Concept Of Beneficial Ownership Research Articles

THE CONCEPT OF BENEFICIARY PROPERTY IN CIVIL LAW AND ITS CHARACTERISTICS

In this article, the concept of beneficial ownership in civil law and the basis of its creation, determining its legal essence, harmonizing the rules of the application of this institution in Anglo-Saxon law with the continental legal system, clarifying the civil legal status of beneficial ownership, as well as creating the legal basis of this type of property , scientific research of the use of beneficiary property in different legal systems and its role in the system of obligations and legal basis for practice and improvementof the regulatory legislation of these relations are highlighted.The essence of this legal institution is determined primarily by protecting the interests of owners and expanding the possibility of realizing their property rights.

Beneficial Ownership in International Taxation and Biosemantics – Why a Redundant, Paradoxical and Harmful Concept Can Be a Potent Weapon in the Hands of the Tax Authorities

This article argues that the concept of beneficial ownership supports an income allocation function more than an anti-abuse one. It then demonstrates that the concept is redundant, paradoxical and harmful, and that it would be better to discard it. Finally, the article uses biosemantics to explain the concept.

CRIMINAL ACCOUNTABILITY FOR CORPORATE CONVICTS IN SPATIAL PLANNING CRIME: HE CONCEPT OF BENEFICIAL OWNERSHIP (BO)

The aim of the research is to learn more about the concept of beneficial ownership (BO) as an approach for criminal liability in lieu of spatial planning crimes for corporations that lack assets or corporations that can only pay a portion of the crime. Several regions of the Unitary Republic of Indonesia have experienced widespread violations of spatial planning, according to some experts, as a result of substantive weaknesses, including the UUPR’s criminal sanction system’s philosophical, theoretical, and legal flaws, particularly its criminal sanctions for corporations. Theoretically, several theories of corporate criminal responsibility have not been able to reach corporate convicts in spatial planning crimes. The research method uses normative juridical methods. This research method is a legal research method that bases its analysis on applicable laws and regulations that are relevant to the research topic. The results of the study show that the UUPR on corporate criminal sanctions is incomplete, and the formulation of the norms does not address substitute punishment for corporate criminals who lack assets or who can only afford a part of their sentence. The UUPR’s corporate criminal sanctions were not functional as a result of the incompleteness of the norms’ formulation, preventing the achievement of the law’s goals. The term “beneficial ownership” (BO) refers to natural persons who ultimately own or control (ultimately owns or controls) clients and/or people whose transactions are executed on their behalf. The BO concept and regulations regarding BO transparency indicate that it can be used as an approach to reach alternative criminal liability for corporations. In terms of philosophy, the BO concept is consistent with the goal of criminal punishment for corporations; specifically, by imprisoning the actual beneficiary, the payment of the penalty can be used to return the space’s damage to its original state, or at the very least, it can have a deterrent effect on those who use the space in an improper manner. So, for the Ius constituendum it is proposed to formulate criminal norms in lieu of fines for corporations by expanding accountability through the beneficial ownership (BO) concept approach.

Trends in development of the beneficial ownership concept in Russian case law

Abstract As the concepts of trust and beneficial ownership are unknown in Russian civil law, legal practitioners frequently encounter difficulties while they try to recognise and enforce the rights of beneficial owners or their creditors. The study analyses the main approaches to understanding of beneficial ownership in the private law of the Russian Federation. It has been concluded that due to the lack of normative regulation, the concept of beneficial ownership is understood through the lens of public law regulations: tax as well as anti-money laundering and countering the financing of terrorism legislation in most court decisions. The author also suggests some solutions to resolve the issues.

Beneficial Ownership in the Sharī‘ah and Modern Law: A Case of Sovereign and Quasi-Sovereign Ijārah Ṣukūk Structures in Pakistan, Bahrain, and Malaysia

