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…

India recently notified a Protocol that amends the India-China tax treaty and incorporates some of the OECD recommendations put forth as part of its BEPS project. The changes would apply from the 2020 financial year. The Protocol brings about serious changes to the tax treaty in several areas, including limiting treaty abuse, tackling artificial avoidance…

Two of my recent articles have examined the Australian decision in Commissioner of Taxation v Resource Capital Fund IV LP [2019] FCAFC 51. The articles examine the central question on the source of income earned and the tax classification and entitlement to treaty benefits of investment funds. Real property gains This time I consider two…

Commissioner of Taxation v Resource Capital Fund IV LP [2019] FCAFC 51 addressed a number of fundamental international tax issues. The case concerned a gain from the sale of shares in an Australian incorporated public company listed on the Toronto Stock Exchange by two Cayman Island limited partnerships whose partners included residents of the United…

Mutual agreement procedure (MAP) pursuant to article 25 of the OECD and UN Model treaties imposes obligations on tax administrations. Inadequacies in the performance of these obligations has been the subject of much work by the OECD in the course of the 21st Century. BEPS Action 14 OECD Action 14 – 2015 Final Report, Making…

Corresponding adjustments and the MAP process When the price charged for goods or services sold between related parties is not in accordance with the arm’s length principle, Article 9(1) of the OECD Model authorizes the tax authorities of a State to make primary adjustments to the transfer price. This may trigger economic double taxation as…

The High Court of Kenya gave judgement on 15 March 2019 on a challenge to the validity of the Kenyan-Mauritius double tax treaty in Tax Justice Network- Africa v Kenya Revenue Authority and others.  The petitioners had sought a declaration that the treaty had not been subjected to the ratification of domestic law and the…

Jonathan Schwarz has already briefly discussed the CJEU’s judgment in the “Danish Beneficial Ownership Cases” (C-115/16, C-118/16, C-119/16, C-299/16 and C-116/16 and C-117/16), noting that the cases “represent a landmark on beneficial ownership” and comparing them to recent international tax law jurisprudence, concluding that the “voyage of discovery is certainly not at and end”. In…

The judgements of the CJEU in N Luxembourg 1 v Skatteministeriet (Case C-115/16) and joined cases and in T Danmark (Case C-116/16)  and another joined case, on 26 February 2019, once again addressed numerous controversies over meaning of the term “beneficial ownership”. The court’s concern in N Luxembourg was qualification for relief from withholding tax…

It is common to face resistance in MAP application, which is essentially based on misconception of Double Taxation Conventions (DTCs). As Article 9(1) establishes the arm’s length standard, which presents a range of possible prices, that misunderstanding may imply more economic double taxation. Given the Brazilian position on recent transfer pricing changes, these problems become…

The Tax Court of Canada decision in Alta Energy Luxembourg S.A.R.L. v. The Queen, 2018 TCC 152 (CanLII) on August 22, 2018 may provide useful pointers to the meaning and application of the PPT found in Article 7(1) of the MLI and Article 29(9). A Luxembourg resident company claimed exemption from Canadian income tax under…

Can an Indian subsidiary be said to be the permanent establishment of its overseas parent on the ground that it is a virtual projection of the latter even if the tests explicitly stipulated in the permanent establishment Article of a tax treaty are not met? This was one of the main questions that recently came…

On July 13, 2018, India’s Central Board of Direct Taxes (CBDT) issued for stakeholders’ comments a consultation document on framing of tax rules in respect of the concept of “significant economic presence” – a recent addition to the Indian Income Tax jurisprudence. Readers will recollect that India’s 2018 Budget proposed to amend the definition of…

For many years, I have been advocating a drastic change in the distribution approach for taxing rights in international taxation. The focus of my criticism has been Article 7 of the OECD and UN Model Conventions.  My core argument continues to be that the so-called “permanent establishment principle” disregards the role of the infrastructure that…