IT Lecture week 1 – Introduction and Overview
Also on YOU TUBE: https://www.youtube.com/watch?v=osqpnK2vSkc
SEE summary of lecture below:
see the new curriculum here: http://iitfconnect.com/?p=1327 – containing details of the course/lecture dates, assignments and tutorials, with links to all the reading materials required.
INDEX TO ALL course reading materials per LECTURE, with hyperlinks to download: New IT Course Web Addresses Index
Lecture 1 presentation slides: IT course 2018 Lecture 1 vr2
Follow curriculum – Reading:
International Tax Primer 3rd Edition Brian Arnold – eBook – Chapter 1
1 Bluebook Citation Form – read for tutorial
1 Reading cases SSRN-id1160925 – read for tutorial
14 16 2018 Anti abuse legislation The Importance of Substance in a Private Equity Fund Context – a good summary of current international tax avoidanceTax avoidance refers to the practice of legally structuring financial activities to minimise tax liability, reducing the amount of tax owed without violating laws. Unlike tax evasion, which is illegal and involves concealing income or misreporting, tax avoidance operates within the framework of the law. Multinational enterprises (MNEs) and individuals often engage in tax planning strategies that reduce tax liabilities... issues
1 INTERNATIONAL OFFSHORE FINANCIAL CENTERS (IOFCs) planning checklist – read for tutorial
1 International Tax – When countries go rogue – Tax Planning International Review – read for tutorial – SEE summary versions here: http://iitfconnect.com/?p=1164
1 Jus Cogens or peremptory international norms eg. unjust enrichment – Max Plank – read for tutorial
Victor Thuronyi Comparative Tax Law – this is a GREAT general book on International Tax and the legal framework applicable, especially:
1.3 Legal Families, page 7
4.1 Tax LawTax laws form the backbone of any nation’s revenue system, setting the rules that govern how individuals and corporations contribute financially to support government functions. These laws define the types of taxes, the applicable rates, and the regulations regarding payment and compliance. They also outline the rights and obligations of taxpayers, ensuring a balanced and fair approach to funding public... and part of the Legal System, page 60
4.3.2 Principle of Legality, page 70
4.3.3 General Limits on Taxing Power, page 72
4.3.6 Nonretroactivity, page 76
4.5.1 Scope of Treaties, page 111
4.5.2 Domestic effect, page 112
4.5.3 Interpretation of Treaties, page 115
4.6 Administrative Law, page 121
5.6 Sham transactions, page 157
5.7 General Anti-Avoidance, 160
Additional supplementary reading:
Basic International Taxation Vol I by Roy Rohatgi – eBook – Chapters 1, 3, 4, 5, 6 & 7 – but as indicated in the lecture and lecture ppt slides
Tutorial and assignment questions, dates and requirements:
Summary of Lecture 1 by Nataly Marchbanks, 2018:
LECTURE 1: INTRODUCTION AND OVERVIEW (2 -page summary of lecture and material)
Understanding International tax planningTax planning is the process of organising and structuring one’s financial affairs in a manner that legally minimises tax liabilities while ensuring compliance with relevant tax laws. The primary objective of tax planning is to reduce the amount of taxes paid, optimise the use of available tax benefits, and preserve wealth. It can be applied at various levels, including personal... & the role of tax advisorsA Tax Advisor is a professional who provides specialised advice to individuals, businesses, and organisations on various tax-related matters. They play a crucial role in guiding clients through complex tax laws and ensuring compliance with the latest regulations while identifying opportunities for tax efficiency. Tax Advisors must stay updated on legislative changes and understand the impact of international tax treaties,...
- In order to be a good international tax advisorA Tax Advisor is a professional who provides specialised advice to individuals, businesses, and organisations on various tax-related matters. They play a crucial role in guiding clients through complex tax laws and ensuring compliance with the latest regulations while identifying opportunities for tax efficiency. Tax Advisors must stay updated on legislative changes and understand the impact of international tax treaties,..., you need to understand the environment of international tax and what the key elements are for International Tax.
What is international tax?
- These are the global tax rules that apply to transactions between two or more countries in the world.
- It encompasses all the tax issues that arise under a country’s tax lawTax laws form the backbone of any nation’s revenue system, setting the rules that govern how individuals and corporations contribute financially to support government functions. These laws define the types of taxes, the applicable rates, and the regulations regarding payment and compliance. They also outline the rights and obligations of taxpayers, ensuring a balanced and fair approach to funding public... and includes an element of foreign elements too.
