Treaty shopping

Abuse of law, Anti-tax avoidance, Beneficial ownership, BEPS, Direct taxation, Financial transactions, Fund management, Ireland, MLI, OECD, Principal purpose test, Tax haven, Tax Treaties, Treaty shopping, United Kingdom, Withholding Taxes

(Temple Tax Chambers; King’s College London)/ /Leave a comment
article 3(2), burden of proof, OECD Commetary, treaty interpretation, UN Commentary

Even before introduction of the BEPS PPT, the UK has had purpose-based provisions in various forms, designed to limit access to treaty benefits in its double tax treaties since the 1960’s. Its standard formulation first appeared in 1992.  Surprisingly, the first case in which the meaning and application of this wording in a tax treaty…

Double Taxation, Financial institutions, Hybrids, International Tax Law, Limitation on benefits, Principal purpose test, Tax Administration, Tax Credits, Tax Planning, Tax Policy, Tax Treaties, Treaty shopping, United Kingdom, United States, Withholding Taxes

(Temple Tax Chambers; King’s College London)/ /Leave a comment

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…

Abuse of law, Anti-tax avoidance, Double non-taxation, Double Taxation, International Tax Law, Mauritius, MLI, Netherlands, OECD, Principal purpose test, Tax Avoidance, Tax Planning, Tax Treaties, Treaty shopping, United Kingdom

(Temple Tax Chambers; King’s College London)/ /Leave a comment

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….

Abuse of law, Anti-tax avoidance, BEPS, Double non-taxation, Double Taxation, International Tax Law, MLI, OECD, Principal purpose test, Residence, Substance, Tax Avoidance, Tax Planning, Tax Treaties, Treaty shopping, Uncategorized, United Nations

(Temple Tax Chambers; King’s College London)/ /1 Comment

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…

BEPS, Double Taxation, Hybrids, International Tax Law, MLI, OECD, Residence, Tax Treaties, Treaty shopping, United States

(Temple Tax Chambers; King’s College London)/ /Leave a comment

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…

BEPS, India, Limitation on benefits, Mauritius, Principal purpose test, Treaty shopping

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BEPS Action Plan 6 observes that corporations are misusing Double Taxation Avoidance Agreement (DTAA) provisions by indulging in treaty shopping. A typical example of treaty abuse that BEPS Action Plan 6 seeks to counter is that of an American corporation entering the Indian market through Mauritius because of the favourable India-Mauritius DTAA. An intermediary mailbox…