Introduction to the Law of Double Taxation Conventions, 3rd edition

✍ Scribed by Michael Lang

• Publisher: IBFD
• Year: 2021
• Tongue: English
• Leaves: 260
• Edition: 3
• Category: Library

✦ Synopsis

Cross-border activities or transactions may trigger tax liability in two or more jurisdictions. In order to mitigate the financial burden resulting from these situations, states have entered into numerous double taxation conventions, which provide for rules that allocate the taxing rights between the contracting states. This book provides an introduction to the law of double taxation conventions. Although principally aimed at students, irrespective of their national background, the book will be of value to tax experts who wish to learn more about double taxation conventions, as well as international law experts who wish to gain a better understanding of tax law. The book does not consider one jurisdiction in particular, but rather takes examples from a wide range of different countries and their jurisdictions. It includes an overview of the problem of double taxation, the state practice in the conclusion of double tax conventions and their effects, the interpretation of double taxation conventions and treaty abuse. This revised edition takes into account new developments that have occurred since the previous edition of 2013, in particular the changes through OECD’s BEPS Project and the Multilateral Instrument. It deals with the latest versions of the OECD Model Tax Conventions on Income and on Capital and the UN Model Double Taxation Convention between Developed and Developing Countries (both published in 2017), as well as the latest version of the OECD Model Double Taxation Convention on Estates and Inheritances and on Gifts.

