Tax Cases Research Articles

Tax Authorities' Burden of Proof and Authority to Investigate Tax Cases

Tax Authorities' Burden of Proof and Authority to Investigate Tax Cases

How Have the Courts Decided What De Minimis is in Tax Law?

This article analyses how South African courts have decided the applicability of the de minimis non curat lex maxim and, more broadly, considered the de minimis concept in tax law. A doctrinal research methodology is employed with the focus on an analysis of predominantly reported judicial decisions. The applicability of the maxim is found to be decisive in only one tax case: the Diageo SA (Pty) Ltd v Commissioner for the South African Revenue Service case of 5 July 2023. Consequently, this study thus also reviews judicial precedent in respect of the applicability of the maxim in other areas of the law with consideration of the relevance to tax law. Further, several tax cases that refer to the broader de minimis concept or to trivial or trifling matters are examined. As there is no one definitive test to determine the applicability of the maxim, the courts have used several factors to guide their determination. Through inductive reasoning, the following conclusions are drawn. (i) In respect of statutory interpretation: First, the primary factor in the determination of the applicability of the maxim is the purpose of the provision. This is aptly demonstrated in the Diageo judgment. Secondly, where the statute sets a clear, objectively verifiable limit or amount, there is essentially no room for the application of the maxim in interpreting the statute. Where, however, no such verifiable basis is provided, a purposive interpretation is paramount – which may in fact require the application of the maxim. (ii) The use of the de minimis concept in tax law appears to depend on whether the matter is one of principle (substance) or practicality (administrability). In the former case, the amount (the factor of extent or value) is irrelevant whereas in the latter, the de minimis concept has been applied.

Aligning working‐class interests and preferences: The case of inheritance tax

AbstractThis article addresses a lack of alignment between the material interests and economic preferences of the working class. It argues that the link between class interest and support for specific economic policies that benefit the working class becomes stronger when it is made clear that the policy targets the rich. Working‐class support for the repealed and unpopular inheritance tax in Norway is chosen as a hard test of this argument. Employing two straightforward survey experiments, this article demonstrates that clarifying who will pay the tax raises support in general and is especially important for ensuring the support of the working class. Further analysis shows that class differences, when the tax is explicitly redistributive, can be accounted for by general redistributive orientation. Additionally, differences in education levels partly explain why clearer class differences in tax support are not observed. This study underscores the importance of considering both the demand and supply sides when examining the economic preferences of social classes and highlights that clearly formulating who pays the tax is crucial for garnering support from working‐class voters.

The Challenge of Challenging Tax Laws as Unconstitutionally Vague

ABSTRACT Many laypersons (and CPAs and attorneys, for that matter) argue that federal tax statutes and regulations are complex, ambiguous, and vague. However, successfully challenging tax law as unconstitutionally vague has generally not been a successful strategy for taxpayers. In this article, we discuss the void for vagueness doctrine as it has been developed and applied in other areas of the law and review over 40 federal tax cases litigated over the last 20-plus years, in which taxpayers claim that a provision is unconstitutionally vague. Although taxpayer wins are rare, some tax cases find that a statute can be declared overly vague before clarifying regulations or other administrative guidance are issued. Regardless, vague tax laws run afoul of principles of good tax policy. We also provide suggestions for taxpayers and their advisors, who may argue in the future that a federal tax provision is unconstitutionally vague.

Comparison of Transfer Pricing methods and their application in disputed tax cases in Indonesian courts

Transfer pricing is a trending topic of taxation in various worlds, not least in Indonesia. Directorate General of Taxation is very aggressive to supervise and monitor the practices of transfer pricing conducted by the taxpayer, because it is not just a case of fictitious tax refunds and tax realtor practices that erode the potential for state revenue from taxes, but the practice of tax evasion in the process transfer pricing is also considered a lot of harm to tax revenue. Transfer pricing practice is actually a common practice and commonly practiced by companies group companies. However, this can be a crucial issue when setting transfer prices is not in accordance with the principle of fairness and business prevalence (PKKU / arm's length principle) which regulated in the Indonesian transfer pricing regulations.. The taxpayer is given the freedom to use their own discretion in deciding the most appropriate method of measuring the transfer price. However, this leads to inconsistencies in the methods applied to arm's length transactions similar by entities from similar industries. Loopholes in this area are vulnerable to tax evasion practices since decades ago. This paper aims to compare the available methods for measurement transfer pricing.

