bluuebunny/crossref_metadata_2025_split huggingface dataset:
Responsiveness (Buoyancy) of Union Taxes to GDP in India (199091 to 201516)
Authors: Jain Parul 
Published: February 2022

Changes in tax receipts of government take place with changes in Gross Domestic Product (GDP). Such changes in tax receipts may be the result of two factors: (1) there may be automatic changes in the tax yield when tax parameters are held constant. Such automatic changes are referred to as elasticity or built-in flexibility. (2) Increasing tax receipts may also necessitate imposition of new taxes, changes in rate structure of existing taxes, expansion of tax base, changes in scheme of exemptions, etc., or briefly referred to as discretionary changes. The overall responsiveness of tax revenues to discretionary changes in tax scheme (including automatic responses) is called responsiveness or buoyancy of the tax system and it is measured as the percentage change in tax receipts over percentage change in GDP. The tax structure of the Union Government in India is composed of direct and indirect taxes. In terms of tax receipts, direct taxes are mainly composed of corporation tax and income tax while indirect taxes mainly include customs, excise duties and service tax. An analysis of responsiveness (buoyancy) reveals that the overall buoyancy of union taxes has been 1.04. Direct taxes have had a higher buoyancy coefficient. Within direct taxes, corporation tax has exhibited higher buoyancy as compared to income tax. Buoyancy coefficient of indirect taxes has been less than 1.0 and within indirect taxes, buoyancy of excise duties has been lower than that of customs. Service tax has, however, revealed the highest buoyancy coefficient. Some of the factors responsible for lower buoyancy (responsiveness) of Indian taxes have been relatively slower expansion in base, increase in threshold limits, and large number of exemptions, rebates and deductions under tax laws, reduction in customs and excise duty rates under the impact of New Economic Policy, increasing tax evasion etc. It is high time that tax/GDP ratio in India be considerably raised through improving buoyancy coefficients. This would necessitate considerable expansion in tax base, bringing agricultural incomes under the Central Income tax net, rationalization of tax-preferences/incentives, bringing non-filers in unorganized sectors under the tax net, concentrating on High Net Worth Individuals, checking avoidance and evasion of taxes and improving tax administration. There is also need for introducing ‘accountability’ and switching over to ‘family’ as the unit of assessment.
Issues in Reforms of Union Taxes in India
Authors: Jain Parul 
Published: February 2022

The correction of fiscal imbalances in India should focus on the root cause of disequilibrium – the government not being able to balance its consumption outlays with revenue receipts. Restructuring of public expenditure seems to be very difficult under the present circumstances. Hence, significant improvement will hinge increasingly on improvement in revenue collection through direct and indirect taxes. There is need for comprehensive reforms in direct and indirect taxes through decisive action in many crucial areas rather than marginal improvement on all fronts. Broadening of the tax base is necessary to ensure growth of revenue. In direct taxes, there is a need to analyse the extent to which taxpayers actually belong to the higher slabs than they reveal in their tax returns and non-filers should be brought into the tax net. In the case of central excise and service tax, there is need to build a strong mechanism to ensure filing of returns by all registered taxpayers. To improve tax collections, it would be desirable to ask firms and companies to pay tax in equal instalments and adopt ‘family’ as a unit of assessment. The exemption/threshold limit should not be raised from the present level and Indian tax system should have smooth progression The Indian tax system incorporates a number of tax preferences/incentives to promote different activities which result in huge tax expenditure in case of both direct and indirect taxes. Tax expenditures, despite their drawbacks, need to be retained in the Indian tax system. However, they should be well targeted and be linked to performances. There is also a need to check the problem of increasing tax avoidance and evasion through stricter imposition of penalties and following of vigorous prosecution policy. Efficient tax administration calls for building up of a professional cadre of administrators who may implement the tax system more equitably and efficiently. It is desirable that voluntary compliance be encouraged and non-compliance be penalized. There is need to minimize arrears of assessment and collection, pendency of appeals, issue quick refunds, and so on. The main challenge at the present juncture is to integrate the large number of Central and State taxes to address the problem of multiplicity of taxes. The introduction of the Goods and Service Tax would be a significant step in the field of indirect tax reform in India and pave the way for a national common market.
Stateless Income, State Aid and the (Which?) Arms Length Principle
Authors: Wattel Peter J. 
Published: February 2022

