective interest deduction limitations that will allow the interest deduction to be properly managed.
The Tax Treatment of Losses under the Proposed Common Consolidated Corporate Tax Base Directive
Authors: Calleja Borg Jeanette
Published: February 2022

On 16 March 2011 the European Commission published its proposal for a Common Consolidated Corporate Tax Base directive (CCCTB). The CCCTB is a set of rules by which groups of companies that are tax resident in the European Union (EU) or EU-located branches of third-country companies would be able to submit a single consolidated European corporate tax return. This implies that the group operating within the EU would be able to offset the losses of group members against the profits of other group members in order to arrive at the consolidated tax base, even when the group members are residents of different EU Member States. This paper will discuss how losses are treated under the proposed CCCTB directive. The first section will deal with losses on entering the CCCTB regime; the second section will address losses during the CCCTB regime while the third section will deal with losses after exiting the CCCTB regime. In the final section the paper will be concluded with a conclusion.
Unjust Enrichment in European Union Tax Law: In Search of Balance between the Views of the Court of Justice, the General Principles of EU Law and the Constitutional Principles of EU Member States
Authors: Lasinski-Sulecki Krzysztof
Published: February 2022

As of today, the European Union has not developed a common system of rules applicable to the reimbursement of taxes levied contrary to EU law. Lack of legislative activities in this field is understandable. The EU does not wish to interfere with the procedural autonomy of its Member States.

The Court of Justice only requires the Member States to follow two basic principles when taxes levied contrary to EU law are reimbursed. The conditions of repayment of taxes levied contrary to EU law may not be less favourable than those relating to similar claims regarding national charges (principle of equivalence) and they may not be so framed as to render virtually impossible the exercise of rights conferred by EU law (principle of effectiveness).

The Court of Justice does not prevent a national legal system from disallowing the repayment of charges which have been unduly levied, where doing so would entail unjust enrichment of recipients. The author of this article analyses the content of the 'unjust enrichment' exception in the Court of Justice's case law, its current legal status and the position of this exception regarding the principles of equivalence and effectiveness.

The Court's approach towards 'unjust enrichment' is juxtaposed to its findings on the general principles of EU law. Emphasis is made on the primacy of EU law and the requirements of its effectiveness. The author tries to identify links between 'unjust enrichment' case law and the developing general principle of EU law - the prohibition of abuse.
A Proposal to Expand and Improve Article 6 of the EU Merger Directive
Authors: Boulogne G.F.
Published: February 2022

The European Court of Justice (ECJ's) judgment in A Oy (C-123/11) has created a rule for transferring losses cross-border, whereas the Merger Directive provides only for the takeover of losses in a domestic situation. This contribution contains a proposal for expanding and improving Article 6 of the Directive, not only to bridge the gap between what is possible under primary EU law and what is possible under secondary EU law, but also by providing solutions that are designed to attain the objectives of the Merger Directive as far as possible, irrespective of national law.
Legal Protection of the Taxpayer before the Montenegrin Ordinary Judiciary: Case Practice of the Supreme Court and the Constitutional Court
Authors: Vukcevic Ilija , Pešic Miodrag
Published: February 2022

The usual way to achieve the right to effective legal protection of the taxpayer is the tax (administrative) procedure. When the tax administration charges more {tax than is prescribed by the law or in situations when it does not have the right to do so, the reaction of the taxpayer is to challenge this action according to tax (administrative) legislation with the goal of having his/her money refunded. However, in addition to this primary right, in certain national legal systems there is the possibility of using other legal remedies for the refund of illegally collected money. In those legal systems the taxpayer can claim compensation of damages before the civil courts (ordinary judiciary). The use of this secondary legal remedy for the refunding of the taxpayer's illegally collected money from the Tax Office of Montenegro (hereinafter: the Tax Office) is not regulated by Montenegrin legislation. The subject of the article will be the analysis of this controversial issue in the light of two cases before the Supreme Court of Montenegro (hereinafter: the Supreme Court) and the Constitutional Court of Montenegro (hereinafter: the Constitutional Court) in which during 2011 and 2012 the Montenegrin judiciary for the first time faced this problem.
ECJ and Mutual Agreement Procedures
Authors: Lang Michael
Published: February 2022