A Simple Tax Case Complicated by Race



Article: Anti-Avoidance Jurisprudence in Direct Taxation: The CJEU Between Politics and Certainty

Over a span of several years, the Court of Justice of the European Union (CJEU) developed a framework for anti-abuse in the context of European law and particularly established criteria for justifying restrictions on the fundamental freedoms in the tax context. In tax cases on anti-avoidance that are more recent, however, the court has demonstrated a notable change in its stance towards this issue that represents a disruption in the consistent development of its jurisprudence on abuse. While the court covers the contradictions in its case law by passing an impression of continuity between disparate decisions, it is remarkable how recent rulings draw from Organisation for Economic Co-operation and Development (OECD) language. This reliance on concepts from a non-EU institution, however, leads to legitimacy concerns. The increasing importance of international organizations and public opinion – for example, in reaction to the Panama Papers – in shaping the international tax landscape is undeniable. While high-profile projects like Base Erosion and Profit Shifting (BEPS) and Global Anti-Base Erosion (GloBE) highlight international tax issues, they also exert political pressure on judicial bodies such as the CJEU which leads to less methodological decisions that will align the court with political interests. In this context, the CJEU’s acting as a political player at the borderline of its competences is to be viewed critically, especially regarding the recent shift in its case law on abuse and tax avoidance that leads to concerns over legal certainty. Anti-abuse principle, anti-avoidance jurisprudence, CJEU, international organizations, international taxation, legal certainty, legitimacy, political influence

Examining Air Travellers’ Willingness to Pay for Non-voluntary Environment-related Fees: The Case of SAF Surcharge and Carbon Taxes

This study aims to investigate air travellers’ Willingness to Pay (WTP) for green premiums, specifically focusing on their contribution to reducing carbon emissions generated by air travel. The research integrates the Theory of Planned Behaviour (TPB) and the Contingent Valuation Method (CVM) to estimate the monetary value that air passengers would be willing to pay for environmental initiatives. The TPB provides a theoretical framework to understand the psychological factors influencing individuals’ intentions and behaviours, while the CVM allows for the estimation of the economic value of environmental goods. Drawing on the TPB, this study examines the influence of attitudes, subjective norms, and perceived behavioural control on air travellers’ WTP for green premiums, while considering the determinants and barriers related to ecological goods, and sustainable consumption. The study investigates the potential economic implications of air travellers’ willingness to pay for green premiums, particularly in the context of sustainable aviation fuel options and carbon-related fees. The findings of the survey of a sample of 248 respondents suggest a general willingness among passengers to pay for environmental premiums, notably carbon taxes, with variations in WTP influenced by demographics, travel preferences, environmental values, and awareness. Notably, younger travellers exhibit the highest WTP which is negatively related to the air ticket price. Higher environmental consciousness correlates with greater WTP. The impact of price perception and perceived efficacy of environmental initiatives were also found significant. Financial constraints and scepticism about the credibility of such premiums, however, limit some passengers’ willingness to contribute.