The arm’s length principle has a new function. When used by the European Union (EU) Commission for State aid control purposes, it is aimed at protecting a level playing field for all economic operators in the internal market, i.e. at protecting free competition, rather than at tax base protection or prevention of double taxation. In that function, it is part of competition law, rather than of tax law. It may, therefore, deviate from the traditional Organisation for Economic Co-operation and Development (OECD) understanding of that principle. The case law on which the Commission relies, is not very explicit, and it remains to be seen whether the EU Courts will endorse the Commission’s approach, but from a competition law perspective, that approach makes sense. Both from the Belgian excess profits scheme case and the Apple case, it transpires that the Commission is of the opinion that a company cannot have stateless income. A branch State cannot suffice by saying ‘not in my yard’ if that implies that real income is allocated into a tax void, disappearing for tax purposes into a physically non-existent head office. Whether or not the EU Courts, if they accept the Commission’s approach, will also accept recovery ten years back with interest, will most likely depend on the question of whether, even if the Commission’s approach may be novel, the companies and the Member States involved should anyway have known better.
The UK Brexit Referendum: A Catalyst to Reform the European Union Institutional Architecture in Tax Matters?
Authors: Traversa Edoardo , Pirlot Alice 
Published: February 2022

The results of the UK referendum in favour of leaving the European Union (EU) clearly put into question the European economic and political project as well as its institutional structure. This article argues that the Brexit may be a momentum to reform the institutional structure and procedural rules through which tax policy is made at the EU level. The UK referendum is indeed unlikely to further slow down the EU harmonization process in tax matters, which has always followed a tortuous path. Instead, the Brexit may give momentum to reform major weaknesses of the EU institutional and decision-making process in tax matters, in particular the unanimity rule and the role of the European Parliament. Finally, with regard to taxation specifically, the establishment of an EU tax, providing the EU with sufficient genuine own resource, could also reinforce EU’s legitimacy by countering the criticisms related to Member States’ contribution to the European budget.
Changing the Paradigm of Shipping Activities Taxation in Portugal
Authors: Borrego Luis M. P. 
Published: February 2022

This article intends to describe the latest developments regarding the options on the taxation of shipping companies in Portugal. The recent policy developments aim at a reformulation of the taxation system, in particular with the possible adoption of a tonnage tax regime, like most of its European counterparts. Thus, this article includes an overview of the current taxation options for shipping companies and seafarers in the EU, their framework for State aid and a general description of the tax policy options that may be adopted in Portugal; it also considers whether, in the Portuguese case, a simple change in the taxation model will be sufficiently attractive to encourage the return of ships to the conventional registry.
Country note: Irregular and Wasteful Expenditure, Tax, and Fiscal Citizenship in South Africa
Authors: Tickle Deborah 
Published: February 2022

The Auditor General of South Africa, in his consolidated audit reports for 2015/2016, reported ZAR 65.5 billion of ‘irregular’ and ‘wasteful’ expenditure by central, provincial and local government in South Africa, together with ten of the twenty-one state-owned enterprises. This figure was almost double that of the previous year. Against a background of government corruption, significant poverty and a taxpayer base in 2015, whereby 130,000 individuals paid a third of the personal income tax and 616 companies paid two-thirds of the corporate income tax, the question arises whether the levels of ‘irregular’ and ‘wasteful’ expenditure result in reduced levels of fiscal citizenship in the country. This article further looks at the general concept of fiscal citizenship and establishes that reduced trust in government results in reduced tax morality and fiscal citizenship. It finds that this rule applies equally in South Africa. The levels of ‘irregular’ and ‘wasteful’ expenditure in the country arise to some extent, and are perceived to arise to a large extent, from corruption. The South African tax authority acknowledges, together with professional commentators and journalists, that the ensuing lack of trust in the State has a negative impact on fiscal citizenship.
Tax Information Exchange Agreements and the Prohibition of Retroactivity
Authors: Scapa Passalacqua Anna B. , Mazz Addy , Quiñones Natalia , Roeleveld Jennifer 
Published: February 2022

This article presents a study of the retroactive application of tax information exchange agreements (TIEAs) in Brazil, Colombia, South Africa and Uruguay, with a view to articulating policy recommendations for similar emerging economies. Contracting states should adopt clear rules in their TIEAs as regards their temporal application. In the absence of such rules, contracting states should abstain from applying a TIEA retroactively. The authors further recommend that legislatures adopt clear rules in domestic law governing whether a TIEA should apply to pending proceedings at the time of signature of the TIEA. Countries wishing to provide for retroactive effect in respect of information that is still open for review under statute of limitations rules may include provisions to reflect this both in domestic law and in the TIEA itself. It is recommended that countries carefully review and agree whether exchanges of information should be restricted for cases that already have been subject to a reassessment proceeding and, thus, are closed, even when the statute of limitations period has not lapsed. Legislatures in emerging countries should also take a position in domestic law on the issue of whether taxpayer rights may be limited as the result of a retroactive TIEA application.
Hybrid Entity Mismatches and the International Trend of Matching Tax Outcomes: A Critical Approach
Authors: Parada Leopoldo 
Published: February 2022