✦ Table of Contents

Cover
Title
Copyright
Preface
Preface to the first edition
List of abbreviations
Literature cited in the text
List of court cases
1. The problem of double taxation
1.1. Basics of international law
1.2. Circumstances giving rise to double taxation
1.2.1. Taxation of worldwide income (full tax liability) in two states
1.2.2. Full tax liability and limited tax liability
1.2.3. Limited tax liability in two states
1.2.4. Economic double taxation
1.3. Elimination of double taxation
1.3.1. Double taxation conventions
1.3.2. Unilateral measures
2. State practice in the conclusion of DTCs
2.1. Conventions in international law
2.2. The importance of model conventions
2.3. The importance of the OECD Model
2.4. Bilateral peculiarities
2.5. Bringing the Tax Treaties in Line with the OECD Model
3. The effects of DTCs
3.1. The allocation of taxing rights
3.2. The limiting effects of DTCs
3.3. The relationship to domestic law
3.3.1. Implementation of DTCs into domestic law
3.3.2. Priority of DTC law
3.3.3. Priority of domestic law
3.3.4. What to consider first in practice: DTC or domestic law?
4. The interpretation of double taxation conventions
4.1. Principles of interpretation in international law
4.2. The use of principles of interpretation stemming from international law with respect to DTCs
4.2.1. Autonomy of DTC law
4.2.2. The importance of domestic law
4.2.3. The importance of the OECD Model and its Commentary
4.2.4. The importance of changes in the OECD Model and its Commentary
4.2.5. The importance of OECD reports
4.2.6. The importance of administrative practice
4.2.7. The importance of other countries’ court decisions
4.3. The importance of interpretation rules set out in DTCs
4.3.1. Art. 3(2) OECD Model
4.3.2. The binding qualification of the source state according to Art. 23(1) OECD Model
4.3.3. The relevance of later commentaries
5. Treaty abuse
5.1. Denial of treaty benefits
5.2. The application of domestic anti-abuse principles?
5.3. The application of abuse rules of international law?
5.4. Art. 29(9) OECD Model – The Principal Purpose Test
6. The structure and system of DTCs
6.1. Applying the convention
6.2. Persons covered
6.3. Taxes covered
6.4. Allocation rules
6.5. Methods for elimination of double taxation
7. Persons covered
7.1. Full tax liability as a prerequisite for the application of the DTCs
7.1.1. Full tax liability
7.1.2. Effects of the DTC non-discrimination rules
7.1.3. Effects of other DTCs
7.2. Treaty entitlement of corporate entities that are subject to limited tax liability
7.2.1. Public law corporations
7.2.2. Corporate entities that are exempt from full tax liability
7.3. Treaty entitlement of partnerships and/or partners
7.4. Treaty entitlement and limitations
7.5. Residence state in the case of dual residence
7.5.1. Necessity of determining the residence state
7.5.1.1. Allocation rules
7.5.1.2. Method article
7.5.2. Criteria
7.5.2.1. Permanent home
7.5.2.2. Centre of vital interests
7.5.2.3. Habitual abode
7.5.2.4. Nationality
7.5.2.5. Mutual agreement procedure
7.5.2.6. Place of effective management
8. Taxes covered
8.1. Taxes on income
8.2. Taxes on capital
8.3. Comparability
8.4. Inheritance and gift taxes
9. Allocation rules
9.1. Income from immovable property
9.1.1. Immovable property
9.1.2. Allocation of taxing rights
9.2. Business profits
9.2.1. Profits of an enterprise
9.2.2. Allocation of taxing rights
9.3. International shipping and air transport
9.3.1. International shipping and air transport
9.3.2. Allocation of taxing rights
9.4. Dividends
9.4.1. Dividends
9.4.2. Allocation of taxing rights
9.5. Interest
9.5.1. Interest
9.5.2. Allocation of taxing rights
9.6. Royalties
9.6.1. Royalties
9.6.2. Allocation of taxing rights
9.7. Capital gains
9.7.1. Alienation
9.7.2. Allocation of taxing rights
9.8. Independent personal services
9.8.1. Independent personal services
9.8.2. Allocation of taxing rights
9.9. Income from employment
9.9.1. Income from employment
9.9.2. Allocation of taxing rights
9.10. Directors’ fees
9.10.1. Directors’ fees
9.10.2. Allocation of taxing rights
9.11. Entertainers and sportspersons
9.11.1. Entertainers and sportspersons
9.11.2. Allocation of taxing rights
9.12. Pensions
9.12.1. Pensions
9.12.2. Allocation of taxing rights
9.13. Government service
9.13.1. Government service
9.13.2. Allocation of taxing rights
9.14. Students
9.14.1. Payments to students and business apprentices for their maintenance, education or training
9.14.2. Allocation of taxing rights
9.15. Other Income
9.15.1. The concept of “other income”
9.15.2. Allocation of taxing rights
9.16. Taxation of capital
9.16.1. Capital
9.16.2. Allocation of taxing rights
10. Methods for elimination of double taxation
10.1. The importance of the method article
10.1.1. Relation to the allocation rules
10.1.2. Credit and exemption method
10.1.3. Switch-over clauses
10.1.4. No effect of the method articles
10.2. Exemption method
10.2.1. Effects
10.2.2. Exemption from tax base
10.2.3. Progression
10.3. Credit method
10.3.1. Effects
10.3.2. Amount of allowable tax
10.3.3. Maximum credit
11. The implementation of treaty benefits in both contracting states
11.1. Source state
11.2. Residence state
11.3. The importance of the evidence of taxation in the other contracting state
12. The arm’s length principle of Art. 9 OECD Model
13. Non-discrimination
13.1. Scope of application of non-discrimination rules
13.2. Non-discrimination on the grounds of nationality
13.3. Non-discrimination on the grounds of the PE of an enterprise
13.4. Non-discrimination according to Art. 24(4) OECD Model
13.5. Non-discrimination in connection with the shareholders/partners of a company
14. Mutual agreement procedure
14.1. Mutual agreement procedure
14.2. Consultation procedure
14.3. Arbitration procedure
15. Exchange of information
15.1. Scope of application of the exchange of information
15.2. Types of exchange of information
15.3. Limitations on the exchange of information
15.4. Competence and obligation of secrecy
16. Assistance in the collection of taxes
17. Inheritance tax treaties
17.1. Structure
17.2. Scope of the convention
17.3. General definitions
17.4. Allocation of taxing rights
17.5. Special provisions
Annex 1: OECD Model Convention with Respect to Taxes on Income
and on Capital (2017 update)
Annex 2: United Nations Model Double Taxation Convention Between
Developed and Developing Countries (2017 update)
Annex 3: OECD Model Double Taxation Convention on Estate and
Inheritances and on Gifts (1982 update)
Annex 4: OECD/G20 (MLI) Multilateral Convention to Implement
Tax Treaty Related Measures to Prevent Base Erosion and
Profit Shifting (2016)
Index