The Mutual Agreement Procedure (Article 25 OECD Model Convention) is a rather helpful tool to sort out all kind of interpretation conflicts between two contracting states. If tax treaties are in an intra-Union setting replaced by a Directive and if the content of the OECD Model Convention is transformed in such a Directive, the Court of Justice would become competent to solve all interpretation issues. There does not seem to be room for a MAP any more. However, the author explains that the settled case-law of the Court of Justice allows to give some room for the MAP, although the Court of Justice has to have the last word.
The Arbitration Convention in Practice - Experiences
Authors: Lodin Sven-Olof
Published: February 2022

How does the EU-arbitration convention function in practice? Practical experiences of being a member of two advisory (arbitration) commissions. The role of the representatives of the disputing states - which should it be?. The role of the independent members taking into account that they usually form the majority that decides the outcome of the arbitration procedure. The Convention's description of the practical functioning of the commissions needs improvements. Long time span between the start of the tax dispute and the arbitration procedure. The importance of hearings with the companies involved. The question of publication of the decisions of the arbitration committee. Few cases of arbitration - still of great importance.
Transfer Pricing Arbitration as an Option for Developing Countries
Authors: Lennard Michael
Published: February 2022

The author considers some of the systemic and perception issues for tax arbitration involving developing countries that may prevent the broad take-up of arbitration provisions in tax treaties and may damage the reputation of arbitration in this area. He suggests some ways in which developing countries can manage the risks and uncertainties of such arbitration. In particular, he considers the importance of confidence-building and a partnership approach, as well as the role of regional and international organizations in supporting developing countries, if the potential for arbitration as a balanced and objective way of resolving disputes is finally to be unlocked.
Investment Treaty Arbitration: A Brief Overview
Authors: Hobér Kaj
Published: February 2022

The article describes, in summarized form, the various elements of investment treaty arbitration, as well as various aspects thereof. This kind of international treaties is mostly of a bilateral nature. The treaties entitle investors to commence arbitration against the host state. Investment treaty arbitration has grown rapidly during the last fifteen years.
BITs and Taxes
Authors: Simonis Paul H.M.
Published: February 2022

Taxation is gaining a more important role in treaty based investment protection. The question is not only whether the levy and collection of tax can breach standards of protection of international law, but also how taxation should be taken into account when determining the damage incurred and compensation to be awarded. Based on various arbitral awards the conclusion is that due to the high burden of proof, foreign investors will only in extreme cases be able to prove that the levy and tax collection by the host state is in breach of one or more standards of protection. In case of a breach of an investment treaty, taxation should be taken into account in determining the amount of damage and the amount of compensation. This not only concerns the amount of tax that would have been due if no breach had occurred, but also the host state and home state taxation on the compensation awarded. If the intention of an award is '...  to wipe out all the consequences of the illegal act and to re-establish the situation, which would, in all probability, have existed if that act had not been committed', there is certainly room for improvement with respect to taxation.
Canadian MNCs International Tax Planning: Theory and Practice
Authors: Weißert Sören
Published: February 2022

In this article, we analyse the role of international tax planning in Canadian MNCs outbound investment decisions in theory and practice. We identify the framework of international tax planning. We can show that international tax planning is an important factor (value driver) to influence the value of the whole firm (Canadian-based MNC group) and not only of a single investment project. We also introduce a new developed tax structure (tax engineering) for Canadian MNCs to apply international tax planning. According to this new tax management approach, the value of the whole group can be enhanced if each major investment project is wrapped in a specific developed and fine-tuned international tax structure. Establishing tax-optimized cross-border investment structures may enhance Canadian MNCs' global competitive position considerably. Moreover, the Canadian CFC exemption for foreign financing affiliates (section 95(2)(a) ITA) is critically evaluated in light of tax policy, international competitiveness and global tax competition as well as the current comments of the OECD on international tax planning in its reports base erosion and profit shifting (2013) and hybrid mismatch arrangements (2012).
Taxing E-Commerce on the Basis of Permanent Establishment: Critical Evaluation
Authors: Singh Manoj Kumar
Published: February 2022

