Taxation of Business Profits in the 21st Century.

Format:

Book

Author/Creator:

Gutiérrez, Carlos.

Contributor:

Perdelwitz, Andreas.

Series:

IBFD Tax Research Series

Language:

English

Subjects (All):

Double taxation--Treaties.

Double taxation.

International business enterprises--Taxation.

International business enterprises.

Physical Description:

1 online resource (322 pages)

Edition:

1st ed.

Place of Publication:

Amsterdam : IBFD Publications USA, Incorporated, 2013.

Summary:

This book explores the taxation of business profits in the 21st century, focusing on selected issues under tax treaties. It commemorates the 75th anniversary of the International Bureau of Fiscal Documentation (IBFD), a renowned institute for international tax research and information dissemination. The book is a compilation of essays by IBFD's tax research staff, analyzing controversial tax issues across 12 chapters. It provides an in-depth examination of topics such as the concept of permanent establishment, highlighting the challenges faced by organizations like the OECD and the United Nations in balancing global tax benchmarks with national interests. Intended for tax professionals, academics, and policymakers, the book offers insightful perspectives on international tax law's complexities and evolving dynamics. Generated by AI.

Contents:

Intro

Title Page

Copyright Page

Foreword

Preface

General Acknowledgements

Introduction

Table of Contents

Part One: Issues Relating to Article 5

Chapter 1: At the Disposal of - The Way towards a Broader Concept

1.1. Introduction

1.2. An ambiguous concept

1.3. Unsettled issues surrounding the "at the disposal of " concept

1.4. Case law: Stories from more than three decades

1.5. Analysis of examples in the Commentary on the OECD Model (2010)

1.6. Concluding remarks

Chapter 2: A Certain Degree of Permanence - Between Temporary and Everlasting Business Activities

2.1. Introduction

2.2. Historical development

2.3. A certain degree of permanence

2.4. Insights from case law

2.4.1. PGS Geophysical AS v. Government of Norway

2.4.2. Fugro Engineers BV v. Assistant Commissioner of Income Tax

2.5. Recurrent activities

2.6. One-off projects

2.7. Subcontractor permanent establishment

2.8. Concluding remarks

Chapter 3: In the Name of Clarity: Defining a Dependent Agent Permanent Establishment

3.1. The crux of the matter

3.2. The agent under article 5(5)

3.2.1. Background

3.2.2. Parenthesis: A brief excursion into the law of agency

3.2.2.1. Agency under civil law systems

3.2.2.2. Agency under common law systems

3.2.2.3. A brief comparison of both systems

3.3. "In the name of" the enterprise

3.3.1. A literal interpretation?

3.3.2. Effects of a strictly literal interpretation

3.3.3. The intervention of the Commentary

3.4. Article 5(5) and commissionaire arrangements

3.4.1. The ties that "bind": Zimmer and Dell

3.4.2. Spain goes its own way

3.4.3. The wheel comes full circle? The Boston Scientific case

3.5. Concluding remarks

Chapter 4: Withholding Taxes on Services Income - A 21st Century Outlaw or a Necessary Evil?.

4.1. Introduction

4.2. Withholding taxes on services income

4.2.1. Withholding taxes on services income under domestic law

4.2.2. Source or nexus of services income under domestic law

4.2.3. Withholding taxes on services income under tax treaties

4.2.4. Impact of tax treaties on withholding taxes on services income

4.3. Withholding tax implications of payments under cost contribution arrangements

4.3.1. Are payments under CCAs for the supply of know-how?

4.3.2. Are payments under CCAs for the provision of services?

4.3.3. Are payments under CCAs for an outright sale?

4.3.4. Source or nexus of payments under CCAs

4.4. Concluding remarks

Appendix A - Source State Withholding Taxes on Services Income of Non-Residents

Chapter 5: Controversies Involving the Taxation of Cross-Border Telecommunication Income: Is There a Need for New Rules?

5.1. Introduction

5.2. Overview of telecommunication services

5.2.1. Transmissions made through satellites

5.2.2. Transmissions made through cables

5.2.3. Transmissions made through roaming

5.2.4. Transmissions made through cloud computing and web hosting

5.2.5. Transmissions made through radio spectrum

5.3. Application of the permanent establishment concept to telecommunication transactions

5.3.1. Are the activities performed in any jurisdiction?

5.3.2. Is there a fixed place of the foreign operator?

5.3.3. Is the fixed place at the disposal of the foreign operator?

5.3.4. Are core activities performed through the fixed place of business?

5.4. How does the definition of royalties fit with telecommunication transactions?

5.4.1. Are the payments made for the use of, or right to use property or information or a secret process?

5.4.2. Are the payments made for a transfer of "know-how"?.

5.4.3. Are the payments made for the leasing of industrial, commercial or scientific equipment?

5.5. Possible solutions to tax these transactions

5.5.1. Is the tax levied on basic telecommunication charges a solution?

5.5.2. Is a global formulary apportionment a solution?

5.5.3. Is a withholding tax on deductible expenses a solution?

5.5.4. Is a "virtual permanent establishment" a solution?

5.6. Concluding remarks

Part Two Issues Relating to Article 7

Chapter 6: The Authorized OECD Approach: An Overview

6.1. Introduction

6.2. The separate and independent enterprise approach and the authorized OECD approach

6.2.1. Origins of the separate and independent enterprise approach

6.2.2. The "relevant business activity" approach and the "separate entity approach"

6.2.3. Chronology of the work of the OECD Working Parties

6.3. Overview of the authorized OECD approach: From restricted independence to total independence of the permanent establishment

