May 2017  
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Issue No. 2 - 2017 of the World Tax Journal is now available online.

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Number 2 - 2017 contains the following:

Tax Confidentiality: A Legislative Proposal at National Level

Anna-Maria Hambre

This article deals with national legislation concerning tax confidentiality in terms of public access to information on individual taxpayers held by national tax authorities. It ends in a proposal for legislation – a requirement of damage, which is to be applied when individuals request tax information about other taxpayers held by the tax administration. In short, the requirement of damage is constructed so that, for confidentiality to apply, there must in the particular case be a likelihood of damage occurring upon disclosure. A tax confidentiality rule holding a requirement of damage thus provides neither total confidentiality nor full transparency. Instead, it provides a case-by-case balancing of interests – a damage assessment – to determine whether the requested information should be confidential or could be disclosed. This means that all of the requested information may be subject to possible disclosure, limiting the information decided beforehand to be confidential, thus widening the scope of transparency and the right to information. Tax confidentiality – or tax transparency – and the proposed requirement of damage are considered from different viewpoints, such as the principle of maximum disclosure, the scope of accessibility and the scope of accessible information. Furthermore, the article evaluates the proposal with the use of a theoretical framework holding three different benchmarks: tax compliance, administrative costs for the tax administration and taxpayer privacy. It is argued that a requirement of damage facilitates public access to information and thus should provide benefits in terms of the level of taxpayer compliance, but at the same time recognizes that full disclosure in every situation may not be appropriate due to, for instance, the interest of protecting taxpayer privacy.

Taxing Robots? From the Emergence of an Electronic Ability to Pay to a Tax on Robots or the Use of Robots

Xavier Oberson

This paper considers that granting a legal personality to robots could lead to the emergence of an electronic ability to pay, which may be recognized for tax purposes. As a consequence of such a development, a specific tax personality would need to be granted to robots. This would require a clear definition of robots, which could be based on the use of artificial intelligence, combined with a sufficient level of autonomy. From the perspective that smart robots may now replace inherent human activities, such as the interaction, learning and decision-making processes, the potential implications of a tax on robots, or on the use of such robots, is considered. The possibility of an income tax on an imputed salary from robots’ activities, or on other income, is also considered. Initially, the economic capacity to pay the tax should still be attributed to the employer or owner of the robots. Later, when technology allows, an ability to pay to robots may be recognized. Initial comments on the application of the value added tax on robots’ activities (transfer of goods and services), as well as international tax issues (notably tax treaty aspects) are also expressed, but would be the subject of further study from a global and international perspective.

Profit Attribution to Dependent Agent Permanent Establishments in a Post-BEPS Era

Raffaele Petruzzi and Raphael Holzinger

The overall topic of profit attribution to dependent agent permanent establishments is a highly complex issue. Various aspects are controversially discussed in literature. From a general perspective, article 7 and article 9 of the OECD Model are both fundamentally based on the arm’s length principle, which was initially established in the early 1930s in order to properly account for profit attributions within MNEs. Since its beginnings, the arm’s length principle(s) under article 7 and article 9 of the OECD Model have evolved over time. In this respect, especially the OECD’s work under the Authorised OECD Approach, BEPS Action 7 as well as under BEPS Actions 8-10 have eventually minimized, or even closed the gap between, the principles of profit attribution under article 7 and article 9 of the OECD Model. This article will analyse the topic of profit attribution to dependent agent permanent establishments, thus dealing with the question as to whether or not different results could/should arise when applying article 7 and article 9 of the OECD Model in a post-BEPS era.

Abuse and Aggressive Tax Planning: Between OECD and EU Initiatives – The Dividing Line between Intended and Unintended Double Non-Taxation

Félix Daniel Martínez Laguna

Is it possible to talk accurately about unintended double non-taxation and aggressive tax planning from an international perspective? Do they have an international meaning? The aim of this contribution is to clarify the meaning of unintended double non-taxation and aggressive tax planning in the international debate. When it comes to intentions, this contribution proposes splitting the concept of double non-taxation into proper double non-taxation and twice non-taxation. Proper double non-taxation provides the dividing line between intended and unintended double non-taxation at treaty level. The parallel exercise of sovereignty by different states leading to non-taxation from a domestic perspective and then to double non-taxation across borders relates to twice non-taxation, situations where it is not possible to infer intentions in the abstract out of that very outcome. One of the main conclusions of the article lies on the national nature of the concepts of aggressive tax planning and unintended double non-taxation present in the international tax debate and the relation between them, denying their international character. Aggressive tax planning is defined by those domestic and treaty measures that identify and deter those outcomes that are considered non-acceptable or unintended in advance, where avoidance is not present whatsoever. This contribution grounds its conclusions through the analysis of double non-taxation stemming from sovereignty and the confrontation of state behaviour and taxpayer behaviour with respect to the relevant outcome of double non-taxation, paying great attention not only to tax planning and avoidance but also to tax competition.

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