This article discusses about concept of PE (Permanent Establishment) in case of E-commerce business transactions. Electronic commerce comprises the electronic sale by online stores of downloadable 'soft merchandise' such as music, e-books, e-newsletters, photos and video recordings, software and documents (direct e-commerce), the electronic ordering of tangible products (indirect e-commerce), online securities transactions as well as the provision of financial or other services. It also includes the subscription to and use of an internet service provider (ISP) or an online service provider (OSP), and has also been held to cover electronic data interchange (EDI), electronic fund transfers (EFT) and all credit and debit card activity. Ecommerce transactions can be 'business-to-business' (B2B) or 'business-to-consumer' (B2C). The principle difficulty with these kinds of transactions is that it is quite a challenge to identify the fixed place of business.

Thus, tax administrations today, throughout the world face the formidable task of protecting their revenue bases without hindering the development of new technologies. The challenges that are being faced by the governments and organizations like the OECD are real and the focus is on how to address them collectively and by way of ensuring international consensus. The allocation of taxing rights must be based on mutually agreed principles and a common understanding of how these principles should be applied. In addition to the need for consensus between governments, a need for cooperation between governments and business has also been identified.

The concept of PE is a fundamental and core aspect of international taxation. Its importance lies in its requirement to determine the right of a country to tax the profits of an enterprise that belongs to a different sovereign jurisdiction. Despite the two conventions and tax legislations in almost every country dealing with this concept, it yet remains elusive and its characterization gives rise to complex issues in international business taxation. Thus, there arises a need to not only clarify the concept but also to harmonize the varied interpretations given to PE worldwide through tax treaties, either by adding and reviewing the wording of Model Conventions such as the OECD, UN, and US versions, or by expanding the commentaries and technical explanations to them on current important matters.
Debt-flavoured Equity Instruments in International Tax Law
Authors: Bundgaard Jakob
Published: February 2022

Debt and equity can be structured to resemble one another through hybrid financial instruments. In this contribution the emphasis is on the tax issues related to debt-flavoured equity instruments in international tax law. This most important example of such instruments is preference shares. The article introduces the financial construction of preference shares and presents the rationale behind the existence hereof. As the main contribution the article presents an analysis of the international tax law aspects of preference shares, which includes a comparative overview, emphasizing the domestic tax classification and treatment in the United States, Germany, and Denmark. Moreover, the classification and treatment according to EU tax directives and double tax treaties is presented.
Issues Related to Cross-Border Short-Term Employment
Authors: Baranyai Gabor
Published: February 2022

This article discusses some of the international taxation aspects of cross-border short-term employment. The main aim of the article is to analyse how such employment can trigger source taxation, and to provide an assessment on the related theoretical and practical issues. The article provides an overview of the current OECD framework and also discusses the OECD's proposed approach related to the PE-concept. The author analyses the criticism of the current OECD Commentary, and provides its own view on matters related to the concepts of 'economic employer' and the risks related to PE exposure.
Transfer Pricing of Intangibles in Cases of Post-merger Reorganization: Lessons from the Revised OECD Draft
Authors: Oestreicher Andreas
Published: February 2022

On 30 July 2013 the Organisation for Economic Cooperation and Development (OECD) submitted a revised discussion draft on transfer pricing aspects of intangibles. As the OECD's work on intangibles is specifically listed as an item in the OECD's Action Plan relating to Base Erosion and Profit Shifting (BEPS), the OECD makes it clear that the revised discussion draft on transfer pricing aspects of intangibles should be considered as work in process that may be further revised during the course of the work on BEPS. Although the period for interested parties to provide written comments has elapsed, the OECD might well be interested in further comments. This should hold all the more as the time period since the introduction of the revised discussion draft allows these new rules to be tested out with regard to their practical feasibility and enforceability ('the proof of the pudding is in the eating'). On this note, this article on 'transfer pricing of intangibles in cases of post-merger reorganization' looks into the relevant guidance from the revised discussion draft and analyses the extent to which the OECD's revised discussion draft serves to resolve the issues of a typical tax audit case dealing with a post-acquisition transfer of intangible assets. The analysis may indicate that the revised discussion draft lacks particular guidance on the treatment of goodwill and other special characteristics that deserve particular attention in a comparability analysis. Revision is also needed with respect to the OECD's considerations on uncertainty of future developments that can affect the application of valuation techniques to the hypothetical arm's length price.
Tax Expenditures in India (20062012)
Authors: Jain Parul , Bhatt R.K.
Published: February 2022