6.3.1. The 2008 OECD Model update: the amendment to the Commentary on Article 7

6.3.2. The 2010 OECD Model update: the new article 7 and its Commentary

6.4. The authorized OECD approach: Two steps

6.4.1. First step: The functional separate entity approach

6.4.2. Second step: Remuneration of the dealings

6.5. The authorized OECD approach: Controversial issues

6.5.1. Application of the arm's length principle and OECD Guidelines to the attribution of profits to permanent establishments

6.5.2. Domestic legislation limitations for the application of the authorized OECD approach

6.5.3. Lack of consensus in key aspects of the authorized OECD approach

6.5.4. Implementation issues for taxpayers

6.5.5. Dependent agent PE

6.5.6. Non-discrimination

6.5.7. Legal certainty

6.5.8. EU law

6.6. Concluding remarks.

Chapter 7: Capital Structure and Financing of Permanent Establishments

7.1. Preliminary notes

7.2. Historical evolution

7.2.1. Genesis: The League of Nations era

7.2.2. OECD era

7.2.2.1. A new beginning: 1963, 1977 and 1992 OECD Models

7.2.2.2. OECD report on international banking enterprises: 1984

7.2.2.3. The expansion period: OECD report on attribution of income to PEs of 1994 and OECD Models of 1996-2005

7.2.2.4. Discussion draft on attribution of profits to permanent establishments: 2001

7.2.2.5. Draft Reports 2004-2006

7.2.2.6. Contemporary period: 2008 and 2010 OECD Models

7.3. Financing permanent establishment activities

7.3.1. Debt vs. equity

7.3.2. Funding of a permanent establishment

7.3.3. Authorized OECD approach

7.3.4. Determination of permanent establishment funding

7.3.5. Free capital: preliminary remarks

7.3.5.1. Capital allocation approach

7.3.5.2. Thin capitalization approach

7.3.5.3. Economic allocation approach

7.3.5.4. Safe harbour approach: quasi-thin capitalization approach

7.3.5.5. Common issues related to the allocation of free capital

7.4. Adjusting interest expenses

7.5. Concluding remarks

Chapter 8: Permanent Establishments and Intangibles: When Did Notional Royalties Become a Reality?

8.1. Setting the scene: The importance of intangible assets in the current economic environment

8.2. Historical development of the treatment of intangible assets for purposes of attributing profits to permanent establishments

8.2.1. Work undertaken by the League of Nations

8.2.2. Early versions of the OECD Model

8.2.3. The 1994 twist

8.3. Current state of affairs: The treatment of intangible assets under the authorized OECD approach

8.3.1. Early stages: the 2001 discussion draft on the attribution of profits to permanent establishments.

8.3.2. Shaping the authorized OECD approach

8.4. The future implementation of the 2010 report on the attribution of profits to permanent establishments

Chapter 9: How Fiction Becomes Reality: Equal Treatment for Permanent Establishments and Resident Enterprises

9.1. Introduction

9.2. Preliminary remarks

9.3. Two approaches towards the equal treatment of permanent establishments and resident enterprises

9.3.1. First approach: source taxation right for notional payments

9.3.2. Second approach: exclusive source taxation rights over the profits attributable to a PE and shared taxation rights for its profit remittances

9.4. The consequences of implementing either of the two proposals

9.4.1. Economic double taxation vs. taxation of retained profits

9.4.2. Deferred taxation

9.4.3. Determination of profits attributable to a PE

9.5. Concluding remarks

Chapter 10: The Applicability of the AOA to Existing Tax Treaties - A Matter of Interpretation?

10.1. Background

10.2. Scope of this chapter

10.3. Role of the OECD Commentary in the interpretation and application of tax treaties

10.3.1. Legal character of the OECD Commentary

10.3.2. Vienna Convention

10.4. Effects of changes to the OECD Commentary

10.4.1. Ambulatory or static interpretation?

10.4.2. Where subsequent amendments are disregarded: The NatWest case

10.4.3. Is there support for the ambulatory use of the Commentary?

10.4.3.1. Position of OECD on the dynamics of the Commentary

10.4.3.2. Fitting the Commentary into the framework of the Vienna Convention

10.4.3.3. The degree of the change

10.5. Effect of 2008 Commentary on existing tax treaties

10.5.1. Treaties concluded after the 2008 amendments to the Commentary

10.5.2. Treaties concluded before the 2008 amendments to the Commentary.

10.6. Events of 2010 and their effects on existing treaties.

Notes:

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ISBN:

9789087221904

9087221908

OCLC:

1374428290