Law Commons^™

'99-To-1’ Property Deals: Stamp Duty Avoidance Or Honest Mistake, Vincent Ooi

Research Collection Yong Pung How School Of Law

This article explains in detail the legal issues surrounding the recent ABSD audit and how exactly the general anti-avoidance rule and the stamp duty avoidance surcharge in the Stamp Duties Act 1929 can be invoked by the IRAS.The article highlights the fact that it may not be enough for a property buyer to show that the '99-to-1' holding was intended to enable the buyer to qualify for a home loan and not 'for stamp duty avoidance'. The property buyer must be able to answer the additional question of why the transfer of the property is 'staggered' in two stages and …

The Curious Case Of The 0.1 Per Cent Service Charge, Vincent Ooi

Research Collection Yong Pung How School Of Law

Just before 1 August 2022, a coffeeshop zi char chain announced that it would impose a 0.1% service charge. This decision was reversed within two weeks due to "customers' reactions".While the rate might appear to be absurdly low and not worth the trouble of imposing, this article suggests that there was more to the situation than first meets the eye. GST regulations require merchants to list GST inclusive prices unless the goods and services are provided by hotels and F&B outlets that are subject to a service charge. The 0.1% rate is thus explicable as a likely attempt to get …

Making Money From Cryptocurrency? The Taxman May Call On You, Hern Kuan Liu, Vincent Ooi

Research Collection Yong Pung How School Of Law

Miners, forgers, hobbyists, traders – different rules apply. Just don’t assume crypto investment is somehow immune to taxation.

The Taxation Of Cryptocurrency Gains, Vincent Ooi

Research Collection Yong Pung How School Of Law

Taking Singapore as an example, this article lays out a series of tests for determining whether gains arising from the disposal of cryptocurrencies are trade or business income, “all other income” or capital gains. It also considers the possibility of a presumption that individuals engaging in such transactions are gambling.

Singapore’S Special Insolvency Scheme For Small Companies, Vincent Ooi, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

In this article, the authors examine a temporary program in Singapore to help micro and small businesses facing insolvency amid the COVID-19 crisis.

Tax Considerations For Funds Structuring In Asia, Vincent Ooi

Research Collection Yong Pung How School Of Law

Tax considerations play a major role in the decisions of fund managers of where to base their funds. The highly mobile nature of capital has resulted in tax competition, leading to several host jurisdictions for funds in Asia (Hong Kong, Singapore, Labuan, and the BVI) having very similar tax characteristics in terms of low effective corporate income tax rates; no capital gains taxes; no exit taxes; a single tier of taxation; and generally no withholding taxes. Other ways in which jurisdictions have attempted to distinguish themselves include a strong Double Tax Agreement network, certainty on the taxation of the carried …

Tax Implications Of Covid-19 In Singapore, Vincent Ooi

Research Collection Yong Pung How School Of Law

As taxpayers in Singapore deal with a radically changed business environment due to COVID-19, there is a need to make non-routine decisions quickly. These decisions can have significant tax implications, which will likely manifest themselves later as the economy recovers. It is critical for taxpayers to understand the tax consequences of their decisions, even as they focus on issues of immediate survival. While the majority of the relevant tax principles are not new, the COVID-19 pandemic has resulted in the need to apply these existing principles to new situations and increased the frequency of certain activities that may have been …

Singapore Property Tax Law As It Stands: The Rebus Sic Stantibus Principle And The Statutory Formula, Vincent Ooi

Research Collection Yong Pung How School Of Law

The Singapore jurisprudence appears to have adopted the proposition that the rebus sic stantibus principle is to be disapplied where section 2(3) of the Singapore Property Tax Act (“PTA”) (the “Statutory Formula”) is applied. This article argues that this proposition perhaps ought to be stated more precisely. The principle is only disapplied where section 2(3)(b) is applied because it would run contrary to the statutory fiction imposed by section 2(3)(b) that the land is to be valued as if it were vacant land. There should be no disapplication of the principle where section 2(3)(a) is applied due to the absence …

The Anti-Avoidance Response To Professionals Incorporating Companies In Singapore, Vincent Ooi

Research Collection Yong Pung How School Of Law

The issue of whether the incorporating of companies by professionals in Singapore constitutes tax avoidance has attracted considerable attention. The recent case of GCL v. CIT provides some guidance in this area. It reaffirms the general two-part test in CIT v. AQQ, requiring one to first apply the objective predication principle before moving on to consider the subjective bona fides commercial reason exception. It establishes that the mere fact that a professional incorporated a company through which to practise would not be sufficient to constitute tax avoidance, since such an arrangement is common and widely used, with established commercial benefits. …

