Ways of Restricting the Rights of Taxpayers Under Agreements for the Avoidance of Double Taxation in National Legislation

Alexander Georgievich Gurinovich,Alexey Evgenievich Ivanov,Marina Afanasyevna Lapina

doi:10.1177/2158244020968077

Alexander Georgievich Gurinovich, Alexey Evgenievich Ivanov + Show 1 more

Open Access

https://doi.org/10.1177/2158244020968077

Copy DOI

Abstract

The article analyzes the situations that might limit the rights of a taxpayer under double taxation avoidance agreements. Because of the analysis of the national legislation in the area of taxation, significant differences that lead to the emergence of controversial situations regarding double taxation are revealed. The general analysis of the basic concepts of legal regulation using Russian and foreign sources regarding restrictions on the exercise of taxpayer rights under double taxation avoidance agreements, principles and mechanisms in national legislation is carried out. Because of studying the terms of individual agreements on avoidance of double taxation to test the admissibility of applying national legislation, significant differences in the approaches of different countries and examples of law enforcement based on judicial practice are analyzed. The novelty of the article is the justification of the necessity of establishing the basic principles upon restricting taxpayer rights under double taxation avoidance agreements in national legislation. The practical significance of the work lies in identifying the role of mutual agreement procedures between the competent authorities of the contracting parties under double taxation avoidance agreements, as well as in stating recommendations on the practical application of the rules regarding the limitation of taxpayer rights under double taxation avoidance agreements. System analysis, expert analysis, event analysis, traditionally legal methods (formal and logical, comparative legal), structural analysis, and modeling research methods are used.

Highlights

The characteristic features of the world economy at the present stage of its development, which Rünger et al (2019) highlighted when studying the problems of taxation of investors, are the increasing role of international corporations, and as a result, the growth in the volume and speed of cross-border movement of production and human resources and capital
Article 27 of DTT Russia and Hong Kong established the following: “nothing in this Agreement restricts the right of each Contracting Party to apply its national legislation and measures against tax evasion, regardless of whether they are mentioned or not in the Agreement” (Draft Agreement between the Governments of Russia and Hong Kong on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, 2015)
The following can be noted: (1) As a general rule, the rights of the taxpayer under the DTT, the consent of the obligation of which was expressed by the state in the prescribed manner, should take precedence over the obligations of the taxpayer under the national tax law, as they cannot refer to the provisions of their domestic law to justify non-compliance with the provisions of the DTT

Summary

Introduction

The characteristic features of the world economy at the present stage of its development, which Rünger et al (2019) highlighted when studying the problems of taxation of investors, are the increasing role of international corporations, and as a result, the growth in the volume and speed of cross-border movement of production and human resources and capital. The institution of the tax sovereignty of states preserves its existence, and each state continues to conduct independent tax policies Together, these two factors lead to the fact that there are often disputes related to international legal double taxation (hereinafter referred to as “double taxation”) in the field of taxation between national legal systems. These two factors lead to the fact that there are often disputes related to international legal double taxation (hereinafter referred to as “double taxation”) in the field of taxation between national legal systems In this respect, currently double taxation treaties (hereinafter referred to as “DTT”) concluded between states and individual territories are one of the key tools in the process of globalization of international economic relations and regulation of international trade.

Objectives

Methods

Results

Conclusion