Elimination Of Double Taxation Research Articles

Improving the legislation of Ukraine to avoid and eliminate double taxation

The author carried out a comprehensive analysis of the theoretical and methodological foundations, normative foundations of improving the legislation of Ukraine to avoid and eliminate double taxation. The formation of the principles of overcoming double taxation through the implementation of the provisions of the current tax legislation is connected with the influence on the behavior of the relevant persons – both powerful and obliged. The impact on tax relations by the norms of tax legislation is carried out by detailing the capabilities and forms of behavior of bodies representing the state and guaranteeing the implementation of its interests in the payment of taxes and fees. This happens by granting the right to such bodies to issue preliminary clarifications on the grounds for carrying out one or another tax transaction, applying fines to taxpayers in case they do not comply with the relevant recommendations. In order to improve the procedures of the double taxation avoidance mechanism in Ukraine, it is proposed to establish the procedure according to which residents of Ukraine are obliged to declare income received abroad, and to impose on fiscal authorities the obligation to check the compliance of the declared data. For the introduction of such a procedure, we offer the norms of Article 13.5. 13 of the Tax Code of Ukraine shall be amended as follows: «13.5. Residents of Ukraine are required to declare income received abroad by submitting an appropriate application to the tax authorities. Otherwise, the specified entities will be held liable for the unreliability of the information provided in the declarations in accordance with the current legislation of Ukraine. The authorities of the State Tax Service of Ukraine conduct a check of compliance of the information provided by the taxpayer with specific factual data and a certain international agreement, as well as the fact that the relevant tax amounts have been credited to the budget.» In order to eliminate double taxation, the rules on the basis of which the profit of a permanent establishment or an enterprise that carries out trade with a foreign participant of the same group of enterprises should be additionally applied to the definition of a permanent establishment. On the basis of a comprehensive analysis of the theoretical and legal foundations, normative foundations of improving the legislation of Ukraine to avoid and eliminate double taxation, problems of imperfection of regulatory acts were identified and possible options for improving the legislation in the specified area were emphasized. Key words: avoidance of double taxation, elimination of double taxation, tax exemption, tax credit, tax agreements, income taxation, double taxation.

The Strategies of the International Chamber of Commerce to Eliminate Double Taxation

ABSTRACT This article focuses on the role of the International Chamber of Commerce (ICC) in developing the regime on the elimination of double taxation in the twentieth century. The objective of the article is to determine the ICC’s strategies and its structural advantages in developing the regime and contextualize these strategies in a broader socio-legal and historical context. The article adopts the interactional theory of Jutta Brunée and Stephan Toope to emphasize the actor-oriented outlook upon the development of the regime on double taxation. It relies on the micro-and macro-histories teased out from archival sources, biographies of prominent decision-makers, and deliberations of committee members in the League of Nations and the United Nations. The article concludes that the ICC is a strategic player within the community of practice in the international tax regime, which utilized its structural advantages and employed different strategies to facilitate the elimination of double taxation.

Preliminary observations on the imposition of the tax liability and elimination of double taxation under the OECD Secretariat’s Progress Report on Amount A of Pillar One

Preliminary observations on the imposition of the tax liability and elimination of double taxation under the OECD Secretariat’s Progress Report on Amount A of Pillar One

Do the Effective Tax Incentives Reduce Tax Revenues? Investigating the Paradox of Corporate Income Tax in Serbia

The aim of this paper is to examine the impact of tax incentives as determinants of economic development on revenues from corporate income tax in Serbia. The study uses data from secondary resources of the Ministry of Finance for the period 2007–2018 by employing regression and factor analysis. The research includes 10 tax incentives that were used in Serbia in the analyzed period. The methodology of empirical verification involves the implementation of correlation analysis, regression analysis and factor analysis. We opted for the application of Principal Component Analysis (PCA) because this method extracts the important data in order to present a set of new variables called main components. The model obtained in this way formed the determined components of tax incentives as independent variables. The model considers tax incentives grouped into four components. The results of empirical research indicate that there is a positive impact of certain tax incentives on revenues from corporate income tax and proved the paradox of tax collection initiated by tax incentives. The model proved that tax incentives explaining the first component had a positive effect on revenues from corporate income tax. Namely, the incentives for investments, incentives exempting the taxpayer from paying corporate income tax for work training, professional rehabilitation and employment of disabled persons, as well as a reduction based on the elimination of double taxation have a positive effect on revenues from corporate income tax. The positive impact of tax incentives can be explained by their effectiveness. The results show that tax incentives policy must be defined in detail for the purpose of achieving the economic and social goals.

