International Tax: When Countries go Rogue – a summary article

Table of Contents

VERSION 1 – Summary: Tax Planning International Article on “Taxpayers Going Rogue, summarized article by Cecilia Stassen

With multinational entities and digital companies becoming an everyday occurance and the status quo of doing business, governments are concerned with the shifting of profits away from the jurisdiction in which the entities mainly operate.

In light of the above the BEPS project was started to deal with this actual or perceived shift of profits. The project started in 2013, but is only now, 5 years down the line really being implemented. With the fast pace in which the digital economy is changing and the simplicity with which cross-border trade can happen, the issues under discussion in 2013 has likely changed drastically or expanded. The result is that BEPS is not adequately addressing all methods of profit shifting.

As a result of the above governments are starting to discuss or even implement domestic legislation to tax these digital companies. For instance, to tax the companies on their gross revenues, based on where users are located and advertising revenue generated.

The risk of a company or group being subject to tax on the same income in two jurisdictions are increasing and this shift in policy by the various governments are forcing international enterprises to re-evaluate their international structures on a continual basis. The entities can no longer assume that their structures will remain tax efficient.

Companies are urged to consider the following when looking at their structures:

  • Who are suppliers, customers and investors and where are each situated;
  • Where is value created and how does tis compare with where income is generated;
  • Keep up to date with proposals to change legislation and understand how it will impact their structure, and also those of their suppliers as some additional taxes may have a financial impact in the form of higher costs of inputs;
  • Engage with industry leaders to enter into consultations with the authorities regarding proposed changes;
  • And ultimately, act early.

VERSION 2 – Tax Planning International Article on “Taxpayers Going Rogue, summarized article by Nataly Marchbank

Lawrence Field, International Tax: When Countries go Rogue Bloomberg BNA 1 (2018)

Article summarized:

• Cash strapped tax authorities looking to entice businesses to get them to domicile themselves within their economies.

• Presents a real risk of suffering double taxation as tax authorities are taking unilateral action.

• Globalisation has transformed the world in which tax legislation was originally intended for.

• BEPS began in 2013 initiative to protect tax base of nations in a coordinated way by way of a coherent approach.

• Many countries moved relatively quick and after 5 years proposals were being implemented.

• BEPS only fixed partly the problem, as BEPS initiatives catered for the 2008 financial crisis and nor problems for 2020.

• An area that has moved rapidly is the digital economy.

• Tax competition amongst states are more prevalent and challenging the traditional methods of taxing.

• Countries such as UK, EU and Italy are looking at ways to tax digital transactions. This ranges from taxing digital companies where they earn their income rather than taxing profits to taxing gross revenues on where users are located to levying on certain digital transactions.

• Traditional business models are being disrupted by these possible taxing scenarios due to a possible threat of good old-fashioned trade wars.

• Companies need to be nimble in the face of these new challenges and understanding the changing landscape and evaluate how this may impact their business models and seek out specialist tax advice to overcome any confusion regarding such changes.

Shopping Cart
Scroll to Top

Compare Programmes

Choose the track that fits your practice focus. All programmes are practitioner-taught, cohort-based, and validated by Middlesex University.

Dimension Transfer Pricing International Taxation South African Tax Law
Jurisdictional audience Global audience, covers all jurisdictions Global audience, covers all jurisdictions South Africa specific, relevant to SADC region
Ideal for TP managers, advisors, in-house tax teams, analysts moving into TP Advisors and managers dealing with cross-border rules, treaties, planning Practitioners working with the SA Income Tax Act, cases, compliance
Core focus Methods, comparables, DEMPE, documentation, audits, dispute defence Treaties, source vs residence, anti-avoidance, PE, relief from double tax Statutory interpretation, case law, assessments, objections, local practice
Primary tools OECD TP Guidelines, UN Manual, BEPS Actions 8–10, 13, case law OECD and UN Models, MLI, BEPS 1.0 and 2.0, domestic rules, cases Income Tax Act, SARS practice notes, Tax Administration Act, SA cases
Assessment style Case-based assignments, file reviews, short written defences Problem questions, treaty interpretation, position papers Problem questions, statutory analysis, case commentary
Typical outcomes Build defensible TP files and strategies, improve audit readiness Design cross-border structures within rules, mitigate double tax Apply SA tax law accurately, manage reviews and disputes
Entry point Start with PG Certificate, progress to PG Diploma, then MSc, or enter later with suitable experience or credits.

Awards Ladder

Award Best for What you achieve Assessment highlights
PG Certificate Foundation to intermediate upskilling Core concepts, frameworks, and applied techniques Short case write ups, timed responses, applied tasks
PG Diploma Expanding technical depth and application Advanced analysis, risk management, documentation quality Integrated case assignments, policy memos, oral defence
MSc Leaders and specialists building authority Capstone project and research backed practice outcomes Research project, viva or presentation, publishable summary

IFF Certificate Courses

Practical, practitioner-led certificates designed for immediate on-the-job application. Each course can stand alone or act as a pathway into our postgraduate tracks.

Dimension Conducting a Transfer Pricing Trial Effectively Managing Tax Teams Indirect Taxation Tax Risk Management
Jurisdictional audience Global audience Global audience Global audience, with local adaptation Global audience
Ideal for In-house tax, TP managers, litigators, advisors preparing for audits, ADR, trial Heads of tax, managers, team leads, controllers, emerging leaders VAT, GST, customs, finance managers, AP, AR, compliance specialists Tax managers, risk officers, controllers, advisors building governance
Core focus Case theory, evidence files, expert reports, witness prep, courtroom strategy Operating models, KPIs, workflows, stakeholder management, coaching VAT design, place of supply, input credits, exemptions, WHT interactions Risk identification, controls, documentation, audit readiness, dispute playbooks
Delivery mode Online, live sessions plus guided self-study Online, live sessions plus guided self-study Online, live sessions plus guided self-study Online, live sessions plus guided self-study
Duration 16 weeks, part-time 16 weeks, part-time 16 weeks, part-time 16 weeks, part-time
Outcomes Confident litigation preparation and defence for TP disputes Stronger execution, clear roles, measurable team performance Reduced VAT errors, better cash flow, fewer surprises at audit Structured governance, fewer findings, faster dispute resolution
Prerequisites TP fundamentals recommended Supervisory experience helpful Basic VAT knowledge helpful General tax experience helpful
Pathway Progress to PG Certificate in Transfer Pricing Progress to Mechanics of Leading Tax Teams, PG Certificate (leadership) Progress to PG programmes, International Tax or SA Tax Law Progress to PG Certificate in International Taxation or Transfer Pricing
Assessment End of module progress assessment

5000-word assignment if PG-Cert option elected
End of module progress assessment

5000-word assignment if PG-Cert option elected
End of module progress assessment

5000-word assignment if PG-Cert option elected
End of module progress assessment

5000-word assignment if PG-Cert option elected