The Renewed Case for a Financial Transaction Tax

The Renewed Case for a Financial Transaction Tax

Towards a low-carbon and low-risk community: Risk-constrained optimization of energy pricing in electricity and gas networks with flexible carbon-responsive loads

This paper proposes carbon-based nodal pricing, which utilizes carbon-tracing analysis in its structure. The carbon-tracing algorithms enable the independent system operator (ISO) to better manage and establish a fair pricing mechanism, considering the actual contribution of each plant to the network's total daily emissions. The ISO, by utilizing carbon-tracing analysis, can easily compute nodal carbon intensity and branchial carbon flow, which are used in nodal pricing analysis. Furthermore, in this paper, for motivating flexible consumers, especially those who have higher impacts on carbon emissions, a carbon-based incentive framework called the flexible carbon-responsive (FCR) program is established, which helps the consumers control their carbon output and enables the ISO to decrease the network's total carbon emissions. In the proposed structure, the worst-case scenarios, which arise from uncertain parameters, can easily affect the simulation results. As a result, in order to avoid such issues, analyzing risks associated with uncertainty is the next focus of this research, and the downside risk constraints (DRC) approach is used to accomplish so. The DRC technique helps the ISO achieve an appropriate balance between the cost associated with risk and the anticipated cost, with the simultaneous objective of minimizing overall risk. Last, a modified IEEE 24-bus transmission system and the IEEE 20-bus gas network are utilized to evaluate the suggested carbon-based pricing mechanism. The simulation results show that applying the FCR program and carbon-based pricing causes the total operation costs to decrease by 100%, resulting in an increase of only 0.71% under the proposed DRC method. It could be noted that the total operation cost increment in the with-carbon tax case is 0.18% lower compared to the no-carbon tax policy.

Proportionality Principle in the CJEU Judgments on Tax Cases

Proportionality Principle in the CJEU Judgments on Tax Cases

Sugar-Sweetened Beverage Tax: A Crucial Component of a Multisectoral Approach to Combating Non-Communicable Diseases in Nigeria

Abstract There has been a significant increase in the burden of noncommunicable diseases (NCDs) in Nigeria in the last few decades. These diseases, such as diabetes and cardiovascular diseases, have become a major public health concern, contributing significantly to morbidity and mortality rates in the country. The consumption of Sugar-Sweetened Beverages (SSBs), including soft drinks, energy drinks, and fruit juices, has been identified as one of the major drivers of the rising trend of NCDs. This is because SSBs are high in free sugars, which are known to be associated with an increased risk of NCDs. This narrative review explored the probable role of SSB consumption in the growing burden of NCDs in Nigeria and made a case for an effective SSB tax as a major public health intervention to reduce SSB consumption and the associated burden of NCDs.

Editorial: We Need to Know When Previous Case-Law Has Been ‘Overruled’! - A Plea for More Legal Certainty in EU Tax

In its recent judgment inW AG the Court of Justice of the European Union (CJEU) fundamentally departed in substance from earlier case-law concerning the treatment of ‘final losses’ incurred by foreign permanent establishments. However, like in other tax cases before, the Court did not clarify that previous decisions (in particular, Lidl Belgium) are ‘overruled’ now. This causes unnecessary damage to legal certainty in the area of EU tax law, and the CJEU should reconsider this approach towards ‘overruling’ in future cases. Furthermore, situations of ‘overruling’ also deserve special attention within the framework of the current reform of the preliminary ruling system. overruling, legal certainty, direct taxation, final losses, Marks & Spencer doctrine, preliminary ruling, Court of Justice, General Court, Grand Chamber, CJEU Statute, CJEU Rules of Procedure