The concept of beneficial ownership has been used extensively in sovereign and quasi-sovereign ijārah ṣukūk structuring. This paper aims to examine the concept of beneficial ownership in the light of Islamic jurisprudence, common law and civil law systems. It overviews the laws related to beneficial ownership in the Pakistani, Bahraini, and Malaysian legal regimes. It further carries out the Sharīʿah appraisal of beneficial ownership focusing on its chief characteristics. The findings of this study posit that the legal status of ownership as per the Sharī‘ah is a need-based phenomenon and not a mandatory requirement. Hence, if a particular transaction complies with the ahkam (commands) for milkiyah and tamlikat (ownership), then transfer of ownership is a compulsory element for sale consequences. Moreover, it also explains that the use of beneficial ownership in sovereign and quasi-sovereign ijārah ṣukūk structures is acceptable in principle because the valid sale transaction that occurs transfers the ownership to the latter. Hence, it is described in ṣukūk prospectuses as ‘beneficial interest’. Finally, it may also be justifiable in the context of of ḥurīat al-taṣarruf (right to dispose-off the asset) and ‘qualified ownership’.
 Keywords 
 Beneficial Ownership (BO), Ijārah Sukūk (IS), Legal Title (LT), Sharī‘ah Appraisal (SA) 

Beneficial Ownership in Sharī‘ah and Modern law: A case of Sovereign and Quasi-Sovereign Ijārah Ṣukūk Structures in Pakistan, Bahrain, and Malaysia

The concept of beneficial ownership has been tremendously used in the sovereign and Quasi-sovereign ijārah ṣukūk structuring on a mega scale. This paper aims to examine the meaning of beneficial ownership and its recognition in the light of classical and modern Islamic jurisprudence. It overviews the laws related to beneficial ownership in the Pakistani, Bahraini, and Malaysian legal regimes, and further elaborates Sharīʿah appraisal of beneficial ownership focusing on its characteristics in Sharīʿah. The findings of this study present that the legal status of ownership as per Sharī‘ah is a need-based phenomenon and not a mandatory requirement. Hence, if the transaction fills the ahkam (commands) for milkiyah and tamlikat (ownership) then the transfer of ownership is a compulsory element for the sale consequences. Moreover, it also explains that the use of beneficial ownership in sovereign and quasi-sovereign ijārah ṣukūk structures is acceptable in principle because the valid sale transaction that occurs between the originator and SPV effectively transfers ownership to later, as it is described in ṣukūk prospectuses as ‘beneficial interest. Finally, it may also be justified in the context of hurriyat al-tasurruf (right to dispose-off the asset) and ‘qualified ownership’.
 Keywords 
 Beneficial ownership, legal title, ijārah ṣukūk, Sharī‘ah appraisal

EU Beneficial Ownership Further Developed: A View from a Different Angle

In this contribution, the author tries to further develop the EU beneficial ownership concept for the exemption from withholding tax for EU intragroup interest and royalties and to distinguish this concept from the principle of EU law on the prohibition of abuse. The issue is examined from several different angles than available in the literature at present. Among other things, inspiration is drawn from VAT case law in which several comparable issues regarding the concept of beneficial ownership were discussed. The author comes to the conclusion that the beneficial ownership concept is a conditional, dynamic EU concept inspired by the Commentary on the OECD Model and that for EU intragroup dividends, there is no explicit and implicit beneficial owner requirement for the application of the exemption from withholding tax. The EU concept of “beneficial owner” concerns not a formally identified recipient but rather the entity that benefits economically from the payment received and accordingly has the power freely to determine the use to which it is put. This economic interpretation is independent of the question whether, in a certain case, there is abuse of law. Under this economic interpretation, the Court of Justice of the European Union (ECJ or the Court) takes into account formal contractual or legal obligations to pass on received payments. This is confirmed in the VAT case law, in which similar issues arose. It can also be concluded from VAT case law that the ECJ will, in all likelihood, take into account (implied) contractual pass-on obligations. In addition, there must be a current and direct obligation to pass on the payment on the basis of a formal or implicit legal or contractual obligation.

INTERNATIONAL TAX POLICY OF KAZAKHSTAN

The purpose of this article was to study the international aspects of taxation in Kazakhstan. What is relevant for Kazakhstan is that the country implements international standards in its national legislation, for example, the BEPS plan, information exchange, etc. In addition to the implementation of the 15 Actions of the BEPS plan, the country implements some special anti-avoidance rules (SAAR), for example, the transfer pricing rule, the thin capitalization rule, beneficial ownership concept, etc. In order to improve the international tax policy of Kazakhstan, the country needs to continue to implement all the Actions of the BEPS plan, conclude tax treaties, introduce general (GAAR) and targeted anti-avoidance rules (TAAR) into its legislation.