Tax expenditures, which are like automatic device for granting quick relief to the beneficiary account without actual transfer of funds; have become so popular in India that practically all government committees have come up with recommendations for introduction, extension, enlargement or maintenance of tax expenditures. By using tax expenditure device, the Indian government has intended to influence the resource allocation, investment pattern, and guide flow of resources into desirable channels, as also encourage savings, investment, export, development of particular areas, agriculture, research and development, etc.

No a-priori judgment can be made regarding the exact impact of tax expenditure provisions. Only generalizations are possible. Among different methods of measuring tax expenditure, 'revenue foregone' is still the best possible method and brings transparency in the matter of tax policies. Data in respect of 'revenue foregone' in India show that total revenue foregone has shown a rising trend both for corporate and non-corporate tax payers, revenue foregone has always been higher in case of corporate tax payers as compared to non-corporate tax payers and the Central Government is losing on an average about 25% of its gross tax receipts due to various exemptions, deductions, etc. Further, effective rate of tax has been much lower at about two third of the statutory tax rates. Moreover, effective tax rate decreased in reverse proportion to profits.

Several problems have been encountered in the operation of tax expenditure provisions in India such as scattering of provisions, proliferation, benefit being higher for higher income groups, diversion of savings, procedural bottlenecks, complexities and ambiguities in tax laws and frequent changes. Despite these problems, it is generally agreed that tax expenditures should be preferred because they do not make use of government funds directly and they are merely tax reduction techniques. Hence, to make such provisions more effective, it is desired that they should be linked to performance, they should be well targeted, there should be rearrangement of provisions, administrators should ensure that tax expenditures are not converted into tax loopholes, there should be proper follow-up action and a Tax Research Institute should be set up within the Income Tax Department to evaluate the impact of various exemptions and incentives.
Tax Treaties and Developing Countries
Authors: Daurer Veronika
Published: February 2022

In today's discussion concerning tax treaties and tax treaty policy the implications in particular for LDCs are seldom addressed. There is a lack of analysis of which arguments might apply to this group of very poor countries but not for other developing countries. Based on a study of the tax treaty network of East African LDCs, the author contributes to this discussion by analysing two issues: What importance do tax treaties have for LDCs and what role does the UN Model play in the negotiation of tax treaties of LDCs. After considering a tax treaty's functions (the elimination of double taxation, the allocation of taxing rights, the prevention of tax avoidance and fiscal evasion, and the promotion of foreign direct investment), the author comes to the conclusion that an LDC can indeed benefit from entering into tax treaties. However, since a tax treaty can also have negative effects for LDCs, it is crucial for such countries to carefully evaluate all factors before entering into tax treaties. If an LDC decides to negotiate tax treaties, the UN Model is a good choice because it does indeed take into account certain particularities of capital importing countries. The treaty network of East African LDCs also shows that the UN Model already had a rather important impact on the treaty negotiations of these countries. Nonetheless, there are certain particularities in these tax treaties which might need to be considered for inclusion into the UN Model or in its Commentary in order to make this model convention even more relevant for East African LDCs.
International Tax Avoidance Issues: An Analysis of the Indian Law and Policy
Authors: Sharma Ajay Kr.
Published: February 2022

