Arbitration and tax treaty disputes

2019 ◽  
Vol 35 (4) ◽  
pp. 473-504
Author(s):  
Michelle Andrea Markham
Keyword(s):  
Dispute Resolution ◽  
Action Plan ◽  
Final Report ◽  
Profit Shifting ◽  
The Past ◽  
The World ◽  
Arbitration Procedure ◽  
International Tax ◽  
Dispute Resolution Mechanism ◽  
Mutual Agreement

Abstract The Organisation for Economic Cooperation and Development’s Base Erosion and Profit Shifting Action Plan and its implementation around the world over the last few years has brought about widespread and fundamental changes to the international tax framework. A corollary of these changes has been an increase in international tax treaty disputes, as newly-designed rules are challenged by both taxpayers and tax administrations. This article seeks to examine how such controversies have been addressed in the past, and to evaluate whether in this new environment arbitration may provide the key to successful tax treaty dispute resolution, despite concerns regarding national sovereignty. It considers the changes effected to the traditional tax treaty dispute resolution mechanism under the Mutual Agreement Procedure by the Action 14 Final Report on Making Dispute Resolution Mechanisms More Effective. Furthermore, it evaluates the use of arbitration under the Multilateral Instrument, as well as the application of certain reservations and options available in this regard. It explores some of the benefits of instituting an arbitration procedure that will ensure resolution for all international stakeholders. Finally, it considers the potential for Advance Pricing Agreements to proactively resolve tax treaty disputes, and the need for taxpayers to take a strategic and informed view of controversy management in the international tax sphere.

Tax treaty arbitration

2018 ◽  
Vol 35 (2) ◽  
pp. 195-219
Author(s):  
Hans Mooij
Keyword(s):  
Dispute Resolution ◽  
Tax Avoidance ◽  
Third Parties ◽  
Profit Shifting ◽  
Eu Directive ◽  
International Tax ◽  
Treaty Networks ◽  
Multilateral Treaty ◽  
Mutual Agreement

Abstract Traditionally, tax authorities endeavour to resolve their tax treaty disputes among themselves, by amicable settlement through a mutual agreement procedure (commonly known as ‘MAP’ procedure), without involvement from any third parties—neither arbitrators nor mediators. In past years, due to globalization of countries’ economies and spread of tax treaty networks, the number of disputess, their complexity and revenue interest involved have gone up drastically, exceeding many authorities’ capacities, and resulting in MAP cases taking up increasingly more time, or remaining unresolved at all. It is generally expected that the recent OECD/G20 initiated ‘BEPS’ (short for: Base Erosion and Profit Shifting) measures against international tax avoidance will add further to this. Arbitration so far having been hardly tried in practice, the recent arbitration piece under the BEPS multilateral treaty (MLI) and EU Directive on dispute resolution in international tax matters, however, create new momentum. It is now up to tax authorities if they can accustom themselves to the use of arbitration as an ordinary, and in certain circumstances preferable tool for resolving their disputes.

scholarly journals Resolution of Dual Residence Instances in the Case of Companies

2020 ◽  
pp. 111-129
Author(s):  
Lidija Živković
Keyword(s):  
Historical Development ◽  
Action Plan ◽  
Special Focus ◽  
Effective Management ◽  
Profit Shifting ◽  
Double Taxation ◽  
Tax System ◽  
New Approach ◽  
International Tax ◽  
Mutual Agreement

The application of double taxation treaties presupposes that the potential cases of dual residence have been previously resolved. For this purpose, the major model-conventions on the basis of which double taxation treaties around the globe are negotiated contain the so-called tie-breaker rule. In the wake of the recent revision of the international tax system resulting from the OECD’s Base Erosion and Profit Shifting Action Plan, the existing tie-breaker rule for companies has been thoroughly amended. Instead of determining companies’ residence based on the place of the effective management criterion, the new approach stipulates that such cases will be decided through the application of the Mutual Agreement Procedure, between the competent authorities of the relevant contracting states. After outlining the historical development of the said mechanism in the context of dual residence resolution, this article purports to critically assess its desirability, with a special focus on its implementation in Serbia.

scholarly journals International Legal and Economic Aspects of Dispute Resolution within the WTO in the Context of International Integration

2021 ◽  
Vol 14 (2) ◽  
pp. 64-71
Author(s):  
V. P. Kirilenko ◽  
Yu. V. Mishalchenko ◽  
A. N. Shchepova
Keyword(s):  
Dispute Resolution ◽  
Dispute Settlement ◽  
The European Union ◽  
Advantages And Disadvantages ◽  
Legal Remedies ◽  
The World ◽  
System Functioning ◽  
Dispute Settlement System ◽  
Dispute Resolution Mechanism ◽  
Settlement Of Disputes

