Last month my blog discussed the questions relating to corporate residence and article 4(1) of the UK-US Double Tax Treaty raised in G E Financial Investments v HMRC  [2021] UKFTT 210 (TC). This month the focus is on the permanent establishment issues. The case concerned a complex financing structure General Electric Company group. The taxpayer,…

When is a taxpayer a resident of a contracting state for purposes of a tax treaty? The decades old definition in article 4(1) of the OECD Model that ‘“resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place…

The relationship between treaties and domestic tax law ought to be straightforward. The pacta servanda sunt principle expressed in articles 26 and 27 of the Vienna Convention on the Law of Treaties itself implies that treaty obligations must be upheld notwithstanding domestic law. A variety of constitutional arrangements around the world mean that there is…

There’s something about OECD’s Pillar One. For some years now, the world has been under the spell of a new system of taxation of companies that make profits in countries without taking root there in any way. They often operate via internet platforms, which means that the profits that are generated elsewhere cannot be taxed…

The newly concluded Trade and Cooperation Agreement between the EU and UK has limited provisions concerning taxation, but interesting provisions relevant to interpretation of treaties including good faith. The Agreement does not seek to replicate many of the rights which UK citizens and businesses had under EU law. There is no general non-discrimination provision. Double…

Those with a long memory for cricketing events may remember the 1996 World Cup hosted jointly by India, Pakistan and Sri Lanka. The winner, Sri Lanka, made 398 runs for 5 wickets, in a one-day international match, a record that stood until April 2006. South Africa’s Gary Kirsten scored 188 runs, not out, against the…

A couple of days ago, in the last weekly session of the Indiana-Leeds Summer Tax Workshop, I attended the presentation of a fascinating paper by Steven A. Dean (A Constitutional Moment in Cross-Border Taxation)(1) where the author analyzes the political and economic predominant influence of central economies in the design and shape of post-WWI in…

Following the Supreme Court decision in Fowler v HMRC [2020] UKSC 22, the UK First-tier Tribunal has considered another case where classification of a source of income for tax treaty purposes was in issue. This time the question was classification as business profit or income from immovable property in the Canada-UK double tax treaty. In…

International double taxation should be to European VAT harmonization what tropical temperatures should be to the polar regions: a challenge of the natural laws of the universe and, at the same time, a wound inflicted to a fragile ecosystem. And yet, last June, both phenomena were officially recognized by international independent bodies: temperatures of 38…

In last month’s blog I promised to address the treaty aspects of  Davies and Others v HMRC [2020] UKUT 67 (TCC). The case concerned UK resident individuals who each took out a life insurance policy with a Bermuda insurer under which their entitlements were linked to a Mauritian company that developed land in the UK….

Measures to prevent the spread of coronavirus have impacted on every aspect of life. While the degree of enforced isolation and immobility varies from country to country, the basic elements remain the same: Most people are compelled to stay at home and to work from there if possible. The speed with which the pandemic has…

The Canadian Federal Court of Appeal has upheld the Tax Court of Canada decision in Canada v. Alta Energy Luxembourg S.A.R.L., 2020 FCA 43 (CanLII).   The case is of some significance because the Canadian Revenue Agency (“CRA”) sought to apply the Canadian domestic general anti-avoidance rule (GAAR) in order to deny treaty relief. The…

Two cases, currently before different courts highlight long-standing questions around the attribution of profits to permanent establishments. Irish and United Kingdom law on the attribution of profits to branches of non-resident companies remined identical for decades until 2003. In each country, a non-resident company trading through a branch in that country was chargeable to corporation…

Equality is one of the core values of modern democratic societies. It is no accident that equality featured in opening preamble to the United States Declaration of Independence in 1776 and the first article of both the French Declaration of the Rights of Man in 1789 and the United Nations Universal Declaration of Human Rights…