Taxation of IT industry: implementation issues and complexity of implementation

Problem setting. This article is devoted to the study of issues of introduction and implementation of taxation mechanisms in IT industry. The subject of the study are the norms of the draft laws proposed for implementation. As IT industry is one of the most developing spheres of the domestic market, the attention in the article is concentrated on the variants of specific taxation of information technologies sector. The attention is also focused on the need to adopt regulations that would not only improve the overall market perception, but also provide the most effective growth opportunities for the IT industry. Target of research. The purpose of this article is to study the issues of profitability and efficiency of tax implementation in accordance with the schemes and options proposed by legislators. It considers the significant shortcomings of the currently available draft laws, taking into account the experience of such initiatives abroad. Analysis of resent researches and publications. Peculiarities of legal regulation of issues of taxation of IT-industry and practice of domestic results of its implementation were the subject of research in the works of G. Androshchuk, A. Bereza, N. Boreyko, V. Glanz, I. Dulskaya, R. Zharko,Yu Kaiser, Yu Lazebnik, S. Malets, N. Prokopenko, S. Ripp, L. Fedulova, K. Swabia, M. Shevchenko, G. Yurchuk etc. Article’s main body. The existing system of taxation of IT technologies services requires improvement through the formation and implementation of a balanced tax policy taking into account the peculiarities of this type of activity and in accordance with the unification of international standards. Application of systematic approaches on the part of the state in the sphere of fiscal policy in respect of tax regulation of IT services can contribute to the development of the industry as a whole and guarantee competitiveness in the international arena. The article points out that the main problems and issues which require more detailed consideration in the taxation of IT services are: the definition of mandatory elements of taxation, the definition of tax jurisdictions and the elimination of double taxation, the formation of a tax on personal income and payment of a single social contribution from the salaries of IT specialists. Conclusions and prospects for the development. The final result, to which the article concludes, is the hypothesis that in order to overcome the above-mentioned problems it is necessary to improve the domestic taxation system, which will clearly regulate the mandatory elements of the state tax policy formation in the field of IT services, taking into account the positive practical experience of competing countries in this area.

BILATERAL AGREEMENT AS A METHOD OF ELIMINATING DOUBLE TAXATION

The article provides a description of individual international treaties that establish the legal basis for the elimination of double taxation. It was found that in countries that adhere to the monistic and dualistic concepts, the status of double taxation agreements is not the same, the rules of such agreements, subject to compliance procedures are applied along with national legislation in the field of taxation and even in the regulation of taxation. legal relations with a foreign element have priority over the rules of national law.

Allocation of Taxing Rights in the Digitalized Economy: Assessment of Potential Policy Solutions and Recommendation for a Simplified Residual Profit Split Method

In 2019, the OECD released a public consultation document and its work program that address the tax challenges raised by the digitalization of the economy. These documents essentially discuss proposals that either address the allocation of taxing rights (Pillar I) or unresolved Base Erosion of Profit Shifting issues (Pillar II). Regarding Pillar I, three solutions were proposed: user participation, significant economic presence, as well as the marketing intangibles approach. The purpose of this contribution is to assess the Pillar I proposals considering their policy rationale and the broadly agreed tax policy principles by tax administrations. In light of the assessment, the author takes the view that the marketing intangible proposal, which seems to apply to consumer (or user) facing businesses, could be the most appropriate solution to address the issue of the allocation of taxing rights. However, that proposal incites several issues concerning its profit allocation mechanism. Thus, in order to achieve tax certainty, the contribution offers a potential solution for implementing the consumer (or user) facing proposal, that is, to resort to a simplified residual profit split method that is based on operating profit margins of a MNE Group . The article provides a high-level overview of the design of the mechanism and briefly addresses issues related to scope and nexus as well as rules that deal with elimination of double taxation.

Inheritance, estate and gift tax treaties—Italy

Abstract Italy is party to seven inheritance/estate tax treaties, concluded with Denmark, France, Greece, Israel, Sweden, the USA and the UK. The treaty with France also covers gift tax. The article describes the ramifications of such treaties in terms of the elimination of double taxation, by either restricting Italian taxation as the State of situs of the assets or dealing with dual residence cases. The article also highlights both the interpretation issues raised by these (old) treaties and the limits of such treaties in eliminating double taxation.

Transnational Corporations and Their Role in the Economic Development

This paper analyses the role of transnational corporations in a country's economy within the global economy. Over the last two decades of the twentieth century, in the world economy, there has been a rapid increase in the number of corporations. The increasing number of corporations has come as a result of large investments and adequate business plans in line with market requirements. The bigger the company is, the bigger the field for action. This has in some way even determined the merging of various companies, which then have extended their influence on the world's major markets. Corporate empowerment has raised many other issues related to their economic activity such as: the issue of workers’ rights, the elimination of double taxation, the issue of monopolies by these corporations, the insurance of the capital of these corporations, up to eventual bankruptcy. Thus, all these issues raise dilemmas regarding the role and impact of corporations on the development trends of a country.The aim of this paper is to identify the impact of transnational corporations on the development of a country's economy. For the elaboration of the paper several scientific methods have been used, including the literature review and the analytical method for analysing data from the field.