The uncertainty and inconsonance in the international tax regime in India is adversely affecting the foreign investors. The author elaborates on the concept of tax avoidance, its significance in international taxation, and discusses certain anti-tax avoidance strategies. The article also discusses the significance of DTAAs. Next, analysis of judicial appreciation and response by the Supreme Court of India on the tax avoidance issue is done by a critique of some of its landmark decisions. This article also discusses use or abuse by India of retrospective (so-called, clarificatory) tax law amendments to deal with the international tax avoidance issue, with special reference to certain 2012 amendments to its Income Tax Act, 1961 inter alia to nullify the imprimatur of the Supreme Court in Vodafone case. It also examines the issue of use (against Cyprus) and potential misuse of the recently introduced tax law provisions permitting imposition of 'special measures in respect of transactions with persons located' in the jurisdictions notified by the Indian Government on the basis of lack of effective exchange of information with that country, under Section 94A of the said 1961 Act, leading to a possible unilateral treaty override of the relevant DTAAs. In the last part, it examines the veracity of the current position adopted by the Indian government in its informal responses to the Vodafone arbitration jurisdictionally challenging these proceedings, commenced under the India-Netherlands BIPA, claiming that the said BIPA excludes tax issues.
Norway: 2014 Tax Developments
Authors: Zielke Rainer
Published: February 2022

The present article provides a praxis oriented overview for international readers on the 2014 tax developments in Norway with special respect to new Supreme Court judgments, new EFTA Court decisions, EFTA Surveillance Authority news, and further tax developments.
An Opportunistic, and yet Appropriate, Revision of the Source Threshold for the Twenty-First Century Tax Treaties
Authors: Escribano Eva
Published: February 2022

The present paper aims to delve into one of the most thrilling debates set out by the Base Erosion and Profit Shifting (BEPS) Project (specifically Action 1): the reconsideration of the permanent establishment threshold.

Without disregarding the fiscal interests that have undeniably boosted the reopening of the discussion, we prefer to question the appropriateness of the PE from a different perspective. First, we will analyse the theoretical principles that originally served to justify the PE threshold. Subsequently, we will demonstrate the obsolescence of the term - as it currently stands - as a result of the challenges posed by the so-called digital economy and in light of the aforementioned principles. Some proposals for the way forward will be briefly outlined.
The Agency Permanent Establishment in BEPS Action 7: Treaty Abuse or Business Abuse?
Authors: Pleijsier Arthur
Published: February 2022

The author analysis the four proposals made by the BEPS Focus Group on action number 7: preventing the artificial avoidance of PE status. He demonstrates that some of the proposals are not workable and are not in line with the core of the Agency PE provision, namely the legal framework of agency. The proposal regarding the independent agency provision is analysed with reference to the wording of this provision. The article focusses on the possible impact of these proposals for multinational companies. Commissionaire structures and limited risk distributors (LRDs) are used by many companies and the possible impact of the recommended changes on these structures are discussed.

The author concludes the article by proposing his recommended Agency PE provision aiming to support the objectives of the BEPS Focus Group but also to come up with a provision which would not disturb business too much.
Prevention of Double Non-taxation: An Analysis of Cross-Border Financing from a German Perspective
Authors: Kahlenberg Christian
Published: February 2022

The present article deals with the problem of double non-taxation arising from intragroup cross-border financing activities. In this context, the author explains selected financing strategies from a German outbound investment to identify distinctions or loopholes between the involved countries. Afterwards, specific and conceivable counter measures will be discussed in particular, such as the Organization for Economic Co-operation and Development (OECD) and the EU Commission have been addressed. Finally, the author comes to the conclusion that a correspondence principle could be purposeful to counter double non-taxation but only, if such a provision will introduce as a domestic and as a treaty rule as well.
Transfer-Pricing and Game Theory
Authors: Pogorelova Lioubov
Published: February 2022

This article examines the complex nature of the transfer-pricing problem to determine how strategic considerations of organizations guide the application of different types of game-theoretic models for a profit-split transfer-pricing method. The article proposes a conceptual framework that links strategy with specific game-theoretic models in transfer-pricing decision-making.
Proportionality and Fair Taxation
Authors: Rolim João Dácio
Published: February 2022

