Tax Matters Research Articles

Peru: Technical Assistance Report—Proposals for the 2022 Tax Reform: Mining Sector Fiscal Regime, Capital Gains, and IGV on Digital Services

In October 2021, the MEF asked Congress for the delegation of powers to legislate on tax matters with the aim of increasing tax collections and doing so by adding progressivity to the Peruvian tax system. The initiative being developed by the MEF contains (tentatively, to date) around 40 specific measures—some administrative, others related to tax policy—that the MEF hopes will, as a whole, generate additional revenue for the treasury. The tax collection impact of quite a few of the measures (including those pertaining to the mining sector) has not been estimated, whereas the measures for which there is a calculation are estimated to bring in a little over 1 percent of GDP in revenues. Given Peru’s low level of tax collections, both relative to its own historical trends as well as those of other countries in the region, the amount expected to be collected with the proposed reform is modest. However, increasing tax collections by enhancing progressivity would appear to be the right approach.

Cairn Energy v India: Continuity in the Use of ILC Articles on State Responsibility

In an award dated 21 December 2020, the Tribunal in Cairn Energy v India concluded that India’s decision to impose taxes retroactively on the foreign investor violated the fair and equitable treatment (FET) obligation of the India–United Kingdom (UK) bilateral investment treaty (BIT). Hence, the Tribunal ordered India to return over US$1.2 billion to Cairn Energy. This case has attracted attention for reasons such as whether taxation matters fall within the scope of a BIT, whether the amendment of tax laws retroactively by a country could lead to an internationally wrongful act under the BIT and the interpretation of the FET provision.3 However, the purpose of this case comment is to analyse this case from the point of view of the International Law Commission Articles on State Responsibility4 (ILC Articles), which, over the years, have been widely referred to by investor-State dispute settlement (ISDS) tribunals.5 Thus, the...

GST: Awareness and Overview in Haveri District

The single tax system reduces transportation time. But, the services of external consultants are used for various tax matters. The country’s taxation system has improved with the help of GST and the government should take more efforts to training and educating public. Due to frequent change in GST law, companies need to change their accounting system. The technical cost and legal cost in GST are very high and not satisfied with available required services of GST. So, transition to GST is very difficult. Some common problems faced by business are increased overhead expense, supply chain structure, excessive compliances and filling, delays in refund, GST filling, decline in business, refund mechanism and rise in input cost. The satisfaction level of GST after implication has not reached the expectation of all Governments, consumers & business. The urgent requirements for improvement in the nation’s interest include rationalizing GST rates, removing excess processes, creating efficiencies and removing debatable aspects. The present study analyzes the awareness and overview of GST in the study area. Key Words: Tax, GST, Revenue, Difficulties, Awareness, Overview, India.

Налоговые способы поддержки бизнеса в России в период коронавируса

The current events caused by the COVID-19 pandemic concern all spheres of life of every citizen and every enterprise (organization). Forced changes pose a lot of urgent issues to the leadership of the state, regions, municipalities, and individual economic entities. Among such issues, the most important ones are the retention of income and sources of salary payments, the possibility of obtaining tax breaks, the search for attracting additional resources to the turnover of enterprises when revenues from current activities are reduced, possible sanctions for non-fulfillment or improper fulfillment of obligations. A significant tool during the pandemic is the state tax policy. In the context of the coronavirus pandemic, there have been changes in the system of business and economic relations around the world. The first introduction of quarantine immediately showed how much businesses, especially small and medium-sized ones, were not ready for such situations, how difficult it was for them to survive and save jobs. In order to provide anti-crisis support to enterprises, the state introduces tax incentives and relief, since it is in these conditions that state support is extremely important for economic entities. If in stable economic conditions tax instruments for supporting and stimulating business are benefits, especially in terms of innovative developments and investments, in crisis economic conditions these are, as a rule, deferrals and installments of payments for taxes and fees. The tax burden on Russian business is quite heavy in any situation due to the economic nature of tax payments, but in crisis circumstances, including those caused by the coronavirus pandemic, the tax burden becomes unbearable for many business entities that naturally expect effective measures of support from the state. At the same time, it is necessary to achieve a balance of interests of business and the state in matters of taxation in order to protect against threats and challenges of the external environment. The article discusses state measures of tax support for Russian business during the coronavirus pandemic, the so-called “quarantine assistance”. This is exemption from taxes and fees for the reporting tax periods, as well as postponement of tax payments, reduction of insurance premiums, and other measures of state support for entrepreneurs. An effective state tax policy in difficult epidemiological conditions, which necessitates a partial or complete shutdown of some industries, will contribute to a successful way out of the crisis and strengthen the economic security of the state. The article also suggests possible tax measures so that taxpayers do not feel the pressure of an excessive tax burden where it is not required, both during the pandemic and on the way out of the crisis situation. Contribution of the authors: the authors contributed equally to this article. The authors declare no conflicts of interests.

