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INTRODUCTION TO INTERNATIONAL TAX LAW
Содержание
- 1. INTRODUCTION TO INTERNATIONAL TAX LAW
- 2. R&C BERNALES ABOGADOSIntroduction to International Tax Law
- 3. R&C BERNALES ABOGADOSIntroduction to International Tax LawCONCEPT AND GOALS
- 4. R&C BERNALES ABOGADOSCONCEPT AND GOALS“International Tax Law”
- 5. R&C BERNALES ABOGADOSCONCEPT & GOALSInternational (Income) tax
- 6. R&C BERNALES ABOGADOSCONCEPT & GOALSIssues under income
- 7. R&C BERNALES ABOGADOSCONCEPT & GOALSInternational tax law.
- 8. R&C BERNALES ABOGADOSCONCEPT & GOALSGOALS:Inter-nation equityPromoting fairnessEnhancing
- 9. R&C BERNALES ABOGADOSCONCEPT & GOALSPractical issues faced
- 10. R&C BERNALES ABOGADOSIntroduction to International Tax LawJURISDICTION TO TAX
- 11. R&C BERNALES ABOGADOSJURISDICTION TO TAXResidence – SourceResidenceIndividualsLegal entitiesTreaty issuesSourceEmployment and Personal ServicesBusiness incomeInvestment incomeCapital gains
- 12. R&C BERNALES ABOGADOSJURISDICTION TO TAXNexus country -
- 13. R&C BERNALES ABOGADOSJURISDICTION TO TAX - ResidenceResidence
- 14. JURISDICTION TO TAXResidence of Individuals (II)Facts and
- 15. JURISDICTION TO TAXResidence of Individuals (III)Presumptions: Individuals
- 16. JURISDICTION TO TAXResidence of legal entitiesCorporations:Place of
- 17. JURISDICTION TO TAXTreaty issuesArt. 4(1) OECD MC:(…)
- 18. JURISDICTION TO TAXTreaty issuesArt. 4(2) OECD MC
- 19. JURISDICTION TO TAXResidence of legal entitiesArt. 4(3)
- 20. JURISDICTION TO TAX – SourceInternational custom: A
- 21. JURISDICTION TO TAX – Source What is
- 22. JURISDICTION TO TAX – SourceEmployment and Personal
- 23. JURISDICTION TO TAX - SourceEmployment and Personal
- 24. JURISDICTION TO TAX – Source Business IncomeOECD
- 25. JURISDICTION TO TAX - SourceInvestment IncomeInvestment income
- 26. JURISDICTION TO TAX - SourceInvestment Income (II).
- 27. JURISDICTION TO TAX - SourceInvestment Income (III).
- 28. JURISDICTION TO TAX - SourceCapital gainsOECD MC:
- 29. Introduction to International Tax LawDOUBLE TAXATION RELIEFR&C BERNALES ABOGADOS
- 30. DOUBLE TAXATION RELIEF – Concept & TypesInternational
- 31. DOUBLE TAXATION RELIEF(International) Economic Double Taxation:Multiple taxation
- 32. DOUBLE TAXATION RELIEFThree types of double taxation
- 33. DOUBLE TAXATION RELIEFOther types of conflicts:Definitions of
- 34. DOUBLE TAXATION RELIEFRemedies to prevent double taxation:UnilateralBilateralMultilateralThe
- 35. DOUBLE TAXATION RELIEF - METHODSRelief mechanisms (Methods):Deduction ExemptionCredit (Imputation)R&C BERNALES ABOGADOS
- 36. DOUBLE TAXATION RELIEFDEDUCTION MethodTaxation on the worldwide
- 37. DOUBLE TAXATION RELIEFDEDUCTION Method (II)Effect: Residents earning
- 38. DOUBLE TAXATION RELIEFEXEMPTION MethodTaxation of residents on
- 39. DOUBLE TAXATION RELIEFEXEMPTION Method (II). Effects:Elimination of
- 40. DOUBLE TAXATION RELIEFEXEMPTION Method (III). Types:Ordinary Exemption Exemption with progressionFull ExemptionPartial ExemptionParticipation exemptionR&C BERNALES ABOGADOS
