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…

For a number of years, endeavors to reform the Swiss federal withholding tax system with regard to the taxation of interest from collective debt instruments have been going on. The reform is generally aimed at strengthening the Swiss debt capital market. The latest proposals would completely do away with federal withholding tax on bond interest….

Mukesh Butani, Seema Kejriwal & Ajitesh Dayal Singh Introduction The Supreme Court of India recently settled a two-decade old dispute pertaining to taxability of software income. The Supreme Court ruled that payments to non-resident software vendors/licensors cannot be treated as payment towards royalty, and hence no withholding tax liability can be imposed on the resident…

Introduction Let’s assume the following situation: ParCo is the parent company of a multinational group with its residence in Switzerland and engaged in the automotive business. It developed an innovative battery technology. Due to the high density of competition and rivalry, ParCo is interested in having its innovative technology protected through a patent. For this…

With a judgment rendered on 27 November 2020 (case no. 2C_835/2017), the Swiss Federal Supreme Court (“FSC”) confirmed a decision by the Federal Administrative Court (“FAC”) of 24 August 2017 (decision no. A-1462/2016) concerning an individual tax residence matter that arose in the context of certain dividend withholding tax (WHT) refund requests, which had been…

We commend the OECD’s 15-year effort since its 2005 publication of E-commerce: Transfer Pricing and Business Profits Taxation to address the challenges arising from the digitalization of multinational enterprises’ business models and the evolution of cross-border ecommerce. Our comments and recommendations are submitted in an academic capacity and do not represent an official statement or…

On 10 July 2020, the Italian Supreme Court (also ‘Court’) issued its decision No. 14756 (‘Decision 14756/2020’, published in H&I 2020/470 with comments by Arginelli and Tenore) dealing, amongst others, with the interpretation of the beneficial owner requirement under the Interest and  Royalty Directive (Directive 2003/49/EC; ‘IRD’) and the abuse of the IRD. The case…

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…

Recently, national courts of several EU member States (notably France[1], Italy[2], the Netherlands[3] and Spain[4]) referred to the landmark judgments of the Court of Justice of the European Union (“CJEU”) in the so-called “Danish cases”.[5] On 20 April 2020, the Swiss Supreme Court gave its own interpretation of these judgments[6] in an outbound dividend case…

In its judgment of January 21, 2020 (Santander case, available here), the European Court of Justice (ECJ) not only prevented the Spanish Central Tax Tribunal (Tribunal Económico-Administrativo Central – TEAC) from requesting a preliminary ruling due to its lack of juridical independence (para. 77), but it also recalled its obligation to ensure that EU law…

With a judgment rendered on 16 December 2019 (case no. 2C_209/2017), the Swiss Federal Supreme Court (“FSC”) rejected several reclaims of Swiss dividend withholding taxes made by a Luxembourg resident financial institution (“Lux Bank”) and thereby denied the claimant the benefits of the double taxation treaty between Switzerland and Luxembourg on income and capital taxes…

Since 2013 the OECD has worked on forging a grand coalition (now 136 countries) it calls the “Inclusive Framework” around adopting the outcomes of the OECD’s Base Erosion and Profit Shifting (BEPS) project of 15 reports.  In 2005, ten years before the BEPS reports, the OECD published E-commerce: Transfer Pricing and Business Profits Taxation to…

Tax Administration Announces New Control Project The Finnish Tax Administration has announced that it will be tackling arrangements to avoid withholding tax on dividends. According to the Tax Administration, nominee-registered shares are subject to withholding tax avoidance also in Finland. The new control project investigates the extent of the phenomenon and plans to implement comprehensive…