The article discusses issues related to the settlement of disputes within the framework of the World Trade Organization, as well as assesses the advantages and disadvantages of this system. The specific problems of the dispute settlement system functioning today are considered, and options for optimizing the dispute resolution mechanism and various ways to improve the effectiveness of legal remedies in cases of non-compliance with decisions are proposed. Special attention is paid to the latest topical disputes involving the Russian Federation, the European Union, Ukraine, China and USA resolved within the framework of the World Tr ade Organization, as well as to the crisis faced by the organization due to the absence of a permanent appeals body.

scholarly journals Harmonization of Arbitration Laws in some Asian and European Countries

Pro Futuro ◽  
2021 ◽  
Vol 10 (4) ◽  
Author(s):  
Gauri Nirwal
Keyword(s):  
Public Policy ◽  
International Trade ◽  
Dispute Resolution ◽  
European Countries ◽  
International Arbitration ◽  
The Public ◽  
The World ◽  
Recognition And Enforcement ◽  
Dispute Resolution Mechanism ◽  
The Relationship

The present paper studies the relationship between domestic and international arbitration laws and the harmonization factor amongst some Asian and European jurisdictions. During the last decades, there has been a significant change and globalization in the world and with the expansion of businesses and trade a better dispute resolution mechanism is required in order to maintain the harmony in international trade. It has become a necessity to balance the domestic arbitration laws with the international ones. This brief paper identifies and comments on some of the areas where differences remain including differences in recognition and enforcement of arbitral awards in various jurisdictions over the public policy defence, and where further examination and research to reach and solve disputes amicably might be useful.

scholarly journals Texas Advance Directives Act: Nearly a Model Dispute Resolution Mechanism for Intractable Medical Futility Conflicts

2016 ◽  
Vol 16 (1) ◽  
pp. 22 ◽  
Author(s):  
Thaddeus Mason Pope
Keyword(s):  
Dispute Resolution ◽  
Advance Directives ◽  
Due Process ◽  
Medical Futility ◽  
The United States ◽  
Life And Death ◽  
Procedural Due Process ◽  
The World ◽  
Dispute Resolution Mechanism ◽  
Texas Advance Directives Act

<em>Increasingly, clinicians and commentators have been calling for the establishment of special adjudicatory dispute resolution mechanisms to resolve intractable medical futility disputes. As a leading model to follow, policymakers both around the United States and around the world have been looking to the conflict resolution provisions in the 1999 Texas Advance Directives Act (‘TADA’). In this article, I provide a complete and thorough review of the purpose, history, and operation of TADA. I conclude that TADA is a commendable attempt to balance the competing goals of efficiency and fairness in the resolution of these time-sensitive life-and-death conflicts. But TADA is too lopsided. It is far more efficient than it is fair. TADA should be amended to better comport with fundamental notions of procedural due process.</em>

scholarly journals Diverse Interests and International Legitimation: Public Choice Theory and the Politics of International Tax

AJIL Unbound ◽  
2020 ◽  
Vol 114 ◽  
pp. 265-269
Author(s):  
Lilian V. Faulhaber
Keyword(s):  
Political Parties ◽  
Public Choice ◽  
Tax Reform ◽  
Choice Theory ◽  
Public Choice Theory ◽  
Profit Shifting ◽  
National Interests ◽  
The World ◽  
International Tax

In her article, Mason concludes that politics – or “bargaining over national interests”— “will play a starring role in determining the outcomes” of the current digital tax project. In this essay, I apply public choice theory to the politics of international tax and argue that two questions can shape our understanding of international tax negotiations and therefore help us predict the outcomes of future international tax reform projects. First, what interests are country delegates representing? Second, how are countries using their involvement in international negotiations to represent these interests? The first question highlights that country delegates are often not defending some agreed-upon “national interest” but are instead often protecting the interests of particular political parties, industries, or taxpayers, which in turn means that interests can change over time and that some voices are missing from debates. The second question highlights that country delegates can engage in international tax negotiations in a variety of ways. They can try to limit what, if anything, the negotiations achieve; they can try to push for more expansive results; and they can use the negotiations to provide international support for their own country's laws. This essay focuses on one particular version of this third type of engagement, where delegates use their country's involvement in an international project to validate and legitimate an idea or proposal that may previously have had little support. I refer to this involvement as “international legitimation,” and I argue that the Organisation for Economic Co-operation and Development (OECD)/G20 Base Erosion and Profit Shifting (BEPS) Project shows that delegates who took this approach may have achieved the most long-term success in that their inclusion of little-known provisions or concepts in the international outputs of the BEPS Project ended up leading to these provisions and concepts being adopted by countries around the world.

