Concept Of Beneficial Ownership Research Articles

Overview of Korean Supreme Court Case Law Regarding Beneficial Ownership

This article provides an overview of Korean Supreme Court (KSC) decisions regarding how the concept of beneficial ownership in tax treaties is applied and how the Korean-source income derived by foreign transparent entities is taxed in Korea.

Creating Mechanisms to Get Good Access to Beneficial Ownership Information in International Context

International initiatives to enhance tax compliance and reduce the extent and impact of illicit financial flows have now been ongoing for over two decades, led primarily by the Organisation for Economic Co-operation and Development (OECD), the Financial Action Task Force (FATF), the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum), the European Union (EU), the United Nations Office of Drugs and Crime (UNODC), and the World Bank. Increasingly, the various forums, bodies, panels, and countries involved in developing policy responses to the issue of illicit financial flows are recognising that there are synergies between these regimes and initiatives that, if harnessed properly, can multiply the effectiveness of current individual approaches. For instance, while the stated purpose of the FATF Standards on transparency and beneficial ownership is to prevent the misuse of corporate vehicles for money laundering or terrorist financing, the implementation of these Standards supports efforts to prevent and detect other predicate offences such as tax crimes and corruption, while reinforcing jurisdictions’ capacity to meet their legal obligations arising from related international standards such as the UNCAC, the Criminal Law Convention on Corruption, the OECD Convention on Combating the Bribery of Foreign Public Officials in International Business Transactions, and the Standard for Automatic Exchange of Financial Account Information. Common to many of these regimes and standards is the shared recognition that the identification of the ultimate beneficial owners of accounts and of corporations is crucial to detecting, tracking, and preventing illicit financial flows, by enabling authorities to more effectively and efficiently “follow the money”. The aim of this paper is to provide the necessary contextual information around beneficial ownership, and its place in the broader transparency agenda, in order to enhance understanding amongst stakeholders of what is meant by the concept and what its effective implementation requires. Part I sets out a broad overview of current and historical developments in the financial transparency agenda. Part II provides an outline of the relevant international frameworks that prescribe the collection, verification, and disclosure requirements for beneficial ownership information (being, primarily, the AML/CFT FATF Standards and the bilateral/multilateral mechanisms for exchange of information for tax purposes). Part III discusses the benefits of, and barriers to, effective collection, disclosure and exchange of beneficial ownership information, and outlines practical steps that can be taken to enable and/or reinforce verification systems. Part IV establishes an overview of recent international developments on the concept of beneficial ownership. It presents a factual description of the initiatives taken by the OECD, the Global Forum, the FATF, the Extractive Industries Transparency Initiative, World Bank, UNODC, Transparency International and Tax Justice Networks. Part V seeks to provide some useful practical-oriented recommendations on short- to medium-term actions that could be taken in these types of capacity-constrained environments to improve transparency and enhance the effectiveness of current tools and practices for combatting illicit financial flows.

Доктрина «снятия корпоративной вуали» и концепция бенефициарной собственности: перспективы применения в России

Доктрина «снятия корпоративной вуали» и концепция бенефициарной собственности: перспективы применения в России

EVOLUTION OF THE BENEFICIAL OWNERSHIP CONCEPT: MORE THAN HALF OF CENTURY OF UNCERTAINTY AND WHAT HISTORY CAN TELL US

The beneficial ownership concept has constituted for more than half a century one of the most fundamental and debated issues in the application of tax treaties. This article goes back to routes of this term explaining the reason of its original inclusion in the OECD Model Tax Convention and why ultimately such inclusion may have not been necessary. Then it analyses the historical developments of beneficial ownership in the OECD Model Tax Convention. For that purpose it considers different interpretations adopted by jurisdictions (particularly in China) and local courts delving into some of the landmark cases on the subject. Finally it provides a detailed analysis of the current meaning of beneficial ownership considering the most recent developments in the Commentary to the OECD Model Tax Convention.

Beneficial ownership in sukuk ijarah: a shari’ah appraisal

PurposeThe purpose of this paper is to critically study the application of beneficial ownership in sukuk ijarah by analysing the fiqh interpretation on the concept of beneficial ownership.Design/methodology/approachThis is a theoretical paper using content analysis approach that delves into the works of Islamic scholars on the concept of ownership and evaluates the concept of beneficial ownership in sukuk ijarah from the Islamic perspective.FindingsThe paper concludes that the beneficial ownership should be considered as true ownership because Shari’ah has allowed the transfer of ownership by a sole basis of contract (offer and acceptance). Although the sukuk holders are not registered as the legal owners in the Land Office, the documentations and agreements have clearly specified the owners and their liabilities.Research limitations/implicationsEmpirical investigations into how sukuk holders are responsible for the underlying assets in sukuk ijarah.Practical implicationsIt is therefore important to develop parameters for beneficial ownership to govern the use of the concept in Islamic finance.Originality/valueThe paper shows the fiqh interpretation on the beneficial ownership in sukuk ijarah while considering all the constraints and challenges in the implementation of sukuk.