- Taxes are not international and there is no global tax lawTax laws form the backbone of any nation’s revenue system, setting the rules that govern how individuals and corporations contribute financially to support government functions. These laws define the types of taxes, the applicable rates, and the regulations regarding payment and compliance. They also outline the rights and obligations of taxpayers, ensuring a balanced and fair approach to funding public... that governs cross-border transactionsIntra-Group Transactions are interactions between entities within the same multinational enterprise (MNE). Such transactions form the backbone of related-party dealings and are essential in managing global operations and aligning business objectives across jurisdictions. Understanding intra-group transactions is critical in international tax and transfer pricing, as they directly impact a company's tax obligations, profitability, and compliance standing. Tax professionals, accountants, lawyers,..., neither is there an international tax court or administration body for international tax issues.
- It supports domestic tax objectives in that it:
- ensures it promotes fairness by imposing tax burdens on domestic and foreign taxpayers equally regardless of the source of the income;
- enhances domestic competitiveness; and
- a country obtains its fair share of revenue form cross-border transactionsIntra-Group Transactions are interactions between entities within the same multinational enterprise (MNE). Such transactions form the backbone of related-party dealings and are essential in managing global operations and aligning business objectives across jurisdictions. Understanding intra-group transactions is critical in international tax and transfer pricing, as they directly impact a company's tax obligations, profitability, and compliance standing. Tax professionals, accountants, lawyers,....
What are the tax conflicts with reference to double taxationDouble Taxation occurs when the same income or financial transaction is taxed twice, typically in different jurisdictions. It can arise in two primary contexts: economic double taxation, where the same income is taxed twice in the hands of different taxpayers, and juridical double taxation, where the same taxpayer is taxed on the same income in more than one country. Double...?
Even though international taxationFOR MORE INSIGHT ON INTERNATIONAL TAXATION, PLEASE READ THIS ARTICLE: Introduction to International Taxation: Key Concepts & Guidelines International Taxation encompasses the framework of laws, principles, and treaties that govern the tax obligations of individuals and entities engaged in economic activities that span multiple jurisdictions. This field addresses how income, profits, and gains are taxed when operations or investments extend... supports domestic tax objectives, each country has its own taxing rightsFiscal Sovereignty is the inherent authority of a state to independently manage its financial and economic policies, especially the power to levy and collect taxes within its jurisdiction. Central to national autonomy, fiscal sovereignty enables governments to shape economic policies that reflect their priorities, ranging from welfare programs to defence and infrastructure investment. It also underpins each country’s approach to... under domestic tax lawTax laws form the backbone of any nation’s revenue system, setting the rules that govern how individuals and corporations contribute financially to support government functions. These laws define the types of taxes, the applicable rates, and the regulations regarding payment and compliance. They also outline the rights and obligations of taxpayers, ensuring a balanced and fair approach to funding public... where a taxpayer engaging in cross-border transactionsIntra-Group Transactions are interactions between entities within the same multinational enterprise (MNE). Such transactions form the backbone of related-party dealings and are essential in managing global operations and aligning business objectives across jurisdictions. Understanding intra-group transactions is critical in international tax and transfer pricing, as they directly impact a company's tax obligations, profitability, and compliance standing. Tax professionals, accountants, lawyers,... in more than one jurisdiction, could potentially end up being taxed in their resident country as well as the country that the cross-border transactionIntra-Group Transactions are interactions between entities within the same multinational enterprise (MNE). Such transactions form the backbone of related-party dealings and are essential in managing global operations and aligning business objectives across jurisdictions. Understanding intra-group transactions is critical in international tax and transfer pricing, as they directly impact a company's tax obligations, profitability, and compliance standing. Tax professionals, accountants, lawyers,... was engaged in.
This could lead to a taxpayer being double taxed due to the conflict of taxing rightsFiscal Sovereignty is the inherent authority of a state to independently manage its financial and economic policies, especially the power to levy and collect taxes within its jurisdiction. Central to national autonomy, fiscal sovereignty enables governments to shape economic policies that reflect their priorities, ranging from welfare programs to defence and infrastructure investment. It also underpins each country’s approach to.... There are two types of double taxationDouble Taxation occurs when the same income or financial transaction is taxed twice, typically in different jurisdictions. It can arise in two primary contexts: economic double taxation, where the same income is taxed twice in the hands of different taxpayers, and juridical double taxation, where the same taxpayer is taxed on the same income in more than one country. Double...:
- Economic taxation
This is when the same economic transaction is taxed in two or more states at the same period BUT in the hands of two different taxpayers.
- Juridical taxation
Two or more states levy their taxes on the same entity or individual on the same income at identical periods.