The Wealth Tax: Apportionment, Federalism, And Constitutionality, Alex Zhang

Faculty Articles

Proposals of wealth taxation as a mechanism to combat economic inequality and raise revenue for welfare programs have dominated recent political debate. Despite extensive academic commentary, questions surrounding the constitutionality of a wealth tax remain unresolved. Previous scholarly approaches have drawn a dichotomy between two key cases. Supporters of the wealth tax emphasize Hylton's functional rule for identifying direct taxes, which must be apportioned under the Constitution, and reject Pollock, which invalidated the federal income tax on the grounds that it was a direct tax. Opponents of the wealth tax, in contrast, argue that Pollock, rather than …

The Village Of Billionaires: Fair Taxation And Redistribution Amid Relative And Absolute Poverty, Alexis Brassey, Henry Ordower

All Faculty Scholarship

Tax justice and principles underpinning the international tax regime are in vogue. The idea that companies and individuals need to pay their "fair share", not just in the domestic sense but also the international sense, is now a mainstream position. This paper explores the problems relating to what might constitute a "fair share" by setting out what is meant when this expression is used. A reasonable assumption is to consider taxation as the means by which the state funds public services and in some jurisdictions, contributes to greater equality within society. Those goals, however, give rise to competing claims. This …

The Law And Economics Of Redistribution, Matthew Dimick

Journal Articles

Should legal rules be used to redistribute income? Or should income taxation be the exclusive means for reducing income inequality? This article reviews the legal scholarship on this question. First, it traces how the most widely cited argument in favor of using taxes exclusively--Kaplow & Shavell's (1994) double-distortion argument--evolved from previous debates about whether legal rules could even be redistributive and whether law and economics should be concerned exclusively with efficiency or with distribution as well. Next, it surveys the responses to the double-distortion argument. These responses appear to have had only limited success in challenging the sturdy reputation of …

Stamp Duty Issues In Singapore Corporate Practice, Vincent Ooi

Research Collection Yong Pung How School Of Law

A new dimension to the determination and computation of stamp duties payable in corporate transactions has been introduced due to the Additional Conveyance Duties (“ACD”) Regime. For companies with significant residential property holdings, liability to pay ACD potentially extends to all transactions involving the issuance, transfer or cancellation of equity interests. This paper considers the impact of ACD on several common corporate transactions in Singapore, addressing the risks practitioners may face in being blindsided by potential tax liabilities. Besides highlighting potential pitfalls, this paper explores the use of advance rulings and preferring debt financing over equity financing for tax optimisation.

Partnerships, Vincent Ooi

Research Collection Yong Pung How School Of Law

Partnerships and tax—overview: The statutory definition of a partnership is the “relation which subsists between persons carrying on a business in common with a view of profit”. Those persons could be natural persons, or other legal entities such as companies or trustees. However, a registered company under the Companies Act (Cap. 50) (2006 Rev. Ed.) is not a partnership.

Before International Tax Reform, We Need To Understand Why Firms Invert, Michael S. Knoll

All Faculty Scholarship

A wave of corporate inversions by U.S. firms over the past two decades has generated substantial debate in academic, business, and policy circles.

The core of the debate hinges on a couple of key economic questions: Do U.S. tax laws disadvantage U.S.-domiciled companies relative to their foreign competitors? And, if so, do inversions improve the competitiveness of U.S. multinational firms both abroad and at home?

There is unfortunately little, if any, empirical work directly determining whether U.S.-based MNCs are currently tax-disadvantaged compared to their foreign rivals, or measuring the amount by which (if any) U.S.-based MNCs improve their competitive position …

The Tax Treatment Of Tokens: What Does It Betoken?, David J. Shakow

All Faculty Scholarship

Digital tokens have been used to raise substantial amounts of money. But little attention has been paid to the tax consequences surrounding their issuance and sale. There are significant potential tax liabilities lurking in the use of digital tokens. But, because of the anonymity inherent in the blockchain structures used for the issuance of tokens and payments for them, there is a significant question as to whether those tax liabilities will ever be collected.

The Gordian Knot: How The United States, The European Union, And Organization For Economic Cooperation And Development Took Action Against Corporate Tax Avoidance, Katlyn Twomey

Honors Projects in History and Social Sciences

In 2016, the United States had the highest corporate tax rate in the world. Perhaps, the high tax rate could be why American corporations are holding an estimated $2.5 trillion abroad (Cox 2016). According to a study by the Bureau of Economic Analysis, U.S. firms pay a measly 3% in tax to foreign governments on those profits, rather than the 35% U.S. corporate tax rate. How are these corporations able to legally avoid paying taxes on a large percentage of their profits? Many use various loopholes in the laws to shift profits into other countries or U.S. states referred to …

Changing The Tax Code To Create Consumer-Driven Health Insurance Competition, Regina Herzlinger, Barak D. Richman

Faculty Scholarship

Because current tax laws exclude employer-paid health insurance premiums from employees’ taxable wages and income, employer-sponsored insurance remains the primary source of health insurance for most employed Americans. Economists have long blamed the employer-based insurance tax exclusion for inflating health care costs, and, more recently, for constraining income growth and exacerbating income inequality.

