On 23 June 2016, UK voters decided to opt out of the European Union. The Brexit will have significant tax consequences. This paper provides some brief technical background, listing the main headings of tax law under which the Brexit will impact the United Kingdom and the European Union.
BEPS-driven implications for M&A transactions
This paper discusses the manner in which expected changes to the tax legislative framework of various jurisdictions, driven by the BEPS proposals, are likely to shape the manner in which M&A transactions are carried out. This is particularity relevant in the current economic context, in which the value of M&A activity has reached unprecedented levels, an ascending trend that is expected to continue in the current year.
Tax Implications of the Amended 2016 Constitution of Zambia
This paper provides a critical review of the taxation provisions in the amended 2016 Constitution of Zambia. It analyses these provisions and lays out the impact that they may have on the prevailing tax laws and on the country's capacity to generate the revenue necessary for national development. Furthermore, the paper discusses the role of Parliament in the implementation of some of these provisions and the capacity building that the legislature may require.
Old Habits Die Hard: Should the United States Abolish Citizenship-Based Taxation?
The dramatic rise in citizenship renunciations by US nationals living overseas is likely pegged to increasingly stringent reporting requirements in particular and to the regime of citizenship-based taxation (CBT) in general. In this paper, the author maintains that the United States should consider scrapping CBT in favour of residence-based taxation (RBT), which is employed by every other OECD member country.
"Options for Low Income Countries’ Effective and Efficient Use of Tax Incentives for Investment": A Response
This White Paper is a summary of the response by IBFD’s Asia-Pacific office to a discussion draft released by the OECD on options for low income countries' effective and efficient use of tax incentives for investment.
Skandia America – How to deal with supplies between a head office and a fixed establishment in the future
On 17 September 2014, the ECJ gave its decision in the Skandia America case, which generated considerable debate within the VAT community. Member States are compelled to evaluate its effects and to issue guidance accordingly while the European Commission seeks a solution to the issues raised. Until any form of consensus is reached,
Skandia America is likely to lead to confusion and legal uncertainty regarding the treatment of supplies between a head office and fixed establishments that are also part of a VAT group.
Family Unit Taxation in Canada: The Family Tax Cut
This White Paper reviews Canada’s Family Tax Cut, which was recently introduced as an income splitting measure. Against the background of various measures concerning family taxation in Canada and selected countries, the Paper reviews the Family Tax Cut. The Cut does not represent the international norm, and does not seem to achieve its stated objectives.
Have Cost Contribution Arrangements Evolved into Value Contribution Arrangements?
This White Paper provides an overview of the challenges that multinational enterprises (MNEs) will face as a result of the draft guidance on cost contribution arrangements published by the OECD on 29 April 2015. This Paper argues that the focus of the analysis effectively shifts from cost to value contribution.
Can a treaty create taxing rights for a contracting state? – Examining the differences in the definition of “permanent establishment” in Kenya's domestic law and treaties.
This White Paper looks at the definition of permanent establishment (PE) in Kenya's Income Tax Act 1970, as amended (hereinafter “the ITA”), to determine the extent to which the definition is effective in providing certainty as to when a non-resident's activities will be considered to meet the PE threshold and, therefore, taxable in Kenya on business profits from such activities.
US States Challenge Tax Havens
This paper is recommended reading for international tax professionals and academics who are interested in the debate concerning the promulgation of tax haven laws by sub-national jurisdictions. It briefly explains two general principles related to the tax haven laws enacted by US states, namely, the concept of apportionment and the treatment of unitary businesses. The tax haven laws passed in Montana and Oregon contain a list of jurisdictions designated as tax havens. In Washington D.C., West Virginia, Alaska, and Rhode Island, the laws describe statutory criteria to be applied in identifying tax haven jurisdictions. Each state employs a combination of the “worldwide combined unitary reporting” and “water’s edge consolidated return filing” approaches. The paper concludes by reviewing the concerns and criticisms raised with regard to the tax haven laws.
VAT Lotteries – The ultimate road towards tax compliance and social awareness?