ANALISIS PENERAPAN CONTROLLED FOREIGN COMPANY RULES DALAM MENGATASI BASE EROSION AND PROFIT SHIFTING DI INDONESIA

INFO ARTHA ◽  
2017 ◽  
Vol 3 ◽  
pp. 1-14
Author(s):  
Alfa Mightyn ◽  
Arifah Fibri Andriani
Keyword(s):  
Action Plan ◽  
Tax Avoidance ◽  
Building Blocks ◽  
The Other ◽  
Foreign Company ◽  
Tax Revenue ◽  
Profit Shifting ◽  
The World ◽  
Domestic Law ◽  
Cfc Rules

One cause for the inability to achieve the expected tax revenue target for some last years was the practice of tax avoidance. One form of tax avoidance is the utilization of Controlled Foreign Company (CFC) to defer the recognition of income from overseas over WPDN capital to be taxed in the country. This practice is also faced by many other countries in the world. The issue of the Base Erosion and Profit Shifting (BEPS) has been of concern to developed and developing countries. G20 countries cooperate with OECD to form a BEPS Project to formulate measures to address these BEPS. Indonesia as one of the Associate Members of the Project BEPS has a position that is parallel to the other OECD countries and participates in implementing the BEPS results. BEPS Project has resulted in BEPS Action Plans which one of them is Action 3: Strengthening CFC Rules. Action 3 will provide recommendations to the domestic law related to the design of CFC Rules. Until now, related to Action 3, BEPS Project has issued a Public Discussion Draft Action 3: Strengthening CFC Rules. This draft is divided into seven "building blocks" required for CFC Rules to be effective. The aim of this study is to analyze the effectiveness of CFC Rules in Indonesia, whether it is sufficient to prevent BEPS. After that, we can determine what steps should be taken by Indonesian tax authorities to strengthen the CFC Rules in Indonesia based on seven dimensions of building blocks. The conclusions of this study are (1) CFC Rules in Indonesia as a whole have not been able to overcome BEPS; and (2) When compared with the recommendations of the Discussion Draft Action Plan 3, CFC Rules Indonesia needs to be improved. However, the necessary improvements should be adjusted to match the needs and characteristics of Indonesia. 

Alternative dispute resolution, Africa, and the structure of law and power: the Horn in context

1999 ◽  
Vol 43 (1) ◽  
pp. 63-70 ◽  
Author(s):  
Elisabetta Grande
Keyword(s):  
Dispute Resolution ◽  
Alternative Dispute Resolution ◽  
Dispute Settlement ◽  
Political Leadership ◽  
Complex Societies ◽  
Horn Of Africa ◽  
Legal Transplant ◽  
The Past ◽  
The One ◽  
Dispute Resolution Mechanism

Data collected by comparative legal scholars show that legal transplants usually take place from more complex societies to less complex ones. By contrast, the alternative dispute resolution (ADR) movement that has recently developed in modern societies has been described as a return to a simple model of dispute settlement used in the past and in modern non-Western societies. Does this mean that we are experiencing a new kind of legal transplant, a transplant from less complex to more complex societies? In this article I will argue that this is not the case. Far from being a transplant from the southern to the northern hemisphere, ADR seems indeed to be a modern legal institution born from the retreat of the state from some of its traditional functions. A different question thus needs exploring: is ADR, at least, an institution that can easily be transplanted to Africa where the original transplant of the Western state has failed? In other words, is conciliatory ADR more similar to the African way of dealing with conflicts and consequently to be recommended as the dispute resolution mechanism for modern African states? The question appears to be appropriate in situations such as the one in the Horn of Africa—particularly Eritrea—where the new political leadership is confronting the difficult task of building a new legal system.

scholarly journals The Complementary Role of the WTO in the Enhancement of the Base Erosion and Profit Shifting Project

World ◽  
2021 ◽  
Vol 2 (2) ◽  
pp. 267-295
Author(s):  
Lijun Zhao ◽  
Angelina Karaivanova ◽  
Pengfei Zhang
Keyword(s):  
World Trade Organization ◽  
Tax Competition ◽  
World Trade ◽  
Tax Avoidance ◽  
Profit Shifting ◽  
Development Framework ◽  
Complementary Role ◽  
Tax Regimes ◽  
The World ◽  
International Tax

The current rules on international tax do not function properly due to the gaps which allow for tax manipulation. Whereas most tax agreements largely contribute to the prevention of double taxation, they do not effectively approach double non-taxation matters arising from tax competition based on the agreements’ bilateral nature. In order to tackle this issue, the Base Erosion and Profit Shifting project was introduced. Developed under the Organization for Economic Co-Operation and Development framework, the Base Erosion and Profit Shifting project deals with tax avoidance practices that use mismatches and gaps in tax rules. Nevertheless, the success of this new soft law initiative requires a forum that can promote and enforce its recommendations. The structural nature of the Organisation for Economic Co-operation and Development has led to the consideration of the World Trade Organization to be this forum by many. However, the World Trade Organization covered agreements are drafted in a way that includes some of the tax competition matters but not others, including traditional tax havens. This paper aims to bridge the gaps in the area of the international tax regime. By examining the international trade and international tax regimes, it is shown that there is space for variations in the World Trade Organization broadly drafted agreements for such matters to find a resolution. It is argued that the World Trade Organization can play a complementary role in the enforcement of the new international tax rules.

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