bluuebunny/crossref_metadata_2025_split huggingface dataset:
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.
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.
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.
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.
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.
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.
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.
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.
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’.
Qualification of Services Under Double Tax Treaties in Brazil: Open Issues After Iberdrola Case
Authors: Castro Leonardo Freitas de Moraes e , Monteiro Alexandre Luiz Moraes do Rêgo 
Published: February 2022

This article analyses the discussion regarding the tax assessment of Withholding Income Tax (WHT) on service fees paid from Brazil to other countries that have entered into a Double Tax Treaty with it. Mainly, after the judicial precedent known as Iberdrola case, the Brazilian Superior Court of Justice (STJ) left without analysis several issues that may play a role against future discussions on the qualification of such income under the treaty, namely the possible application of Article 12 and Article 14 to such stream of income. Although the Iberdrola case was favourable to taxpayers, since it applied Article 7 to prevent Brazil from levying the WHT of service payments from Brazil to Spain, it has failed to discuss if the technical service fees would be qualified under Royalties – due to specific protocol stating so – or Independent Personal Services – due to specific wording of the Double Tax Treaties (DTTs) entered into by Brazil. Due to this short-sided view of Brazilian courts, taxpayer should be aware that the precedents on the matter so far left out important issues to be examined, which can be crucial in case of a shift of position on the subject, in the near future.
Taxation of Digital Economy: An Indian Perspective
Authors: Singh Manoj Kumar 
Published: February 2022

The concepts of taxation, essentially important to any governmental set-up, have been modified over time to suit the rapid changes in the economic system. One such example which could be taken here is that of multinational corporations (MNCs) or business entities operating in several tax jurisdictions. Their income and activities being based in multiple jurisdictions may be liable to tax in all of them but, to adhere to the principles of clarity in law and avoidance of double taxation, various concepts emerged, like that of the Permanent Establishment (PE). Such concepts aim at not only bringing predictability for the taxpayer but to balance the conflicting interests of, mostly, the developed nations and the developing nations. In addition to this, certain jurisdictions provide various tax concessions and benefits which can be manipulated by the tax payers so as to have income rendered untaxed Internet advertising is rapidly growing both in terms of revenue and share in the total advertising market. The volume of internet advertising reached USD 135.4 billion in 2014. The market for internet advertising is projected to grow at a rate of 12.1% per year during the period 2014 to 2019. As the stakes started rocketing, taxing such virtual transactions attained prominence. The existing provisions of the income-tax statute were unable to tie the noose around these transactions. Perhaps the reason is Indian income-tax legislation is still governed by physical presence test. The search for new basis of taxation became inevitable. The question was whether the tax should be on consumption or income? Through the Union budget 2016, the government has put forth a proposal to impose an equalization levy at the rate of 6%. This levy is only on B2B Transactions. The author has discussed the features of the proposed equalization levy as per the Committee and the lacunae in the proposed levy will be looked into. In the course of this article, the author seeks to briefly study the dimensions of digital economy and the problems so faced by the taxation regimes. Various recommendations have emerged from academicians and experts, the most prominent of them being the OECD/G20 Base Erosion and Profit Shifting Project, Action 1: 2015 Report (hereinafter referred to as ‘BEPS Report on Action 1’). The models so proposed under will be studied to understand the limitations. Further, in light of the ‘Equalization Levy’ so proposed by the Union Budget, 2016, the stance of the Indian government will be examined keeping in mind the observations of the Report of the Committee on Taxation of E-Commerce3 released in February 2016 (hereinafter referred to as ‘Indian Committee’). However, the author will not dwell into the issues of compliance and infrastructural requirements for each of the proposed solutions, including the one proposed to be adopted by the Indian Government. The scope is further restricted to taxation on income rather than Value Added Tax (VAT).
Interplay Between the Principal Purpose Test in the Multilateral BEPS Convention and the Beneficial Ownership Clause as Treaty Anti-Avoidance Tool Targeting Holding Structures
Authors: Palmitessa Elio Andrea 
Published: February 2022

The signing of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI), has enabled the participant jurisdictions to begin the process of implementing certain treaty-based Base Erosion and Profit Shifting (BEPS) recommendations into their network of double tax conventions. In line with Action 6 of the BEPS Plan, as per Article 7 of the MLI, a minimum anti-abuse standard provision to counter treaty shopping was introduced. This article discusses the outcomes deriving from the application of the Principal Purpose Test (PPT), as default provision, and its possible interplay with the treaty anti-avoidance tool presented by the clause of the beneficial owner for tax treaty purposes. The analysis is supported by practical guidelines issued to holding companies, based on recent case law.
Case law note: The CJEU Confirms that the Amount of Interest Normally Payable Under National Law on Overpaid VAT Cannot Be Reduced
Authors: Herbain Charlène A. , Zheng Yi Lei , De Meyer Thomas 
Published: February 2022

On 28 February 2018 the Court of Justice of the European Union (hereafter ‘CJEU’) ruled in the Nidera BV case (C-387/16) (CJEU, 28 Feb. 2018, Case C-387/16, Nidera BV, ECLI:EU:C:2018:121.) that Article 183 of the VAT Directive, read in the light of the principle of fiscal neutrality, must be interpreted as precluding a reduction in the amount of interest normally payable under national law on overpaid VAT which was not refunded in due time for reasons connected to circumstances not attributable to the taxable person, such as the high amount of that interest when compared with the amount of overpaid VAT, the period of time during which the overpayment was not refunded and the underlying reasons for this, as well as the losses actually incurred by the taxable person. In previous case it already became clear that overpaid tax must be refunded to the taxable person concerned within a reasonable period. If not, the taxable person must be compensated in the form of default interest. (Opinion AG, 28 Feb. 2018, Case C-387/16, Nidera BV, ECLI:EU: C:2017:740, paragraph 1.)