Klauzula "beneficial owner" w prawie chińskim – kluczowe zagadnienia

Celem niniejszej pracy jest zbadanie rozumienia pojęcia beneficial owner w Chinach. Termin ten został wprowadzony do Modelowej Konwencji OECD 1977 r. w celu zapobieżenia wykorzystania art. 10–12 przez agentów, którym przysługuje prawo do dochodu. Od niedawna do polskiej Ustawy o CIT wprowadzono definicję klauzuli beneficial owner, co zainspirowało autora do dalszych rozważań. Fakt wprowadzenia Chin w 2001 Prawa Trustów sprawił, że warto bliżej przyjrzeć się funkcjonowaniu instytucji powiernictwa i własności uprzywilejowanej w Chinach. W przeciwieństwie do Polski Chiny nie zdecydowały się na zdefiniowanie pojęcia beneficial owner, ale chińska administracja podatkowa regularnie publikuje wytyczne odnośnie możliwości skorzystania przez podmiot z klauzuli beneficial owner.

Anti-Activist Legislation: The Curious Case of the Brokaw Act

The Brokaw Act is proposed legislation aimed, in the words of one of its sponsors, at “financial abuses being carried out by activist hedge funds who promote short-term gains at the expense of long-term growth[.]” The Act is named for a small town in Wisconsin that, according to the Act’s sponsors, was decimated by the actions of a hedge fund activist in shutting down the local paper mill with a loss of hundreds of jobs. The Brokaw Act represents the first attempt at federal legislation aimed at restricting hedge fund activism.We first look into what happened in Brokaw, Wisconsin. The facts do not bear out the lawmakers’ claims. Hedge fund activists played essentially no role in the closure of the Brokaw mill. To the contrary, the paper company’s incumbent management closed the mill – just the latest in a series of management’s mill closures – amid an industry-wide decline that made the mill uneconomic to keep open.We then consider two claims of hedge fund activism’s opponents that appear to motivate the Brokaw Act. The first claim – that hedge fund activists typically use the ten-day disclosure period of Rule 13d-1 to accumulate positions significantly in excess of 5% – has been the subject of empirical study and appears to be incorrect. The second claim – that hedge fund activists often form a “wolf pack” in the pre-disclosure period to act collectively against a target – is also without support from empirical evidence. Neither claim appears to warrant legislative action.Finally, we consider two additional parts of the Brokaw Act. The first would expand the concept of beneficial ownership to include certain derivatives linked to the value of equity securities, while the second would require increased disclosure of short positions in the stock of public companies. Neither activity plays an important role in hedge fund activism, and both require additional study before the passage of any legislation.

Концепция бенефициарной собственности в российской судебной практике (частноправовые вопросы)

The author studies the definitions and features of the concept of “beneficial ownership” and its application by Russian courts. Although the Russian civil law does not recognize the concept of beneficial ownership which comes from the English law of equity, this concept is beginning to be recognized by Russian judicial practice, in particular, in the recent resolutions of the Russian Supreme Court of the Russian Federation. The cases in question relate to the division of the joint property acquired by spouses during the marriage (the Russian courts consider the property (assets) of the offshore company or trust controlled by spouse (acting as a beneficiary) as a joint spouses’ property); recognition of the rights of beneficiary for challenging the decisions of the companies controlled by such beneficiary; levy of execution upon the property of the offshore companies and trusts controlled by beneficiary for the beneficiary’s debts. It is obvious that decisions of Russian courts are in the line with trends of development of foreign case law. One of the manifestations of the beneficial ownership concept in Russian law is the institute of “a person having factual right for the income”, fixed by Russian tax law. Considering the deoffshorization policy in Russia, it is obvious that this institute will continue to be reflected in the national tax law. The author attends to, inter alia, the questions of applicable law to beneficial ownership, including applicable law to the relations with offshore companies and trusts. In particular, the legal regime of foreign trust’s or offshore company’s property shall be determined by the law of the relevant foreign jurisdiction but not by the rules of Russian law.

Beneficial Ownership: Concept, History and Perspective

This article traces the evolution of the beneficial ownership concept, both internationally and within the European Union, in the context of two decisions of the Swiss Supreme Court handed down in May 2015, wherein it was held that two Danish banks, involved in derivative transactions, should be denied a withholding tax refund, as they are not the beneficial owners.

Recent Tax Jurisprudence on the Concept of Beneficial Ownership for Tax Treaty Purposes

This article provides an overview of recent Italian tax jurisprudence on beneficial ownership for tax treaty purposes. The aim is to find common threads, where existing, and to show, in general, how the Italian tax courts have been approaching the matter.

Концепция бенефициарного владельца (собственника) в налоговом праве

The concept of beneficial ownership draws the increasing attention because it´s widely used by the international holding structures for tax planning. The author analyzes the concept of beneficial ownership in the tax law taking into account new Russian legislative initiatives and law-enforcement practice. The article touches upon the history of this concept, its content in the international tax law, peculiarities of the ratio of national and international tax law norms, questions of concept application and usage of the term «the person having the actual right to receive the income» in conventions for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. The author concludes that inclusion of the term «the actual addressee (beneficial owner) income» in the Tax code of the Russian Federation for the purposes of the application of the Double tax agreements by itself will not provide for the effective application of the concept which is a result of expert development, carried out within the Organization for Economic Co-operation and Development (OECD) and also case-law of the leading states. The author concludes that there´s a necessity for the scientific researches taking into account the specificity of the Russian legal system, defining the directions of tax and legal researches.