This White Paper analyses the use of receipt-based tax lotteries as a technique to increase VAT compliance by incentivizing taxpayers to request receipts, and by fostering a change in taxpayers' attitude towards, specifically, a more tax-compliant society. Experiences with these schemes in EU and non-EU Member States are accordingly reviewed. The successes, and obstacles to success, are highlighted.
Withholding Taxes in the Service of BEPS Action 1: Address the Tax Challenges of the Digital Economy
This position paper provides possible solutions to the challenges presented to the international tax regime by the digital economy. It considers the option of installing a broad withholding mechanism based upon the base erosion principle both as a primary response to these challenges or in support of a new nexus-based solution.
Blueprints for a New PE Nexus to Tax Business Income in the Era of the Digital Economy
In relation to Action 1 of the OECD/G20 BEPS Project, this paper outlines the core issues of the introduction of a new PE nexus based on digital presence. It puts forward its essential features and rethinks the foundations of the concept of sourcing for income tax purposes in the global economy.
This paper should be understood as a discussion paper to shed further light on (i) whether there is a theoretical justification for a new PE nexus based on digital presence, (ii) how a new PE nexus based on digital presence could be defined and (iii) whether and how potential implementation issues could be resolved.
Restoring integrity of tax systems - a taxing crossroad
BEPS and integrity of tax systems: [...] Some stakeholders appear to have rejected, for example, the long-standing legal notion in tax law that "anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes".
- Billings Learned Hand
Tax Policy Trend in Africa - Commentary on the Major Tax Developments of 2013
This paper is a commentary on the major tax policy developments that took place in Africa in 2013. Most of the tax developments discussed are as reported by the Tax News Service of the International Bureau of Fiscal Documentation (IBFD) for the same year.
Cross-border B2C supplies of services requiring cross-border guidelines
This White Paper reviews the challenges facing the OECD in designing VAT/GST guidelines on the place of taxation of cross-border B2C supplies of services. Possible proxies for determining the place of taxation for the various B2C services that could be provided and the methods for collecting and enforcing the VAT/GST, such as supplier registration, will need to be considered.
Emigration and immigration of a business: impact of taxation on European and global mobility - Winning Master Thesis – CFE’s Albert J. Rädler Medal 2013
This research describes the impact of taxation on European and global mobility, focusing on the emigration and immigration of a business from a Dutch tax perspective. Three main criteria are used to assess the current tax system (DTCs, EU law and the benchmark of capital import neutrality), in the light of which the author provides recommendations to improve the current system. In addition, an alternative system is proposed that addresses the problems regarding business migration on an interstate level.
How BEPS May Impact on Existing Group Structures
This White Paper highlights how the OECD's Action Plan on Base Erosion and Profit Shifting (BEPS) impacts existing group structures. The author analyzes the possible effects that BEPS may have on digital trading, intra-group financing, hybrids and dual-resident companies, group finance and licensing companies, foreign permanent establishments and business restructuring/supply change management, and includes a look at some of the related transfer pricing issues. It also observes how some countries have already taken certain of the actions envisaged by BEPS prior to its publication, and some are taking action right now. The IBFD online collection International Tax Structuring covers all of these issues, as well as others in the BEPS Action Plan, as they may impact on an international business at each relevant stage of its development. The collection will continue to track the evolvement of the BEPS plan as it unrolls over the next few years.
Some Thoughts on Convergence and Tax Treaty Interpretation
Article from the Bulletin for International Taxation
VAT Compliance Record of New Member States
This White Paper reviews the issues regarding the compliance of the new Member States with EU VAT law on the basis of the existing ECJ case law.
The Treatment of Services in Tax Treaties
This White Paper reviews the issues regarding the treatment of services in the UN and OECD Model Tax Conventions, and highlights IBFD’s research on the occurrence of general treaty provisions for entrepreneurial services. The arguments for and against gross and net taxation, and the possibility of a model provision, are explored.
The application of General Anti-Abuse Rules (GAARs) under Double Tax Agreements (DTAs)
This White Paper analyses the approach taken by the OECD regarding the application of domestic anti-abuse measures under Double Tax Agreements and the concerns it raises.