- 41. DOUBLE TAXATION RELIEFEXEMPTION Method (IV):Ordinary Exemption Exemption
- 42. DOUBLE TAXATION RELIEFEXEMPTION Method (V):Full ExemptionPartial Exemption:
- 43. DOUBLE TAXATION RELIEFEXEMPTION Method (VI)Partial exemption. Requirements
- 44. DOUBLE TAXATION RELIEFEXEMPTION Method (VII)Participation exemption Exemption of
- 45. DOUBLE TAXATION RELIEFEXEMPTION Method (VIII). DrawbackShifting of
- 46. DOUBLE TAXATION RELIEFCREDIT MethodForeign taxes paid by
- 47. DOUBLE TAXATION RELIEFCREDIT Method (II). Effects. Eliminate
- 48. DOUBLE TAXATION RELIEFCREDIT Method (III). Effects (II)Resident
- 49. DOUBLE TAXATION RELIEFCREDIT Method (IV). LimitationsOverall (worldwide) Country-by-country Item-by-itemR&C BERNALES ABOGADOS
- 50. DOUBLE TAXATION RELIEFCREDIT Method (V). Indirect (foreign)
- 51. DOUBLE TAXATION RELIEFCREDIT Method (VI). Possible effect:
- 52. DOUBLE TAXATION RELIEFEXEMPTION vs CREDIT MethodsBoth authorized
- 53. DOUBLE TAXATION RELIEFEXEMPTION vs CREDIT Methods (II)Both
- 54. DOUBLE TAXATION RELIEFEXEMPTION vs CREDIT Methods (III)Most
- 55. Скачать презентанцию
R&C BERNALES ABOGADOSIntroduction to International Tax Law - AgendaConcept and goalsJurisdictionDouble taxation reliefSee “International Tax Primer”, B.J. Arnold and M.J. McIntyre
Слайды и текст этой презентации
Слайд 1R&C BERNALES ABOGADOS
INTRODUCTION TO INTERNATIONAL TAX LAW
Dr Roberto Bernales
University of
Deusto (Bilbao, Spain)
Слайд 2R&C BERNALES ABOGADOS
Introduction to International Tax Law - Agenda
Concept and
goals
Jurisdiction
Double taxation relief
See “International Tax Primer”, B.J. Arnold and M.J.
McIntyre
Слайд 4R&C BERNALES ABOGADOS
CONCEPT AND GOALS
“International Tax Law” = misnomer
Scope
All tax
issues arising under a country's tax laws that include a
foreign elementMainly income tax laws
Other taxes
Слайд 5R&C BERNALES ABOGADOS
CONCEPT & GOALS
International (Income) tax law: two dimensions:
Taxation
of Resident individuals and corporations on income in foreign countries
(taxation of foreign income)Taxation of Nonresidents on income arising domestically (taxation of nonresidents)
Слайд 6R&C BERNALES ABOGADOS
CONCEPT & GOALS
Issues under income tax laws:
Cross-border trade
in goods and services
Cross-border manufacturing by MNE
Cross-border investment by individuals
or investment fundsTaxation of individuals who work or do business in a country other than their residence country
Слайд 7R&C BERNALES ABOGADOS
CONCEPT & GOALS
International tax law. Scope beyond income
tax:
Estate taxes/ Inheritance taxes
Gift taxes
Wealth taxes
Sales taxes
Customs taxes
Слайд 8R&C BERNALES ABOGADOS
CONCEPT & GOALS
GOALS:
Inter-nation equity
Promoting fairness
Enhancing the position of
the country in the world economy
Capital-export and capital-import neutrality
Слайд 9R&C BERNALES ABOGADOS
CONCEPT & GOALS
Practical issues faced by the professional:
Intersection
domestic-foreign tax law
Differences in the legal systems: concepts, institutions, legal
traditions, accounting principles, etc.