Beneficial Ownership Transparency: The Viability of Global Implementation of G20 High-Level Principles

The concept of beneficial ownership originally came from dual ownership regime which allows the division of legal and beneficial ownership, serving good economic functions, i.e. protection of family property and personal privacy. However, as dual ownership structures, e.g. trust, have been abused to such an extent that the transparency now outweighs the economic values of dual ownership, at least for most developed economies of the world. The G20 High-Level Principles on Beneficial Ownership Transparency thus came into being, pushing forward an agenda for changing the law globally to make the identities of the beneficial owners transparent, with a broader term of beneficial ownership than its original use in trust law. In this paper, we argue that these Principles, made by and serving the interests of small exclusive group of developed countries, could not be applied universally as the rule-takers, i.e. developing countries, do not share the same concern as the developed world and are unwilling to counter a problem they did not consider as a priority. Under the pressure of robust review mechanisms and name-and-shame strategy deployed by FATF and relevant international financial bodies, the rule-takers are forced to make relevant changes, but the changes will just be artificial and superficial to bypass the Principles prescribed and recommended by the rule makers who are not themselves taking a serious step to implement them. Legal and beneficial ownership, money laundering, transparency, G20, developed and developing economies, divergence of priorities.

Trusts and beneficiary ownership concept in Russian law and practice

Abstract This article outlines the regulatory landscape of the use of trusts by Russian residents and the implementation of the concept of beneficial ownership by the Russian legal system. The researcher describes an attempt to introduce trusts into the Russian legal system. The article also deals with trusts created by Russian residents abroad. In addition, the approaches of the Russian courts to the beneficial ownership concept, in the context of trusts and offshore companies are also discussed. The author analyses a number of cases which shed light on the issue of recognition of beneficiary owners’ rights in Russia.

Uncovering Russian trust management agreements: not an alternative to Russian private foundations

Abstract A Russian trust management arrangement is a contract for managing third party assets and cannot be mirrored with common law trusts since Russian law is not familiar with the concept of beneficial ownership. Russian trust management agreements are mainly used for managing portfolios of securities by regulated Russian asset managers, for managing Russian real estate and for the short-term management of assets falling into the estate of a deceased person during the probation period. Not suitable for exclusive succession planning purposes, trust management thus cannot be an alternative to Russian hereditary foundations which were specifically launched in Russian law in 2018 as post-mortem local foundations, and whose use remains to be seen in practice.

Beneficial Ownership Transparency: Accomplishment and obstacles

The study aims to review beneficial ownership transparency and its importance in combating corruption and tax abuses. The concept of beneficial ownership and the risk of opacity are discussed. Normative achievements regarding BO are exposed in international agreements. The main challenges are identified, namely: i) the establishment of open central registers, ii) the implementation of automatic mechanisms for the exchange of information, iii) the requirement of standardization and verification of information, and iv) the commitment of the governments for the dissemination and access of this information to potential interested in combating the offenses perpetrated using anonymous companies.

Critical analysis of beneficial ownership in mushārakah based home financing in Malaysia

PurposeThis paper critically aims to examine the concept of beneficial ownership and its application in musharakah-based home financing.Design/methodology/approachThe study applies the method of juristic interpretation in analyzing the meaning of beneficial ownership in legal documentation of musharakah-based home financing. This qualitative study uses content analysis approach that investigates the works of Islamic scholars on the concept of ownership and evaluates the concept of beneficial ownership in musharakah-based home financing from the Islamic perspective.FindingsThe result finds that beneficial ownership is considered a true ownership, as Shari’ah allows the transfer of ownership based on the offer and acceptance in a contract. Furthermore, the absence of legal registration does not mean the absence of true ownership, whereas all documentations and agreements have clearly stated rights and liabilities of each contracting parties.Originality/valueThis paper provides a fiqhi discussion of analyzing beneficial ownership in musharakah-based home financing. It shows that Shari’ah parameters are essential for the use of beneficial ownership to ensure its compliance with the Shari’ah requirements of milkiyyah (ownership).