ОСОБЛИВОСТІ ОРГАНІЗАЦІЇ ТА ПРОВЕДЕННЯ ПЕРВИННОГО ФІНАНСОВОГО МОНІТОРИНГУ СУБ’ЄКТАМИ ПОДАТКОВОГО КОНСУЛЬТУВАННЯ

The issue of primary financial monitoring by tax consulting entities requires additional research, which is due to both the peculiarities of the formation of the tax consulting institute in Ukraine and the priority tasks of financial monitoring. In this context, it should be noted that the updated legislation on financial monitoring raises certain questions for such entities. The economic realities are that, on the one hand, tax consulting is aimed at helping taxpayers and should focus on their interests in taxation matters, and on the other hand, there is a legally established strict responsibility of specially defined subjects of primary financial monitoring for non-compliance with the rules of such monitoring. It was established that the subjects of primary financial monitoring are only legal and natural persons - entrepreneurs who provide tax consulting services. Individuals who conduct independent professional tax consulting activities, as well as tax and fee consultants who are full-time employees of the enterprise, are not subjects of primary financial monitoring. The article summarizes the duties of business entities that provide tax consulting in three main areas: registration with the State Financial Monitoring Service of Ukraine; ensuring proper organization and conducting primary financial monitoring and applying a risk-oriented approach; notification of negative financial transactions of clients and other information provided by law. Problematic issues of organization and implementation of primary financial monitoring by tax consulting entities in the specified directions are highlighted. The main focus is on the organization of work on conducting primary financial monitoring by business entities - legal entities.

Tax governance: how the EU supports third countries

Abstract This paper aims to provide an analysis of the legislative framework that regulates the inclusion of clauses on good governance in tax matters, in the agreements concluded between the European Union, with its Member States, and third countries. We provide a representation of the regulatory pathway from a set of standards on tax good governance according to the principles of transparency, exchange of information and fair tax competition towards a common EU external strategy for effective taxation. Agreements that the European Union has either in place or negotiating with countries and regions around the world are an excellent tool in fighting unfair trade practices and promoting international standards on good governance in the tax area, and set the basis for a fair competition in the economy of developing countries: a strong tax administration and institutions responsible for fighting illicit financial flows in developing countries can contribute to erase poverty and inequalities while promoting good governance and state-building.

Proceedings in Tax Matters Before the Supreme Administrative Court during the COVID-19 Pandemic (2020 – July 2021)

Abstract In Poland, the administration of justice, including in tax matters, is exercised by the provincial administrative court in the first instance, and the Supreme Administrative Court, as an appeal (cassation) court. In this article, its author discusses the repeatedly changing rules of conduct in tax matters before the Supreme Administrative Court during the COVID-19 pandemic (for the period 2020 – July 2021). The almost one-and-a-half-year duration of the pandemic allowed for the formulation of conclusions relating to both the legal solutions and the practice of litigation in tax matters before the Supreme Administrative Court during this period. In the work, the author presents his conclusions based on the judicature of the Supreme Administrative Court and the available statistical data on the completed court hearings and closed sessions, as well as resolved cassation complaints in tax matters.

Tax crimes in Italy using accounting documents

Contemporary document research involves the need to use the latest technologies and analytical techniques that provide the most complete possible knowledge of contemporary issues and methods of document research. Documents are used to record legal actions and events of legal significance. By their essence, they are therefore closely related to the sphere of rights and obligations of a specific person or institution. Crimes against documents pose a threat to the proper functioning of the state and thus the development of every enterprise. They affect, directly or indirectly, the misallocation of financial resources at the disposal of an enterprise. Forging documents may be aimed at obtaining unauthorized access to specific sources of financing, influencing key management decisions made in the company, or, finally, concealing inconvenient facts. On the other hand, the social harm suffered as a result of forging documents of evidence significance in tax matters may be enormous. For this reason, it is necessary to deepen the knowledge of the dynamics characterizing document forgery in the sphere of economic activity in order for the state to activate mechanisms able to prevent this type of crime. The article describes the issues of selected tax frauds in Italy with the use of accounting documents.

The Commission's Burden of Proof in Respect of Fiscal State Aid Following the ECJ Decision in the Spanish Sports Clubs Case

The ECJ, in European Commission v. Fútbol Club Barcelona (Case C-362/19 P), ruled that the special tax regime for certain Spanish sports clubs constitutes State aid, annulling the previous decision of the General Court of the European Union and endorsing the European Commission's decision. In this case, the burden of proof that falls on the Commission in State aid procedures in tax matters was particularly contentious. This article provides commentary on the decision.