Transnational Corporations and Their Role in the Economic Development

This paper analyses the role of transnational corporations in a country's economy within the global economy. Over the last two decades of the twentieth century, in the world economy, there has been a rapid increase in the number of corporations. The increasing number of corporations has come as a result of large investments and adequate business plans in line with market requirements. The bigger the company is, the bigger the field for action. This has in some way even determined the merging of various companies, which then have extended their influence on the world's major markets. Corporate empowerment has raised many other issues related to their economic activity such as: the issue of workers’ rights, the elimination of double taxation, the issue of monopolies by these corporations, the insurance of the capital of these corporations, up to eventual bankruptcy. Thus, all these issues raise dilemmas regarding the role and impact of corporations on the development trends of a country.The aim of this paper is to identify the impact of transnational corporations on the development of a country's economy. For the elaboration of the paper several scientific methods have been used, including the literature review and the analytical method for analysing data from the field.

Міжнародні податкові договори як інструмент державного управління у сфері оподаткування

Стаття розкриває місце міжнародних податкових договорів в державному управлінні процесами оподаткування, зокрема, обміну податковою інформацією. Цілі їх укладання включають усунення подвійного оподаткування та запобігання ухиленню від оподаткування. Міжнародні податкові договори встановлюють принципи обміну інформацією: взаємності (обмін еквівалентною інформацією) та паритетності (обмін в однакових формах).

INDONESIA ECONOMIC POLICY PACKAGE VOLUME 5: COULD IMPACT TO THE ECONOMY?

This study was conducted to analyze each of the points contained in Economic Policy Package Indonesia Volume V released by the Indonesia Financial Services Authority (FSA) in October, where the economic policy consists of three points with respect to the policy of Islamic banking, the elimination of double taxation on property, real estate sector, and a decrease in income tax. The purpose of economic policy is to drive economic growth in Indonesia using an exploratory qualitative approach, in which the phenomena to be observed will be analyzed based on the theories related including previous studies related. The results of the analysis is the application of banking products and simplification of the opening of the office network to support the advancement of Islamic banking, to achieve high employment and economic growth then the elimination of double taxation for property and real estate sector to encourage the advancement of the sector at a time the country's economy. Meanwhile a lower income tax rate resulted in increased state revenues from taxes. With a series of policies that made the FSA contribution to economic growth, it is clearly seen that the FSA brought significant progress in Indonesia's economic growth.

Tax Treaties and Developing Countries

In today's discussion concerning tax treaties and tax treaty policy the implications in particular for LDCs are seldom addressed. There is a lack of analysis of which arguments might apply to this group of very poor countries but not for other developing countries. Based on a study of the tax treaty network of East African LDCs, the author contributes to this discussion by analysing two issues: What importance do tax treaties have for LDCs and what role does the UN Model play in the negotiation of tax treaties of LDCs. After considering a tax treaty's functions (the elimination of double taxation, the allocation of taxing rights, the prevention of tax avoidance and fiscal evasion, and the promotion of foreign direct investment), the author comes to the conclusion that an LDC can indeed benefit from entering into tax treaties. However, since a tax treaty can also have negative effects for LDCs, it is crucial for such countries to carefully evaluate all factors before entering into tax treaties. If an LDC decides to negotiate tax treaties, the UN Model is a good choice because it does indeed take into account certain particularities of capital importing countries. The treaty network of East African LDCs also shows that the UN Model already had a rather important impact on the treaty negotiations of these countries. Nonetheless, there are certain particularities in these tax treaties which might need to be considered for inclusion into the UN Model or in its Commentary in order to make this model convention even more relevant for East African LDCs.

Avoidance and Tax Treaties: Current UK Experience

The author, in this article, considers tax avoidance in the context of tax treaties by reference to the United Kingdom's current experience, with particular regard to three recent tax cases concerning the treaty allocation of taxing jurisdiction and the elimination of double taxation as well as retroactive treaty override, UK treaty policy, and legislative developments.