The international tax debate as regards hybrid entities has certainly changed after the OECD BEPS Project. Since then, the trend has been focused exclusively on matching transactions involving hybrids and reverse hybrid entities and double non-taxation, however without questioning whether these two elements are necessarily interconnected or whether they should serve each other in the design of domestic anti-hybrid provisions. This is particularly evident as regards the notion of ‘hybrid (entity) mismatch arrangements’ the design of which is based on the assumption that income should be taxed somewhere – no matter where – and as regards the complex set of domestic solutions proposed (‘linking rules’) the true efficacy of which is nevertheless still unknown. In this vein, this article adopts a critical approach both as regards the diagnosis of the problems and as regards the solutions proposed. As to the diagnosis, the author argues that the artificial attempt to match transactions involving hybrid entities and double non-taxation not only disregards the fundamental issue as regards hybrid entity mismatches (i.e. the disparate tax characterization of the same entity by two different states), but also carries with it the risk of creating presumptions of abusive practices in all those cases in which a hybrid entity structure is simply not taxed at all. As to the remedies, the author argues against the complexity, excessive reliance on foreign laws and potential economic double taxation issues that the implementation of linking rules might cause from a tax policy perspective. From a practical perspective, the author questions the proper interaction between linking rules and other anti-base erosion provisions, such as interest limitations and CFC rules. This article ultimately concludes that a re-orientation in the international debate regarding hybrids and reverse hybrid entities is crucial in order to open the door for more fundamental – and perhaps also more coordinated – solutions.
Case law note: A Noncumulative Single Stage Sales Tax Does Not Infringe on the VAT Directives Prohibition to Introduce a Turnover Tax
Authors: Vanhee Thomas 
Published: February 2022

On 7 August 2018, the Court of Justice of the European Union (CJEU), in case C-475/17, (CJEU 7 August 2018, Case C-475/17, Viking Motors and Others, TKM Beauty Eesti OÜ, TKM King AS, Kaubamaja AS, Selver AS v. Tallinna linn, Maksu- ja Tolliamet, ECLI:EU: C:2018:636) issued a ruling on the interpretation of Article 401 of the VAT directive (Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, OJ L 347/1 (11 Dec. 2006)). The article prevents Member States from introducing another turnover tax similar to VAT, which may impair the functioning of the internal market. The Court debated the nature and concept of a turnover tax, the prohibition of maintenance or implementation of national taxes that resemble the same nature of VAT, as well as the essential characteristics of VAT. This case note reflects on the decision adopted by the Court interpreting the same Article 401 in respect of the sales tax imposed by the Tallin City Council, Estonia.
Country note: Implementation of Current Withholding Tax in France: The French Exception is Gone!
Authors: Poras Geoffrey , Charpenet Agnès , Jaffe Michael , Murray Elliott 
Published: February 2022

Almost every developed country has put in place a system of current year withholding. What better way to ensure that taxes will be paid than to require the employer to withhold current year taxes from current year wages! Yet France has been virtually the last country to change from its current system where payment is made the year after income is earned and the employer is completely eliminated from the tax process. Each time moving from the old system to the standard current year withholding system has been discussed, resistance to change has prevailed. This time, after some last minute prevarication, President Macron will be leading the country forward with the reform starting 1 January 2019. It is important to understand what changes are in store, what happens during the 2018 transition tax year, and some unintended consequences on US taxpayers residing in France. We will first review how the new French withholding tax applies to salaries. We will then examine the transition measures that have been put in place to avoid tax abuse and yet avoid double taxation. Finally, we will look at an exceptional issue that the transition creates for US taxpayers residing in France for whom immediate action may be necessary.
Taxing Carbon Emissions from International Shipping
Authors: Falcao Tatiana 
Published: February 2022

According to the International Maritime Organization (IMO), maritime transport emits around 1 billion tonnes of CO2 annually and was responsible for approximately 2.5% of global greenhouse gas emissions in 2014. The prediction is that greenhouse gas emissions from maritime transport alone may increase between 50 and 250% by 2050, depending on future economic and energy developments. In spite of that, there is no concerted action or plan to tax or capture the CO2 emissions derived from international maritime shipping – the most widespread and popular form of transportation. This occurs in an environment where, from the perspective of corporate taxation, the international maritime industry is one of the sectors that is often taxed at some of the lowest tax brackets, if compared to other business. This article fulfils the threefold purpose of (1) discussing the international standards to which the international maritime transport network is subjected, from international public law and environmental law perspectives; (2) analysing the international tax regime applicable to the taxation of income derived from international shipping transport; and finally, (3) suggesting future policy approaches based on the principles and premises identified, to tackle carbon emissions derived from international maritime transport. The article purports to provide a full overview of the direct and indirect tax obligations which the maritime industry is under, and suggest policy approaches to assure that the environmental cost of transport is captured in the final price of products traded internationally, in order to reestablish geographic economic equity through the application of a carbon tax instrument.
The Principal Purpose Test as Introduced by the OECD MLI: Is It Time for a Compromise with EU Tax Law?
Authors: Cuoco Antonio 
Published: February 2022