Is taxation being effectively used to promote public transport in Europe?

Public transport is a pivotal utility in increasing the long-term sustainability of cities. Consequently, there has been a growing interest in promoting a sustainable modal shift that reduces dependence on private vehicle use. This strategy has involved several specific actions, among them employing price differentiation between the two substitutes considered in this research – public transport and private cars. Governments can influence fares in different ways. However, fiscal policy governing applicable taxes is one that is often neglected in the literature. This paper investigates the relationship between the market share of public transport and taxation – in particular, value added tax (VAT), which is levied on three main products: public transport fares, fuel, and vehicle ownership. The results show that taxes matter, but not all taxes are determinant. A lower VAT rate on public transport fares and a higher tax rate on vehicle ownership can lead to an increase in public transport's market share. Taxing car utilization through VAT on fuel does appear to be significant.

An Analysis of Diverse Unilateral Digital Tax Measures in Asian Countries

The article aims to discuss the digital tax landscape in Asian countries, including briefly summarizing the unilateral measures implemented by the Asian countries. After a critical analysis of these unilateral measures and their impact on multinationals and the Asian economy, it concludes with the need for effective regional organizations in Asia to enhance cooperation in tax matters and to have a unanimous say on the global platform.

Commission

This overview highlights the Commission’s (i) proposal to follow the OECD agreement on Pillars One and Two as regards the design of the EU single corporate tax rulebook, (ii) proposal for a 6th Anti-Money Laundering Directive, (iii) proposal to continue authorizing Germany to exclude the right to deduct input VAT for certain supplies for private purposes, (iv) provision of technical rules on automated exchange of information related to an import scheme, (v) decision to appeal the General Court’s decision on the Amazon State aid case in Luxembourg, and (vi) several actions brought against certain Member States on diverse tax matters.

The concept of abuse in tax matters within European Union law

The principle of prohibition of abuse of rights is applicable in fields as varied as the free movement of goods (judgment of 10 of January 1985, Association des Centres distributeurs Leclerc and Thouars Distribution, Case 229/83), freedom to provide services (judgment of 3 of February 1993, Veronica Omroep Organisatie, Case C‑148/91), public service contracts (judgment of 11 of December 2014, Azienda sanitaria locale n. 5 Spezzino and Others, Case C‑113/13), freedom of establishment (judgment of 9 of March 1999, Centros, Case C‑212/97), company law (judgment of 23 of March 2000, Diamantis, Case C‑373/97), social security (judgments of 2 of May 1996, Paletta, Case C‑206/94; of 6 of February 2018, Altun and Others, Case C‑359/16; and of 11 of July 2018, Commission v Belgium, Case C‑356/15), transport (judgment of 6 of April 2006, Agip Petroli, Case C‑456/04), social policy (judgment of 28 of July 2016, Kratzer, Case C‑423/15), restrictive measures (judgment of 21 of December 2011, Afrasiabi and Others, Case C‑72/11) and value added tax (judgment of 21 of February 2006, Halifax and Others, Case C‑255/02) and, in that sense, the EU principle of prohibition of abuse of law has been developing within the jurisprudence of the Court of Justice of the European Union since the mid-1970s, addressing it in multiple ways, not only in the face of different factual assumptions, which would be understandable and even necessary but, in its evolution, treating asymmetrically the handling of the requirements that must be met to reach the conclusion of the existence of practices abusive.

Strengthening financial integrity and combating economic crimes in the post-pandemic Caribbean: what lies ahead!

PurposeThis paper aims to map key strategic concerns that Commonwealth Caribbean States will face in combating economic crimes and strengthening financial integrity in the post-pandemic era.Design/methodology/approachHorizon scanning was used to conduct a qualitative policy analysis of key regulatory developments in international anti-money laundering and combating the financing of terrorism (AML/CFTP) and tax governance, from the perspective of Commonwealth Caribbean countries.FindingsThis paper finds that the COVID-19 pandemic might widen several fault lines, along the Global North/South axis, in international AML/CFTP and tax regulatory governance. These include the “sustainable development” gap in AML/CFTP norm-making; making the Financial Action Task Force fit-for-purpose; renewed campaigns against “harmful tax competition”; and international commitment to scaling up technical assistance to combat economic crimes in developing countries. It questions the sustainability of the prevailing “levelling the playing field” regulatory approach to AML/CFTP and tax matters and whether serious consideration ought not to be given to mainstreaming “differential treatment” in international AML/CFTP and tax standards, for resource-strapped Caribbean countries.Originality/valueTo the best of the author’s knowledge, this paper is the first attempt to assess the strategic policy risks and challenges that will arise from balancing economic recovery and fighting economic crimes by small and vulnerable Commonwealth Caribbean States in the post-pandemic era.