The Uneasy Case and Fate of Article 293 Second Indent EC

The abolition of double taxation is a main principle of the European Union (EU) and its internal market. However, that does not make it an inclusive and hard legal principle. As double taxation is a main tax obstacle and restriction of the free economic movement in the internal market, its abolition is also a main objective of fundamental freedoms as they are interpreted by the European Court of Justice (ECJ). However, this interpretation also points to important limitations and does not cover double tax burdens. Article 293 second indent European Community (EC) is the only provision that deals expressly in the Treaty with the elimination of double taxation. However, it is interpreted less in terms of a hard and effective obligation for Member States than in soft terms of invitation and exhortation addressed to them. It has become a source of divergent interpretations and is now facing its repeal by the Treaty of Lisbon (if and when ratified). What is the picture before and after repeal in terms of positive and/or negative effects on the tax integration process?

The Elimination of Double Taxation of Dividends in the EU: Cobelfret Means the End of Belgium’s Final Taxation

With a view to avoid double taxation of dividends, the Belgian ‘definitively taxed income’ rules allow parent companies to deduct the dividends received from their subsidiaries resident in another Member State but only up to the amount of their taxable profits in the same taxable period, which potentially limits the deductibility of the dividends received. In the Belgium v. Cobelfret NV (hereinafter ‘Cobelfret’) case, the European Court of Justice (ECJ) decided that, by imposing such a limit, Belgium has not correctly transposed the terms and objectives of the Parent-Subsidiary Directive. After a general introduction on the question of double taxation of dividends (1.1), a short summary of the Cobelfret case (1.2), and of the ECJ decision (2), the present contribution offers a commentary, first, on the possible impact of this decision in Belgium (3.1) and, second, on the coherence of existing ECJ case law on cross-border dividends with the objectives of the Parent-Subsidiary Directive (3.2).

2008 OECD Model : conflicts of qualification and double non-taxation

The 2008 Update of the OECD Model modified Para. 32.6 of the Commentary on Art. 23 (Elimination of double taxation). Para. 32.6 was added in 2000 and deals with double non-taxation arising from conflicts of qualification. The changes to Para. 32.6, although minor, deserve careful analysis because the issue of qualification conflicts resulting in double non-taxation is highly controversial. This article examines the changes to Para 32.6 and analyses the policy and legal considerations relating to the approach taken in Para. 32.6.

Amendments to Finland's CFC regime

After the 2006 judgment of the European Court of Justice in Cadbury-Schweppes, it was clear that Finland's CFC regime, introduced in 1995, had to be amended in order to bring it into line with the ECJ's judgment. Finland amended its CFC regime accordingly, with effect from 1 January 2009. After giving some background and describing Finland's old regime, the article discusses the 2009 changes, including (among others) the exclusion of certain states from the CFC regime, the treatment of permanent establishments and losses, and the elimination of double taxation.

Renneberg Endangers the Double Tax Convention System or Can a Second Round Bring Recovery?

In this article, the author critically discusses the recently decided Renneberg case. In substance, the Court ignored completely the DTC allocation rule, that allocated exclusively income, both positive and negative income, from an owner–occupied dwelling situated in Belgium of a resident in Belgium to Belgium.The author concludes that the Court wrongly treated the negative income from Renneberg’s dwelling situated in Belgium like a personal circumstance.Furthermore he argues that, erroneously, the Court hardly paid any attention to the arguments that this is a case of dislocation of the taxable base. Next to this, the Court misinterpreted the rule for elimination of double taxation. By allocating the negative income at issue to the Netherlands if a non–resident obtains all or almost all of his employment income in the Netherlands, the Court seriously undermines a balanced allocation of the power to impose taxes between the Member States. As result, the Netherlands and Member States in a similar position become a dumping place of losses. The Court’s observation that no possible justification had been put forward is amazing. The Netherlands Hoge Raad could consider clarifying its position to the Court in a second round before deciding the case itself. If no justifications are accepted by the Court, DTCs between Member States should be adjusted: they should include a claw–back mechanism in respect of non–residents if Community law obliges the state of source to take into account negative income from outside that state.

Hybrid Instruments and the Indirect Credit Method - Does it Work?

This paper analyses the possibility of double non-taxation of hybrid instruments in cross border transactions where the country of the investor has implemented the indirect credit method for mitigation or elimination of double taxation. From an isolated perspective a double non-taxation cannot be obtained because typically no taxes are paid in the foreign country due to the classification as debt and therefore even in the case of a classification as a dividend in the country of the investor no indirect credit can be given to the taxpayer. Using this as a starting point this paper investigates the impact of asymmetric tax treatment of hybrid instruments on the indirect credit method and the potentials for minimizing the tax burden or even the possibility of obtaining a double non-taxation. On this basis the paper develops a formula that identifies the optimal investment strategy based on given tax rates. Special interest is given to the limitations and possible barriers to hybrid transactions. This paper intents to initiate a scientific discussion concerning the tax impact of hybrid instruments in countries where the indirect credit method is employed. (author's abstract)