Territorial Taxation Research Articles

Book Reviews

Book Reviews

Tax Competition and the Trend toward Territoriality

Tax competition is with us to stay, and the drive toward territorial taxation of multinationals will continue. Ultimately, it makes sense to tax corporations on a source basis because corporate residence is not very meaningful. But if the correct reforms to CFC rules are undertaken together with enhanced transfer pricing enforcement (e.g., by combining the arm's length standard with formulary solutions, as I have suggested elsewhere), such trends are not necessarily harmful to maintaining a stable corporate tax base.

Key Practical Issues to Eliminate Double Taxation of Business Income

This article summarizes the panel proceedings for Subject 2 at the 65th Congress of the International Fiscal Association held in Paris on 13 September 2011. Subject 2 considered the practical difficulties encountered in both worldwide taxation systems and territorial taxation systems in eliminating double taxation of business income.

An update on the taxation of trusts in Israel

The taxation of trusts was part of an overall tax reform in Israel which revised the tax system from territorial taxation to personal taxation in 2003. Due to the complexity of the topic, a special committee was appointed—the Committee for the Taxation of Trusts (the ‘Committee’)—to recommend on the manner in which trusts should be taxed in Israel. Headed by Ms Frida Israeli, CPA, a senior officer of the Tax Authority, the Committee's members included public servants and senior practitioners from the private sector, including Meir Linzen, Advocate, Alex Hilman, CPA and Alon Kaplan, Advocate. The Committee's recommendations formed the basis for the Taxation of Trusts Law, effective as of 1 January 2006 (the ‘Law’). The Law defines a number of different categories of trusts. For the purposes of this article, we will broadly mention only the foreign settlor trust and the Israeli resident trust. As a basic principle, income of the foreign settlor trust is not taxable in Israel and income of the Israeli resident trust is subject to tax and reporting obligations in Israel.