This article is a summary of the findings of the book Proportionality and Fair Taxation published by Kluwer International in 2014, in which the author investigated the role of proportionality principle coupled with the standard of reasonableness in assessing specific tax issues and the overall fairness of particular taxes and tax systems. Among those issues, the author points out equality and non-discrimination, retrospective taxation, tax penalties and sanctions, specific and general anti-avoidance rules, as well as the application of proportionality in tandem with reasonableness to Double Tax Conventions, human rights, and tax related rules of international trade.
VAT Connecting Factors: Relevance of the Place of Supply
Authors: Rey Antonio Vázquez del
Published: February 2022

The recent modifications on the place of supply rules regarding broadcasting, telecommunications and electronic services have brought a renewed interest on VAT connecting factors. Goods moving between EU countries and third countries have been traditionally subject to a rather straightforward set of provisions, as the implementation of the destination principle mainly relies on the traditional border tax adjustments. However, when dealing with supplies of services or with intra-Community transactions, the complexity of the place of supply rules increases as the realization of the destination principle depends exclusively on these provisions. In the absence of any further mechanism, these rules must lead to taxation of the 'import' of goods and services in order to guarantee tax neutrality in the domestic market, while they must also ensure that relevant 'exports' are not subject to European VAT in order to remove a tax obstacle from domestic entrepreneurs carrying on their activity in the global markets.
Sharing the Pie: Taxing Multinationals in a Global Market
Authors: de Wilde Maarten F.
Published: February 2022

Maarten de Wilde was awarded his doctorate (cum laude) by the Erasmus University Rotterdam on 15 January 2015 for his thesis on 'Sharing the Pie'; Taxing Multinationals in a Global Market. In his thesis, of which this contribution is a summary, De Wilde sets out a proposal for an alternative, more neutral system for taxing multinationals. His suggestion is that multinationals should be treated as a single taxable entity and granted an allowance for equity capital provided by shareholders. The proposal geographically assigns the tax base in international situations to the countries where the multinational effectively sells its products and services instead of, as is currently the case, to the countries in which its investments are located. Switching to the proposed system would seem attractive for countries and regions, both individually and as a totality, and would boost the investment climate. The manuscript of the thesis is available at ssrn.com.
Expatriate Taxation in Spain: Some Reflections for Debate
Authors: Ribes Aurora
Published: February 2022

The aim of this article is to discuss the Spanish tax regime for expatriates, currently envisaged in Article 93 of the Individuals' Income Tax Act. The purpose of this favourable system was to strengthen Spain's international competitiveness by attracting recipients of high income and foreign investment. However, the option to be taxed as a non-resident (exclusively on the Spanish sourced income and at 24%) for the five subsequent years, provided certain conditions are met, gives rise to some controversial questions both in the light of the constitutional principles and in the international field.

The article provides insight into the expatriate tax treatment of other European Union (EU) Member States, by examining the different approaches to the same topic. This comparative experience is taken into account for our criticism and proposals for an alternative design of a new Spanish expatriate taxation system.
Dual Role of the OECD Commentaries  Part 1
Authors: Nieminen Martti
Published: February 2022

The comprehensive two-part article deals with the Organisation for Economic Co-operation and Development (OECD) Commentaries’ relevance in tax treaty interpretation, particularly from the perspective of Articles 31 and 32 of the 1969 Vienna Convention on the Law of Treaties. The purpose of the article is to establish the legal basis for the use of the OECD Commentaries in the interpretative process and, most importantly, to determine their relative weight in the interpretative undertaking.

The main finding is that the relative value of the OECD Commentaries is not fixed but varies from case to case. The Commentaries’ interpretative weight in each particular situation depends on whether it can be established that the common intention of the tax treaty parties was to copy the substance of the OECD MC in the relevant terms of their bilateral treaty. Accordingly, the Commentaries have a dual role to play. They may be ‘a commentary’ or ‘the Commentary’.

When assessing which version of the OECD Commentaries is the one that corresponds to the intended substance of the tax treaty, it is noteworthy that also the temporal element of treaty interpretation (static or dynamic) must be decided case-by-case. It may be that the common intention of the parties was to give the treaty terms a fixed meaning but they may as well have wanted their mutual treaty, or parts of it, to function as a ‘living instrument’.