The OECD Multilateral Instrument (MLI) introduced the principal purpose test (PPT) as a considerable step forward in counteracting treaty abuse. This article analyses the PPT rule in light of the possible restriction of EU freedoms. The first part analyses the wording, structure, rationale and effect of the PPT rule. Particular attention is paid to the reasonableness test and to the circumstance that the PPT rule introduced by the OECD MLI does not literally incorporate a reference to the genuine activity and the business purpose and, as such, seems to lower the threshold of abuse compared to the EU Court of Justice (ECJ) standard. Subsequently, compatibility with EU law is explored via the three-step process as developed under settled case law of the ECJ. An interim conclusion is reached concerning the risk of incompatibility of the PPT rule with EU law. Next, an interpretative effort is made on the basis of a systematic interpretation (1) of the Commentary on the OECD Model (2017) and (2) of recent ECJ case law in order to show that PPT rule may be reconciled with the ECJ standard of abuse and a compromise may be achieved. Finally, the achieved compromise is briefly exemplified having regard to an ‘equity wall’ structure in order to illustrate a fact pattern (different from the clear-cut examples given by the OECD Commentary) that might fall within the scope of the PPT for tax treaty purposes.
Advance Pricing Arrangements: Optimal Tool – Optimal Framework?
Authors: Valente Piergiorgio 
Published: February 2022

Advance Pricing Agreements (APAs) are a diffused tool for taxpayers to obtain certainty in relation to the tax impact of their cross-border activities through an agreement with a tax administration in advance of such activities. APAs can be unilateral, bilateral, or multilateral depending on the number of national tax administrations involved, the latter two promising that the agreement made shall not be questioned in the other affected tax jurisdiction. Departing from the enhanced mutual agreement procedure (MAP) framework recently established among Member States through the Tax Dispute Resolution Directive, a future EU legislative initiative could outline a robust framework for MAP APAs in the Single Market.
Advance Pricing Arrangements, Dispute resolution, MAP – Mutual agreement procedures, Administrative Cooperation, BEPS, Transparency, Fiscal Stateaid, Transfer Pricing
UN MTC Article 8: Was the Source Rule Surrender on Article 8 a Blunder? The Case Study of Pakistan
Authors: Ahmed Muhammad Ashfaq 
Published: February 2022

The United Nations Model Tax Convention (UN MTC) Article 8 allocates taxing rights on international traffic to the state of effective management. Article 8 (Alternative B), however, to the extent of shipping, conditionally allows some taxing rights to source state, too. The study posits that by surrendering source rule on Article 8, UN MTC ditched developing countries. This allowed airlines and shiplines stationed in developed countries not only generate large sums of revenues by hitting developing countries’ ports but also repatriate them tax free to a sustained disadvantage to the developing countries. The costs of the source rule surrender for the developing countries were realized on account of soft outflow of hard-earned foreign exchange, foregone revenues, and stunted growth of critical communication industries. It is argued that Pakistan’s aviation and maritime industries’ decent rise through 1950s, 1960s, 1970s and 1980s, and their abject descend into chaos through 1990s, 2000s and 2010s is explainable in terms of double taxation agreements (DTAs) obtaining Article 8 it signed. The insights gleaned are generalizable to other similarly circumstanced developing nations whose aviation and maritime industries failed to keep pace with their overall development. The UN MTC’s surrender on Article 8, it is posited, promoted mass-scale injustice at inter-state level, and therefore, needs correction.
UN Model Tax Convention, UN MTC Article 8, International Traffic, International Shipping, International Aviation, Reciprocal Exemption, Territoriality, Double Taxation Agreements, DTAs and Developing Countries, Tax Base Erosion
Neutrality and Proportionality in VAT: Making Sense of an (Apparent) Conflict
Authors: Greggi Marco 
Published: February 2022

Neutrality and proportionality are two features of the European VAT that often come into play when judiciary is requested to rule on alleged frauds to the tax. According to the well settled case law of the European Court of Justice (ECJ) the right to deduct VAT can’t be granted when such a fraudulent operation occurs. In the EN.SA. case, to the opposite, the Court rules that neutrality is to be preserved even when the operation invoiced did not actually take place, if very specific circumstances are met: namely, that no loss for the national budget occurred, that the company invoiced was not actually planning to erode its tax liability for VAT purposes and that the non-existent operation was simulated for other commercial purposes (not directly affecting the tax due). This conclusion is made possible making the principles of proportionality (and reasonableness) to prevail over a mechanical application of the tax that would otherwise prevent the right to deduct the tax charged.
VAT, neutrality, proportionality, reasonableness, fraud, carousel, invoice, administrative sanction.