Слайд 11R&C BERNALES ABOGADOS
JURISDICTION TO TAX
Residence – Source
Residence
Individuals
Legal entities
Treaty issues
Source
Employment and
Personal Services
Business income
Investment income
Capital gains
Слайд 12R&C BERNALES ABOGADOS
JURISDICTION TO TAX
Nexus country - person obtaining the
income: residence jurisdiction
Nexus country – activities generating the income: source
jurisdiction
Слайд 13R&C BERNALES ABOGADOS
JURISDICTION TO TAX - Residence
Residence of Individuals
Facts and
circumstances. Objective manifestations of joining the economic and social life
of a country:Dwelling
Income producing activities
Family
Social ties
Arbitrary test: number of days of presence, e.g. 183-day test
Слайд 14JURISDICTION TO TAX
Residence of Individuals (II)
Facts and circumstances + objective
tests = presumptions to establish residence = certainty and fairness
R&C
BERNALES ABOGADOS
Слайд 15JURISDICTION TO TAX
Residence of Individuals (III)
Presumptions:
Individuals present in a
country for 183 days in a taxable year unless they
do not have a dwelling and are not citizensIndividuals having a dwelling unless they also have a dwelling in another country
Citizens unless they have a dwelling abroad and are outside more than 183 days
Individuals cannot relinquish residence until residence in another country
R&C BERNALES ABOGADOS
Слайд 16JURISDICTION TO TAX
Residence of legal entities
Corporations:
Place of Incorporation
Place of (Effective)
Management
Residence of the shareholders
Other legal entities:
Place of organization
Place of management
R&C
BERNALES ABOGADOS
Слайд 17JURISDICTION TO TAX
Treaty issues
Art. 4(1) OECD MC:
(…) the term resident
of a Contracting state means any person who, under the
laws of that State, is liable to tax therein by reasons of his domicile, residence, place of management or any other criterion of a similar nature (…)R&C BERNALES ABOGADOS
Слайд 18JURISDICTION TO TAX
Treaty issues
Art. 4(2) OECD MC Tie-breaker rules:
Place of
permanent home
Centre of the vital interests
Habitual abode
Citizenship
MAP
R&C BERNALES ABOGADOS
Слайд 19JURISDICTION TO TAX
Residence of legal entities
Art. 4(3) OECD MC: Legal
entities residence: POEM.
Other tie-breaker rules:
Place of Incorporation
Dual resident =
not resident in either countryR&C BERNALES ABOGADOS
Слайд 20JURISDICTION TO TAX – Source
International custom:
A country has the
primary right to tax income that has its source in
that countryCountry of residence expected to provide relief from double taxation if its residence jurisdiction overlaps the source jurisdiction of another country
R&C BERNALES ABOGADOS
Слайд 21JURISDICTION TO TAX – Source
What is “source”?
Most countries: vague
rules (especially for business income)
Most tax treaties do not include
explicit source rules for business incomeOECD MC vs UN MC: limitation of source jurisdiction
R&C BERNALES ABOGADOS
Слайд 22JURISDICTION TO TAX – Source
Employment and Personal Services
Source country
= where services are performed
If several countries = allocation based
on the time performing in each countryR&C BERNALES ABOGADOS
Слайд 23JURISDICTION TO TAX - Source
Employment and Personal Services (II)
Limit of
source jurisdiction on dependent personal services income if (all requirements
met):Employee present in SC ≤ 183 days
Payment by a non-resident
Payment not allocated to a PE in SC
R&C BERNALES ABOGADOS
Слайд 24JURISDICTION TO TAX – Source
Business Income
OECD and UN MC:
taxable only if attributable to a PE
US MC: Source rule
approachR&C BERNALES ABOGADOS
Слайд 25JURISDICTION TO TAX - Source
Investment Income
Investment income (dividends, interest, royalties)
derived by non-residents usually taxable through WHT
Capital gains are not
usually subject to WHTR&C BERNALES ABOGADOS
Слайд 26JURISDICTION TO TAX - Source
Investment Income (II). Source rules:
Dividends and
Interests: country of residence of the payer (Arts. 10 and
11 OECD and UN MC)Royalties: where royalties arise = typically the country providing legal protection
OECD MC: exclusive rights to residence country. No source rules
UN MC: shared taxing rights. SC = resident country of the payer (or PE)
R&C BERNALES ABOGADOS
Слайд 27JURISDICTION TO TAX - Source
Investment Income (III).