Transparency of Asset and Beneficial Ownership Information

The goal of this paper is to describe the concept and explain the importance of beneficial ownership transparency, the evolution of relevant international standards and practices, and finally to propose recommendations on how to achieve better frameworks to tackle tax avoidance and evasion, corruption and money-laundering. The paper is based on relevant publications, especially by international organizations (e.g., the Financial Action Task Force) as well as the author’s previous research relating to analyzing loopholes in the beneficial ownership frameworks of more than 100 jurisdictions. The section 2 of this paper will explain the concept of beneficial ownership and the importance that information about beneficial ownership has for country authorities trying to promote accountability and financial integrity. Section 3 will review the standards currently in place for maintaining beneficial ownership information, their implementation, and the gaps in the current system. Section 4 will discuss the availability of beneficial ownership information across borders and discuss the mechanisms for country authorities to obtain information on assets outside their own jurisdiction. It will also inform on the impediments to implementation of existing systems as well as gaps in the system. Section 5 will turn to proposals for addressing the gaps, vulnerabilities and impediments that have been identified.

Beneficial Ownership Interpreted, To What Extent Are the OECD and the EU on the Same Wavelength?

The interpretation of the concept of ‘beneficial ownership’ in the field of cross-border taxation is the subject of dispute among the international community. From 1977 onwards, a major question is how beneficial ownership should be defined for tax treaty purposes. After the concept of beneficial ownership was included in the EU’s Interest and Royalties Directives, the same question arose for the interpretation of the concept from an EU perspective. The authors examined both the Organisation for Economic Cooperation and Development (OECD) and EU concepts separately from a historical and teleological perspective and attempted to find common grounds for interpretation, especially after the Court of Justice of the EU (CJEU) judgment in the Danish cases. They conclude their research by suggesting potential ways forward for a better alignment of the OECD’s and EU’s interpretation of the beneficial ownership concept. Beneficial ownership, Interest and Royalties Directive, tax treaties, abuse, treaty interpretation, EU, OECD, interest, dividend, royalties.

ЕВОЛЮЦІЯ ВЧЕННЯ ПРО ДОВІРЧІ ВІДНОСИНИ В НЕЗАЛЕЖНІЙ УКРАЇНІ: ВІД ПОВНОГО ЗАПЕРЕЧЕННЯ ДО ВПРОВАДЖЕННЯ У ЧИННЕ ЗАКОНОДАВСТВО

The article addresses the development of the fiduciary relationship doctrine in Ukraine. Primarily, the paper covers the alteration in understanding the idea of trust and other trust-like constructions by Ukrainian society from the 90s of the XX century to present time. The purpose of the article is to highlight the main stages of and approaches to understanding of fiduciary relationship in general and trust and other trust-like constructions in particular, as well as to analyse their common and distinctive features in comparison to related legal institutions and to determine the prospects for their further implementation in Ukrainian law. Methodology. To shed the light on different approaches to understanding trusts and paratrust constructions, a comparative-historical method was used in the article; also the methods of analysis, ascent from abstract to concrete and system-structural methods of scientific cognition were applied. Results and conclusions. Misunderstanding of the idea of a trust has led to violation of the rights of citizens affected by financial fraud of trust companies, which has played a significant role in shaping the distrustful or negative attitude of lawyers and ordinary citizens of Ukraine to trusts and other trust-like constructions for almost two decades. The concept of trust has existed in the law of Ukraine for a long time, but mostly it is associated with the negative issues like hiding property, hiding information about the ultimate beneficial owners etc. In addition, the concept of trust is changing constantly; this indicates the evolution of approaches to understanding the institution. At present, a trust is understood as "legal relationship," while the previous version of law defines a trust through the category of a legal entity. The approach to understanding the concept of beneficial ownership in a trust differs in common law countries and Ukraine. In Ukraine, this definition covers the right of a natural person who, regardless of formal ownership, has the opportunity to exercise decisive influence over the management or economic activity of a legal entity directly or through other persons. Keywords: fiduciary relationship, trust, trust-like (paratrust) constructions, property management, Trust Convention, beneficial ownership, trustee, ultimate beneficial owner, beneficiary, controlled foreign company (CIC), revocable trusts, irrevocable trusts.