Beneficial Ownership Provisions In Tax Treaties Between Developed And Developing Countries: The Canada/South Africa Example

In the years since the Organisation for Economic Cooperation and Development (OECD) adopted its first draft tax treaty in 1963, the world has experienced an astonishing surge in international trade and investment. The tax treatment of these cross-border transactions is affected by double tax agreements. As tax treaty networks will likely continue to expand, concerns about tax treaty abuse might be expected to grow. The extent to which a countrys tax treaty policy favours developing countries - or not - depends upon the extent to which the country is prepared to adopt provisions from the UN model tax convention as opposed to the OECD model. Developing countries, in particular, should carefully consider the design of their tax treaties so as to effectively combat tax avoidance without sacrificing foreign direct investment. To this end, the Canada/South Africa tax treaty is compared and contrasted with these two models. The concept of beneficial ownership is reviewed in this context. It is contended that a general definition in South Africa's Income Tax Act of 'beneficial ownership' would assist in the interpretation of the term for the purposes of South Africa's tax treaties. It is submitted that the scope for the source taxation of passive investment income (viz. dividends, interest and royalties) in the developing country could be magnified through treaty negotiations.

Beneficial Ownership in International Taxation: Comparative Study of its Application in the United Kingdom and Canada

Enjoyment of tax treaty incentives such as reduced withholding tax rates or tax exemption is dependant upon fulfilment of conditions such as residence and beneficial ownership which have been in existence for over 4 decades. As much as both conditions are determined in accordance with the provisions of the DTAs, the beneficial ownership condition provisions are not clear in terms of its purpose and scope. This has led to uncertainty and difference in application of the beneficial ownership concept in different jurisdictions. As a result, an examination of the circumstances that led to the introduction of the concept and a comparative analysis of the concept’s application in UK and Canada were carried out. It is argued that the concept is meant to enable beneficial owners have access to the tax treaty incentives by eliminating interposed parties with legal rights to income from claiming the incentives. It is not meant to be a general anti abuse rule. The courts in both states differ in their application. Whereas in UK it is applied as a general anti abuse rule, in Canada it is applied as an entitlement provision whose scope is limited in circumstances where intermediaries such as agents, nominees, and conduits are interposed. It is also argued that this lack of harmonization in application affects taxpayers and may cause them to have business dealings in Canada where the threshold to access the incentives is low. DTA explanatory notes need to always be clear on the purpose and scope of the concept to provide taxpayers with certainty.

Tax Treaty Case Law News - A Trio of Recent Cases on Beneficial Ownership

In this third Tax Treaty Case Law News, Brian Arnold comments on three recent cases regarding the concept of beneficial ownership involving courts in Canada, Switzerland and Denmark.

An Update on the Concept of Beneficial Ownership from an Italian Perspective

This article provides an overview of the concept of beneficial ownership from an Italian perspective based on the Italian tax law framework and in light of guidance provided by the Italian tax authorities, as well as case law. The article also sheds light on recently enacted provisions that could mitigate beneficial ownership issues arising in connection with certain intra-group financing structures involving Italian companies and EU associated companies.

Czech Supreme Administrative Court on Beneficial Ownership

On 10 June 2011, the Czech Supreme Administrative Court issued a decision on the beneficial ownership concept within the context of tax treaties following the 1963 OECD Model Tax Convention.

Tax Treaty News

This "Tax Treaty News" reviews a number of recent tax cases from the United Kingdom, Norway, Canada and Denmark, involving hybrid entities and tax avoidance, commissionaire arrangements and permanent establishments, the principles of non-discrimination and habitual abode, and the concept of beneficial ownership, respectively.

Beneficial Ownership and Tax Treaties: A French View

In this article, the author considers the nature and implications of the concept of beneficial ownership contained in French tax treaties and discusses whether or not, in light of the case law, it may apply independently from the domestic concept of abuse of law.

A Cross-Country Perspective on Beneficial Ownership – Part 1

In this two-part article, the authors examine the beneficial ownership concept through a review of the case law of various countries. In Part 1, the history of the concept is outlined, as well as the domestic treatment in Canada, France, Germany and the Netherlands. Part 2 sets out the domestic treatment in Switzerland and the United Kingdom and discusses various economic considerations in regard to the concept.

First Danish Ruling on Beneficial Ownership

On 16 April 2010 the Danish Tax Tribunal published the first Danish decision that considers in detail the concept of beneficial ownership under Danish law. The Tribunal, in finding in favour of the taxpayer, provides insight into the tax authorities’ approach to beneficial ownership requirements and offers guidance on the Tribunal’s emphasis in deciding on the scope of application of the beneficial ownership concept as a means of preventing abuse.