Shared taxing rights
between RC and SC = limited WHT in the SC
DTTs
with Zero WHT Assumptions:
Equal flow of investments
Tax jurisdiction of SC will be exercised by RC
Advantages and Disadvantages
R&C BERNALES ABOGADOS
Слайд 28JURISDICTION TO TAX - Source
Capital gains
OECD MC: SC the residence
country of the seller. Exception
Business property
Immovable property
UN MC: Gains for
sales not specifically mentioned in the treaty maybe taxed in RC and in SCR&C BERNALES ABOGADOS
Слайд 30DOUBLE TAXATION RELIEF – Concept & Types
International (Juridical) Double Taxation:
The
imposition of comparable direct taxes (income-wealth-inheritance) taxes
by two or
more sovereign countries on the same item (income-assets)
of the same taxable person
for the same taxable period
R&C BERNALES ABOGADOS
Слайд 31DOUBLE TAXATION RELIEF
(International) Economic Double Taxation:
Multiple taxation of the same
items of economic income in different taxpayers, e.g.
Company –
Shareholder:Parent company
Individual shareholder
Partnership – Partner
Trust - Beneficiary
R&C BERNALES ABOGADOS
Слайд 32DOUBLE TAXATION RELIEF
Three types of double taxation in relation to
3 types of conflicts:
Source – Source
Residence – Residence
Residence – Source
R&C
BERNALES ABOGADOS
Слайд 33DOUBLE TAXATION RELIEF
Other types of conflicts:
Definitions of Income
Timing and tax
accounting rules
Arm´s Length Prices
Rules to prevent tax avoidance
R&C BERNALES ABOGADOS
Слайд 34DOUBLE TAXATION RELIEF
Remedies to prevent double taxation:
Unilateral
Bilateral
Multilateral
The methods for relieving
international taxation refer both to juridical and economic double taxation
R&C
BERNALES ABOGADOS
Слайд 35DOUBLE TAXATION RELIEF - METHODS
Relief mechanisms (Methods):
Deduction
Exemption
Credit (Imputation)
R&C BERNALES
ABOGADOS
Слайд 36DOUBLE TAXATION RELIEF
DEDUCTION Method
Taxation on the worldwide income of residents
and deduction of the foreign taxes paid from the taxable
incomeR&C BERNALES ABOGADOS
Слайд 37DOUBLE TAXATION RELIEF
DEDUCTION Method (II)
Effect: Residents earning foreign income and
paying foreign income taxes are taxed at a higher combined
tax rate than the rate applied to domestic-source incomeFavourable for domestic investment
R&C BERNALES ABOGADOS
Слайд 38DOUBLE TAXATION RELIEF
EXEMPTION Method
Taxation of residents on their domestic income
and exemption of their foreign-source income
R&C BERNALES ABOGADOS
Слайд 39DOUBLE TAXATION RELIEF
EXEMPTION Method (II). Effects:
Elimination of Residence – Source
DT
Exemption of all foreign-source income = Taxation on territorial basis
Exemption
of certain kinds of income (e.g. business income, investment income)R&C BERNALES ABOGADOS
Слайд 40DOUBLE TAXATION RELIEF
EXEMPTION Method (III). Types:
Ordinary Exemption
Exemption with progression
Full
Exemption
Partial Exemption
Participation exemption
R&C BERNALES ABOGADOS
Слайд 41DOUBLE TAXATION RELIEF
EXEMPTION Method (IV):
Ordinary Exemption
Exemption with progression
Foreign source
income included to determine average tax rate on taxable (domestic)
incomeR&C BERNALES ABOGADOS
Слайд 42DOUBLE TAXATION RELIEF
