February 2015  
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Issue No. 1 - 2015 of the World Tax Journal is now available online.

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Number 1 - 2015 contains the following:
 
Innovation through R&D Tax Incentives: Some Ideas for a Fair and Transparent Tax Policy
Paolo Arginelli
Innovation is generally considered a cornerstone of sustainable economic growth and prosperity, as well as a key to business success and to the development of emerging economies. This may justify the policy of subsidizing scientific and entrepreneurial activities that could lead to innovation and, thus, to the accumulation of valuable intangible assets, such as know-how, patents, trademarks, copyrights. This policy appears all the more defensible where one considers that the economic benefits of innovation may spill over without charge, which might contribute to render it less attractive for a company to embark upon expensive and uncertain R&D ventures and, thus, lead to market failures. Given the above-mentioned relevance of innovation as a driver to business success and the fact that valuable intangibles are regarded as the corporate assets that contribute for the most part to that success, it is not surprising that the blow-out of the crisis in 2007 has revamped in many states (in particular within the European Union) the policy of providing tax incentives to R&D activities and the result thereof (i.e. valuable intangible assets). Against this background, this article is aimed at identifying the policy goals of current European R&D tax incentives, categorizing their most significant common features, evaluating them in the light of the policy goals pursued and assessing whether and to what extent they may lead to harmful tax competition among countries.
Tax Treaty Override and the Need for Coordination between Legal Systems: Safeguarding the Effectiveness of International Law
Carla De Pietro
Treaty override, which generally concerns international law, has a specific connotation with regard to international tax law. The specific connotation of tax treaty override essentially depends on the structure and functioning of the OECD Model on which tax treaties are commonly based. Thus, a study of tax treaty override, regardless of the classification as a monist or dualist system, necessarily involves, on the one hand, an analysis of the relationship between general international law and international tax law and, on the other hand, an analysis of the relationship between international and national law. The first analysis is directed at understanding the structure of tax treaty override and, therefore, at determining the core of the interpretative process which underlies its detection. The examination of the relationship between international and national law is, instead, functional at evaluating the legitimacy (or illegitimacy) of tax treaty override. It is also important to emphasise that nowadays, very often, the relevant relationship is not only between sources of national and international law, but it necessarily involves – as an additional parameter – EU law. This is true not only for the EU Member States, but also for third countries that conclude international treaties with them, and whose rights could easily be affected by a subsequent change to EU law. In this context, treaty override is the most damaging manifestation of lack of effectiveness of international law, which means lack of legal protection for economic operators – and therefore taxpayers – acting globally. For this reason, the resolution of the issues concerning tax treaty override represents an important step towards a necessary consolidation of the relationship between national, international and EU law. This consolidation will guarantee more certainty of law.
Exposing Unaddressed Issues in the OECD’s BEPS Project: What About the Roles and Implications of Contract Interpretation Law and Private International Law in the Transfer Pricing Arm’s Length Comparability Analysis?
Amir Pichhadze
Through the BEPS Project, the OECD is currently attempting to address the international tax system’s ongoing problems of base erosion and profit shifting. It aims to do so by introducing additional coordinated measures, while also rethinking and improving existing measures. The purpose of this article is to expose an issue that has not been addressed by the BEPS Project, though it is relevant to the Project’s objectives. This issue is the roles that contract interpretation law and private international law necessarily have in the task of delineating the actual controlled transaction when conducting the transfer pricing arm’s length comparability analysis. The article also explains some of the implications of these roles, and proposes measures for reform to address the potential risks involved.
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