France exempts dividends paid to selected UCITS from dividend withholding tax
This White Paper analyses the conditions pursuant to which French-source dividends paid to a UCITS are exempt from withholding tax, and makes a few practical recommendations.
High tax on high income earners: not the right path to take.
This White Paper cautions against excessive taxation, and basically adopts the supply-side-economics point of view.
Exchange of Information agreements as a means of combating tax evasion
The liberalization of domestic economies (including the restriction or elimination of the control on foreign investment and of foreign exchange controls) allows persons operating globally to easily shift around not only passive income but also active income. In addition, some jurisdictions also embarked in tax competition including the creation of special offshores regimes to attract the internationally mobile capital. This reality plus the differences in domestic tax systems provide taxpayers the opportunity to benefit from special regimes and also to try to avoid or evade taxation.Confronted with this problem, countries must on the one hand fight for maintaining their tax sovereignty and ensure the correct allocation of taxing rights between tax treaty partners. On the other hand, harmful tax competition has to be addressed by the international community. The aim is to improve transparency and cooperation between tax administrations, the key element being the exchange of information.
Abuso de convenios de doble imposición
Este artículo describe los aspectos generales el problema del abuso de convenios de doble imposición, el cual se ha estudiado en el ámbito internacional, principalmente, en relación con el "mercadeo de tratados"1 (treaty shopping); aunque en ningún caso se limita al mismo. La sección 2 describe el problema del abuso de estos convenios y de su definición (sección 2). La sección 3 describe las medidas que los Estados han adoptado o pueden adoptar para contrarrestar el uso abusivo de estos convenios, considerando asimismo sus limitaciones. Finalmente, la sección 4 analiza, dentro de este contexto, la situación y medidas adoptadas por Chile.
Integrity, ethics for tax administrations
Ethics are the keystones of integrity. But how do we define what is actually right and wrong? The grey area is rather big, in most of the cases; therefore integrity or its lack of it has to be judged from case to case. Some governments actively overlook the lack of integrity as a non-existent issue; some use it as a working tool.
Good Governance and Integrity: presentation given by Prof. Dr Van Kommer during the Commonwealth Business Forum 2009
It is well known that unsatisfactory governance and lack of integrity have a negative influence on a country's economic growth and social welfare. However, despite decades of foreign consultancy, academic research and political advice, the situation has not improved in many parts of the world. The problem is that the fundamentals of good governance and integrity are of western (often Anglo-Saxon) origin but are presented as universal principles, thus denying the importance of domestic values and failing to acknowledge cultural characteristics. Fighting corruption and non-integrity is ineffective if the focus is on foreign standards that cannot be implemented in an environment that is (almost) hostile to non-practical and non-executable advice. Therefore, instances of lack of integrity should first be studied in depth in order to uncover the reasons behind unwanted behaviour, as well as the conditions that facilitate it. In this sense, every case of corruption is an example of the failing conditions of a system that is unable to protect its participants against vulnerable situations. Instead of fighting abuse of the system the aim should be to make organizations and societies healthy and allow new winners to set an example for the next generations.
Legitimacy of the State and Taxation
In many articles and books about tax administration and taxation, the concept of “compliance” is introduced and explained. However, the paradigm of the legitimacy of the state is mostly forgotten. It is taken for granted that an essential and common understanding exists between the taxpayer and the state about the obligations of both and about the individual rights of the citizen.
IBFD special monitor - Tax Information Sharing
Since 1938, the International Bureau of Fiscal Documentation (IBFD) has documented the progression of cross-border taxation. One of the more recent progressions has been the developments in transparency and exchange of information regarding tax matters. Much of this activity has been driven by governments’ desire to secure their tax bases during tough economic times as well as the OECD’s advocacy of a threshold to distinguish between jurisdictions which have implemented standards for information sharing and those which have not.
Do you have questions or trouble viewing your white papers? Please contact Bérénice Herisson by email
or by phone +31 20 554 0327.