EXEMPTION Method (V):
Full Exemption
Partial Exemption: exemption of foreign-source
income taxed at rates comparable to the country of residence
rateR&C BERNALES ABOGADOS
Слайд 43DOUBLE TAXATION RELIEF
EXEMPTION Method (VI)
Partial exemption. Requirements of the method:
Source
income and expenses rules
Anti-avoidance rules
Expense allocation rules
R&C BERNALES ABOGADOS
Слайд 44DOUBLE TAXATION RELIEF
EXEMPTION Method (VII)
Participation exemption
Exemption of dividends derived from
foreign companies in which the resident shareholder have a minimum
ownership interestR&C BERNALES ABOGADOS
Слайд 45DOUBLE TAXATION RELIEF
EXEMPTION Method (VIII). Drawback
Shifting of tax burden from
the income earner to the income payer in some circumstances
R&C
BERNALES ABOGADOS
Слайд 46DOUBLE TAXATION RELIEF
CREDIT Method
Foreign taxes paid by residents on foreign
source income reduce the domestic taxes payable on the same
incomeR&C BERNALES ABOGADOS
Слайд 47DOUBLE TAXATION RELIEF
CREDIT Method (II). Effects.
Eliminate residence – source
double taxation
Usually limited to the amount of the domestic tax
payable on the foreign source income (ordinary tax credit)R&C BERNALES ABOGADOS
Слайд 48DOUBLE TAXATION RELIEF
CREDIT Method (III). Effects (II)
Resident taxpayers are treated
equally from the perspective of the total (domestic and foreign)
tax burden, except if foreign tax > domestic taxNeutral respect to place of investment (domestic – abroad)
R&C BERNALES ABOGADOS
Слайд 49DOUBLE TAXATION RELIEF
CREDIT Method (IV). Limitations
Overall (worldwide)
Country-by-country
Item-by-item
R&C BERNALES
ABOGADOS
Слайд 50DOUBLE TAXATION RELIEF
CREDIT Method (V). Indirect (foreign) tax credit =
Credit granted
To a domestic corporation for the foreign income taxes
paid by a foreign affiliated companyWhen the domestic corporation receives the dividend distributed by its foreign affiliate
Equal to the underlying foreign tax paid by the foreign affiliate on the income out of which the dividend was paid
R&C BERNALES ABOGADOS
Слайд 51DOUBLE TAXATION RELIEF
CREDIT Method (VI).
Possible effect: discouraging repatriate benefits.
Solution?:
Taxation on accrual basis:
CFC rules
Offshore investment fund rules
R&C BERNALES ABOGADOS
Слайд 52DOUBLE TAXATION RELIEF
EXEMPTION vs CREDIT Methods
Both authorized by OECD and
UN MC
Equal results if the foreign taxes paid by the
foreign company (plus WHT) are at least equal to domestic taxes.Even if foreign taxes < domestic tax, deferment until dividends are paid
R&C BERNALES ABOGADOS
Слайд 53DOUBLE TAXATION RELIEF
EXEMPTION vs CREDIT Methods (II)
Both systems require rules:
Resident
qualified taxpayers
Type of qualified income
Source of income
Allocation of expenses
CFC
(current or accrual taxation)Foreign losses
Computation of foreign Co income
R&C BERNALES ABOGADOS
Слайд 54DOUBLE TAXATION RELIEF
EXEMPTION vs CREDIT Methods (III)
Most important difference: requirement
of different rules
Credit: definition of creditable foreign taxes
Exemption: determination when
foreign source income is subject to a level of foreign tax comparable to domestic tax R&C BERNALES ABOGADOS