Recent Developments in Indiana's Tax Case Law: Survey 2022

Recent Developments in Indiana's Tax Case Law: Survey 2022

Pelatihan Pelaporan SPT Pemilik UMKM di Kelurahan Sendangguwo Kota Semarang

MSMEs have an important role in a country's economy because of their contribution to economic growth, job creation, innovation, and community empowerment. The establishment of Micro, Small and Medium Enterprises (MSMEs) creates an obligation in the field of taxation. Businesses or business owners are obliged to pay taxes and submit notification letters. The problem that often occurs is that MSME actors do not fully understand tax obligations, including the obligation to submit SPT reports. Non-compliance with these obligations will result in sanctions for MSMEs. Administrative fines will be given when MSMEs are late or do not submit Periodic and Annual Tax Returns. The service team then carries out community service activities as a solution to the problems faced by MSME actors. The method used in this PKM is lecture, practice and discussion with a participatory approach. The lecture is carried out online with the meeting application. The practice is carried out by utilizing online SPT form technology with examples of various tax cases in the MSME environment. Discussions with MSME actors aim to develop new skills and approaches in solving problems encountered in SPT reporting. After the SPT reporting training activity in Sendangguwo Village, Tembalang District, MSME actors became more aware and were able to fill out SPT properly.

Obstacles to tax accounting in digital currency trading in Iraq (Case Study)

The research aims to study the obstacles of tax accounting in trading digital currencies in Iraq, and the mechanism of tax accounting by reviewing some international tax systems, where the research sample was chosen to include a number of employees (the General Authority for Taxes, and those interested in trading digital currencies), and a questionnaire was developed and distributed to A sample of (90) individuals, male and female, of various academic qualifications, from which (86) questionnaires valid for analysis were retrieved. In order to process the data, a set of statistical methods were used, most notably the arithmetic mean, standard deviation, correlation coefficient (spearman) and regression coefficient using the statistical program (spss). The research concluded that there is a correlation and a positive impact of the obstacles of tax accounting on the trading of digital currencies, but the most prominent recommendations are the need to reconsider the income tax law No. By taking advantage of the global tax systems to deal with cases of tax accounting for such transactions in the future.

Analysis of Gift Tax Cases Involving Gifts of Unlisted and Unregistered Stocks

Analysis of Gift Tax Cases Involving Gifts of Unlisted and Unregistered Stocks

Policy Note: Beyond the 2-Pillar Solution: A Case for a Global Income Tax and the Creation of the International Tax Organization

Policy Note: Beyond the 2-Pillar Solution: A Case for a Global Income Tax and the Creation of the International Tax Organization

Tax evasion on lawful income: is it a form of money laundering?

PurposeThe purpose of this study is to determine whether income tax evasion also constitutes money laundering if Financial Action Task Force (FATF) Recommendations are strictly applied, including cases where an offender evades tax on lawful income.Design/methodology/approachApply FATF conditions for money laundering to the tax evasion facts in United States v. Walter Anderson. In this case, the USA alleges that Anderson attempted to evade $200m of taxes on lawful income.FindingsAnderson’s tax evasion actions met all the FATF’s conditions for money laundering. FATF Recommendations imply that tax evasion, even on lawful income, is a form of money laundering. Tax evasion produces criminal tax savings and simultaneously launders those criminal proceeds.Practical implicationsThe FATF effectively classified all tax evasion as money laundering when it designated tax evasion among predicate offenses thereto. The FATF stopped short of explicitly stating this result. The FATF should seriously consider taking the next step: formally recognize tax evasion as one form of money laundering, and thus codify a single crime that covers both offenses. A single-crime approach may be unfamiliar to prosecutors, but it could enable a more effective multiagency approach to fighting financial crime. It could simplify prosecution, eliminate overlapping statutes and reduce concerns over double jeopardy.Originality/valueTo the best of the authors’ knowledge, this is the first tax case analysis to indicate that tax evasion completely incorporates money laundering within the FATF framework.

The Uneasy Case for a Ransom Tax

AbstractThe goal of our paper is to demonstrate the potential effects of a tax on paying a ransom on the incentives of stakeholders involved: both the perpetrators (the attackers placing the ransomware) as well as the potential victim. We do think that there is a case for a ransom tax, but we do also realise that it is not easy to make that case, and hence we express this doubt in our title. A tax could stimulate ex ante cybersecurity and also (when price elasticity is not too low) reduce ex post ransom payments. In addition, a tax in combination with a smartly designed subsidy could have benefits.