BEPS, Digitalization, Permanent Establishments, Value Creation

(Tax Policy Center of the University of Lausanne, Switzerland) and (Tax Policy Division, Ministry of Finance, India)/ /Leave a comment

The Existing Framework: Nexus and Profit Attribution Rules Under the current Double Taxation Avoidance Agreement (DTAA) framework, business profits are in principle taxable in the State of residence of the enterprise. However, the source (market) jurisdictions may tax the profits if a permanent establishment (PE) is triggered therein. A PE arises when the non-resident operates…

EC Tax Review

(General Editor EC Tax Review and tax adviser at Ernst & Young Belastingadviseurs LLP)/ /Leave a comment

We are happy to inform you that the latest issue of the journal is now available and includes the following contributions:   Marie Lamensch, Adoption of the E-Commerce VAT Package: The Road Ahead Is Still a Rocky One The e-commerce VAT package that was adopted in December 2017 is a key element of the European…

Beneficial ownership, Tax Avoidance, Tax Treaties, Withholding Taxes

(Partner Cuatrecasas Madrid) and (Tax Associate Cuatrecasas)/ /1 Comment

Being familiar with the Spanish tax environment, readers will know that Spain does not withhold taxes on interest paid to EU residents. This domestic exemption has been in force for several decades, long before the EU Interest and Royalties Directive. The domestic exemption has the beauty of simplicity: it applies to all EU-resident lenders, without…

BEPS, International Tax Law, OECD, Tax Avoidance, Tax Policy, Tax Treaties, Uncategorized

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

I am delighted to see that my post on value creation has stimulated discussion on the fundamental thinking about international taxation. See the posts of my friends and colleagues Werner Haslehner and Sergio André Rocha. At the IFA seminar in Rotterdam, we puzzled over the meaning of “value creation”. Werner also referred to another mystifying…

BEPS, Digitalization, International Tax Law

(Brazilian Institute for Tax Law (IBDT))/ /Leave a comment

The well-known expression “butterfly effect” comes from chaos theory, and it refers to the idea that a butterfly could flap its wings in Brazil and, through ripple effect, set off a tornado in Texas. Bringing this expression into the tax world, a decision by a domestic court on a seemingly domestic tax matter could trigger…

BEPS, Digitalization, Double Taxation, EU/EEA, Value Creation

(Rio de Janeiro State University, Sergio André Rocha Advocacia & Consultoria Tributária)/ /Leave a comment

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…

Intertax

(General Editor of Intertax)/ /Leave a comment

Intertax dedicates this special issue to digital taxation, aiming to contribute to the ongoing debate on the topic. The reader will find herein the entire range of existing positions, discussed comprehensively. The OECD Interim Report 2018 and the EU proposals on digital taxation are already taken into account in some of these articles. After the…

EC Tax Review

(General Editor EC Tax Review and tax adviser at Ernst & Young Belastingadviseurs LLP)/ /Leave a comment

We are happy to inform you that the latest issue of the journal is now available and includes the following contributions:   Nathalie Wittock, Sales Promotion Techniques and VAT Sales promotion is often a key component within a company’s promotional campaign. Sales promotion consists of the use of a number of sales promotion techniques (SPTs)….

Alienation of Shares, EU/EEA, International Tax Law, Real Estate, REIT, Tax Treaties

(Partner Cuatrecasas Madrid) and (Tax Associate Cuatrecasas)/ /1 Comment

Article 13.1 of the double tax treaty (DTT) signed between Luxembourg and Spain authorizes Spain to tax gains from the alienation of shares in a company whose assets consist principally of immovable property in Spain, with no exceptions for properties engaged in economic activities. Let us look at a scenario where a Luxembourg company makes…

BEPS, Digitalization, OECD, Transfer Pricing, Value Creation

(Luxembourg University)/ /Leave a comment

Following up on Jonathan Schwarz’s latest blog contributing to the debate on taxation and value creation, I wanted to attempt adding some further critical points. The OECD’s stated goal of the second pillar (“Substance”) of its BEPS action plan is to align taxation with value creation. It has already been observed that this is a…

Intertax

(General Editor of Intertax)/ /Leave a comment

The May issue of Intertax is already available online here. The online reader can now identify the different sections, which include, besides the articles, an editorial, debate, country and case-law notes, as well as literature review. Articles published in the May issue evaluate exchange of information as an international standard, how to ensure ethical behavior…

BEPS, Double Taxation, OECD, Permanent Establishments, Tax Treaties

(Tax Lawyer)/ /1 Comment

The importance of the permanent establishment (PE) principle in tax treaties cannot be undermined. Whether or not a source country has the right to tax business profits of a foreign company would depend wholly on the existence or non-existence of a PE of that company in the source country. Work undertaken by the OECD in…

BEPS, MLI, OECD

( PwC Netherlands, Lazarski University and Singapore Management University)/ /Leave a comment

Introduction This is the second part of the input dealing with the MLI’s LOB rule. It focuses on the second and the third subtests under the MLI’s LOB rule, i.e. the concept of income emanating from or being incidental to the taxpayer’s active conduct of business in a State of residence and a State of…