The Relevance of the Beneficial Ownership Concept in Tax Treaty Clauses That Do Not Include It in Their Wording: A Note on the Colgate-Palmolive Case

This case note analyzes the outcome of the Spanish Colgate-Palmolive case, decided by the Supreme Court in September 2020. The case revolved around the interpretation of Article 12 of the Spain-Switzerland tax treaty (1967), on royalties, which omits any reference to the beneficial owner of the income in its wording. In short, the Court considered that the beneficial ownership concept cannot be construed by resorting to the OECD Commentaries, because soft law documentation cannot supersede the content of an applicable tax treaty.

Identifying Conduit Companies: A Russian Perspective on the Beneficial Ownership Concept

The Russian tax authorities, in an attempt to crack down on cross-border tax arrangements involving treaty shopping, assess the beneficial ownership status of the recipient of income. This article addresses the components of the analysis that is carried out in establishing a discrepancy between legal form and economic reality.

Odnos instituta stvarnoga korisnika i načela zabrane zlouporabe prava u europskom poreznom pravu

U radu se daje prikaz i osnovne implikacije presuda Suda Europske unije, u tzv. danskim predmetima. Presude se odnose na šest spojenih predmeta u kojima se ispituje pravo na ostvarivanje izuzeća od poreza na odbitak na isplate kamata sukladno s Direktivom IRD, odnosno dividendi sukladno s odredbama Direktive PSD u slučajevima zlouporabe prava, odnosno izbjegavanja poreza. U navedenom se kontekstu posebno ispituje odnos instituta stvarnoga korisnika i načela zabrane zlouporabe prava u domeni poreznog prava Unije. Tretirajući institut stvarnoga korisnika kao autonomni, objektivni zahtjev dodjele poreznog izuzeća, ali kao i relevantni čimbenik prepoznavanja zlouporabe prava i izbjegavanja poreza, Sud Europske unije, ovim presudama, mijenja dosadašnji pravni tretman dopuštene prakse porezno motiviranog djelovanja trgovačkih društava. Detaljno određujući pojam stvarnoga korisnika te dajući konkretne indicije za utvrđivanje zlouporabe prava, Sud Europske unije ta dva pojma dovodi u odnos međusobnog djelovanja. Otklanjajući potrebu za nacionalnim ili na ugovorima utemeljenim odredbama za sprječavanje zlouporaba, pozivanjem na djelovanje općeg načela zabrane zlouporabe prava, zabrana izbjegavanja poreza potvrđuje se kao izravni izričaj ovog općeg načela. Osim što se time čini daljnji iskorak u razvoju toga načela u pravu Unije, rad će pokazati da je novi, odnosno nadograđeni mehanizam, razvijen ovim presudama, uvelike logičan slijed trenda i doktrina razvijenih ranijim presudama Suda, ali istodobno i jasan pokazatelj političke opredijeljenosti Unije u borbi protiv međunarodnog izbjegavanja poreza i neovlaštenog stjecanja poreznih povlastica.

OS ECJ-TF 2/2019 on the ECJ Decisions of 26 February 2019 in N Luxembourg I et al. (Joined Cases C-115/16, C-118/16, C-119/16 and C-299/16) and T Danmark et al. (Joined Cases C-116/16 and C-117/17), Concerning the 'Beneficial Ownership' Requirement and the Anti-Abuse Principle in the Company Tax Directives

This article deals with the decision taken by the Court of Justice of the European Union in of 26 February 2019 in N Luxembourg I et al. (Joined Cases C-115/16, C-118/16, C-119/16 and C-299/16) and T Danmark et al. (Joined Cases C-116/16 and C-117/17). The authors acknowledge that the Danish beneficial ownership address a number of important and timely issues, especially with regard to the concept of under EU law. These include: (i) the expansion of the general anti-abuse principle enshrined in EU law to areas of tax law that are subject to minimal harmonization; (ii) the use of OECD materials to define the beneficial ownership concept; (iii) the conflation of the beneficial ownership concept with the general anti-abuse principle and the Court's attempt to give the notion of abuse workable contours; and (iv) the reading of an effective subject-to-tax clause with regard to interest income into the definition of company laid down in the EU Interest and Royalties-Directive (2003/49) (IRD). Domestic courts will likely struggle to translate the abstract guidance of the Danish beneficial ownership into concrete decisions, that practitioners and academics alike will have to discuss building blocks and nuances of the Grand Chamber's decisions for quite some time, and that consideration needs to be given to the impact of the cases on current tax structures.