In order to mitigate this, many countries, provide unilateral relief to avoid or minimise double taxationDouble Taxation occurs when the same income or financial transaction is taxed twice, typically in different jurisdictions. It can arise in two primary contexts: economic double taxation, where the same income is taxed twice in the hands of different taxpayers, and juridical double taxation, where the same taxpayer is taxed on the same income in more than one country. Double... under their domestic laws. Such relief is often times seen via a tax exemption or a tax credit. As per the lecture Professor Erasmus makes mention of USA and Zimbabwe as countries for the various scenarios by explaining that a DTAA Double Taxation Agreement (DTA), also known as a Double Taxation Treaty (or a Tax Treaty), is an international tax treaty between two or more countries that aims to prevent individuals or businesses from being taxed twice on the same income. With globalisation and the increase in cross-border economic activities, DTAs have become essential tools for promoting trade, investment, and... can eliminate the double taxationDouble Taxation occurs when the same income or financial transaction is taxed twice, typically in different jurisdictions. It can arise in two primary contexts: economic double taxation, where the same income is taxed twice in the hands of different taxpayers, and juridical double taxation, where the same taxpayer is taxed on the same income in more than one country. Double... or in some instances there is no tax payable at all.
Double Tax Treaties is a key element of International TaxationFOR MORE INSIGHT ON INTERNATIONAL TAXATION, PLEASE READ THIS ARTICLE: Introduction to International Taxation: Key Concepts & Guidelines International Taxation encompasses the framework of laws, principles, and treaties that govern the tax obligations of individuals and entities engaged in economic activities that span multiple jurisdictions. This field addresses how income, profits, and gains are taxed when operations or investments extend...
Generally, DTAs avoid and reduce the burden of juridical taxation in two or more states. This is done by conferring the rights and imposes the obligation on the Contracting States. This is to limit the taxes that can be levied by the Contracting States under domestic law. The taxing rightsFiscal Sovereignty is the inherent authority of a state to independently manage its financial and economic policies, especially the power to levy and collect taxes within its jurisdiction. Central to national autonomy, fiscal sovereignty enables governments to shape economic policies that reflect their priorities, ranging from welfare programs to defence and infrastructure investment. It also underpins each country’s approach to... are allocated under this contractual agreement and then requires the residence Contracting State to grants double tax relief if it arises.
Various of other aspects are present in a DTAA Double Taxation Agreement (DTA), also known as a Double Taxation Treaty (or a Tax Treaty), is an international tax treaty between two or more countries that aims to prevent individuals or businesses from being taxed twice on the same income. With globalisation and the increase in cross-border economic activities, DTAs have become essential tools for promoting trade, investment, and... such at the competent authority to resolve international tax differences, Mutual Agreement Procedures how to go about to resolve a dispute and lastly there is the exchange of information between tax authorities as well.
Can Tax treaties override domestic tax system?
Generally, the answer is no, however this depends heavily on how treaties are integrated into domestic tax lawTax laws form the backbone of any nation’s revenue system, setting the rules that govern how individuals and corporations contribute financially to support government functions. These laws define the types of taxes, the applicable rates, and the regulations regarding payment and compliance. They also outline the rights and obligations of taxpayers, ensuring a balanced and fair approach to funding public.... There are three ways the legal effect can impact a country’s domestic namely:
- Automatic integration;
- Formal incorporation; and
- The substantive approach.
There is an IOFC checklist for when companies perform their tax planningTax planning is the process of organising and structuring one’s financial affairs in a manner that legally minimises tax liabilities while ensuring compliance with relevant tax laws. The primary objective of tax planning is to reduce the amount of taxes paid, optimise the use of available tax benefits, and preserve wealth. It can be applied at various levels, including personal... and structuring
The OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... defines what a tax haven is, these are jurisdictions that usually impose low to now taxes and perceived to be used by non-residents to escape taxes in their country of residence.
Anti-avoidance measuresAnti-abuse provisions are legislative measures implemented by tax authorities to prevent taxpayers from exploiting legal loopholes or engaging in artificial arrangements solely to reduce their tax liabilities. These provisions are essential tools for revenue authorities to maintain fairness in the tax system, ensuring that the intent of tax laws is respected and that tax bases are protected against erosion due...
The observation arises that taxpayers make improper use of tax treaties by interpreting in a narrow technical way the treaty, to obtain the benefits.
Improper use of treaties is a concern.
There are specific approaches to prevent the improper use of tax treaties by introducing anti-avoidance rules in their domestic legislation and various doctrines etc.
Responses