The OECD as the Future International Tax Organization: An Inevitable Course of Events?

Over the years, the increasing process of tax law internationalization may be observed due to which tax cooperation between states expands and may take various forms. The leading international organization that creates a platform for the cooperation of states on tax matters and provides expertise in the scope of tax law is the Organization for Economic Co-operation and Development (OECD). This article focuses on the role that the OECD performs in the international arena and analyses its increasing significance over the decades as the organization providing platform for states to collaborate on tax matters. Furthermore, considering changes in the international tax landscape, the article examines whether they make the OECD more likely to become an international tax organization and concludes that it is in the gradual process of transformation into a international tax organization.

On Data, Media, and the Deconstruction of the Administrative State

On Data, Media, and the Deconstruction of the Administrative State

Global Telecom Holding v. Canada: Interpreting and Applying Reservations and Carve-Outs in Investment Treaties

Within investment treaties, reservations and carve-outs perform a crucial role in balancing investment protection and liberalization with competing regulatory interests of States. While carve-outs for taxation matters have been interpreted and applied by a significant number of investment treaty tribunals, carve-outs concerning other issues and reservations have been adjudicated much less frequently. The recent Award in Global Telecom Holding v. Canada raises several key questions of treaty interpretation concerning a reservation by Canada in the Canada–Egypt Bilateral Investment Treaty (BIT), and a carve-out, which removed from investor-State arbitration decisions by either Party not to permit the establishment or acquisition of a business enterprise. This case comment critically analyses the approach to interpreting reservations and carve-outs adopted in the Award and the associated Dissenting Opinion. I suggest that it is through the application of the ordinary rules of treaty interpretation that adjudicators will locate the appropriate limits of reservations and carve-outs, and there is little justification for adopting a restrictive interpretation of such provisions. The case also demonstrates that interpretative inferences based on one treaty party’s other investment treaties must be approached with care. reservations, carve-outs, exceptions, treaty interpretation, national treatment, national security

EU Whistle-Blower Directive: Taking Taxpayers’ Rights Seriously The title of this article is inspired by the title of Ronald Dworkin’s book Taking Rights Seriously (1st edn. Harvard University Press 1977).

On 23 October 2019, the European Parliament and the Council adopted the Whistle-blower Directive. This article raises a fundamental question: does the Whistle-blower Directive respect taxpayers’ rights? In order to answer this question, the article first deals with two other preliminary issues. Firstly, it is asked whether the European Union has the competence to introduce whistle-blower protection, especially with regard to tax matters. Secondly, the article expounds on the impact of the Whistle-blower Directive on tax matters.

The most favoured nation clause in tax matters from the perspective of the EU and the GATT

The most favoured nation clause has been one of the most complex elements of tax law. This results from the fact that it concerns the sensitive matter of the sovereignty of states related to fiscal matters and originates from various legal acts that have been established at international, European Union (EU) and national law levels. Additionally, it is related to the EU’s dual membership of the World Trade Organization (WTO). The added value of the article is the endeavour to define the mutual relationship between the most favoured nation clause expressed in Art. 1 (1) of the GATT, resulting from EU law and Art. 24 of the OECD MC that is the template for bilateral agreements of double tax avoidance. The aim of the research is a comparison of the above-mentioned regulations in order to establish what kind of relationship exists between those regulations. In conclusion, it should be considered that in the current legal state, Art. 1 (1) of the GATT does not constitute the basis for the interpretation of bilateral double taxation avoidance agreements, unless their provisions are consistent with each other. The following research methods have been applied in the article: legal comparison, descriptive and analytical.

Religion and informational influence: Evidence from individual tax behavior in the U.S.

AbstractThis article seeks to understand whether and how religion plays a role in people's information search and dissemination behavior in the domain of individual taxes. Survey data show that religious participants exhibit greater uncertainty about a tax filing decision than atheist participants, and Google search data reveal that the U.S. tax season is marked by a notably higher search interest in religious teachings on taxes. Interestingly, people's tendency to ask “why” questions about taxes and their online search interest in tax loss strategies are greater in states with higher religiosity. In parallel, users from highly versus less religious states include more interrogatives and fewer certainty words in their tax‐related tweets posted during the 2019 U.S. federal government shutdown. These findings collectively suggest that people's certitude about individual tax matters decreases with religiosity.