We execute a simulation to test the effect of permitting employees to receive their employers’ premium contribution directly and then purchase health insurance themselves, using tax-free funds. Employees could deduct for income tax purposes the amount used for insurance and, if they spend less than the amount …

Unintended Consequences Of Cigarette Prohibition, Regulation, And Taxation, Jonathan D. Kulick, James E. Prieger, Mark A. R. Kleiman

School of Public Policy Working Papers

Abstract Laws that prohibit, regulate, or tax cigarettes can generate illicit markets for tobacco products. Illicit markets both reduce the efficacy of policies intended to improve public health and create harms of their own. Enforcement can reduce evasion but creates additional harms, including incarceration and violence. There is strong evidence that more enforcement in illicit drug markets can spur violence. The presence of licit substitutes, such as electronic cigarettes, has the potential to greatly reduce the size of illicit markets. We present a model demonstrating why enforcement can increase violence, show that states with higher tobacco taxes have larger illicit …

Possible Bias In Asset Valuations: An Application Of The Fraud Risk Triangle To Divorce Cases, Jennifer Tomasetti

Honors Projects in Accounting

No abstract provided.

Revenue, U.S. Government, Bert Chapman

Libraries Faculty and Staff Scholarship and Research

Provides a historical overview of U.S. Government revenue receipts and spending during the early years of national history. Presents revenue generation statistics, information on revenue sources, and information on domestic and international political and economic factors affecting government revenue receipts.

Tearing Out The Income Tax By The (Grass)Roots, Lawrence A. Zelenak

Faculty Scholarship

No abstract provided.

Has Government Tax Policy In Greece Led To A Large Shadow Economy?, Nils Thompson

Honors Projects in Economics

This capstone investigates the impact that tax policy has on the shadow economy in Greece. Greece has one of the largest shadow economies in the world and the largest in the European Union, with tax evasion being one of the main drivers. While previous research has provided measures of the shadow economy, none matches the shadow economy estimations with policies, laws, and agencies enacted by the government, specifically over the period in time of 1990-2012. This study contributes to the literature by connecting the policies implemented by the government with the size of the shadow economy in Greece, along with …

The U.S. Tax System: Where Do We Go From Here?, Adele C. Morris

Brookings Scholar Lecture Series

This talk will explore how the U.S. tax system really works, where revenue comes from, where spending goes, what a tax expenditure is, and discuss deficit prognoses and how the recent political debates could affect our economy. The speaker will highlight some advantages and disadvantages of different budget balancing options.

A Preface To Neoclassical Legal Thought, Herbert J. Hovenkamp

All Faculty Scholarship

Most legal historians speak of the period following classical legal thought as “progressive legal thought.” That term creates an unwarranted bias in characterization, however, creating the impression that conservatives clung to an obsolete “classical” ideology, when in fact they were in many ways just as revisionist as the progressives legal thinkers whom they critiqued. The Progressives and New Deal thinkers whom we identify with progressive legal thought were nearly all neoclassical, or marginalist, in their economics, but it is hardly true that all marginalists were progressives. For example, the lawyers and policy makers in the corporate finance battles of the …

Tax Reform In Rhode Island: Developing A High Quality Revenue Stream, Nicholas A. Denice

Honors Projects in Accounting

The present study explores the current state of taxation in Rhode Island in relation to its sales tax. An analysis of the literature will examine how the current sales tax system compares with other alternatives and if it hurts the state's economic competitiveness as shown in tax burden studies. Using Rhode Island tax data from the Annual State Audit and Consumer Expenditure Survey, this study will analyze the current sales tax system in the state and determine whether an alternative model would lead to a higher-quality revenue stream. Data from the State of Rhode Island General Audit Report and the …

Business Taxes And International Competitiveness: Understanding How Taxes Can Distort Capital Ownership And Designing A Nondistortive International Tax System, Michael S. Knoll

All Faculty Scholarship

Around the world, policymakers are obsessed with the competitiveness of their domestic companies and domestically based multinational corporations (MNCs). Such concerns frequently influence policy, especially tax policy. In this paper, I develop a theory of how taxes affect the international competitiveness of businesses. I then use that theory to evaluate basic tax policy decisions, such as the choice between residence- and source-based taxation and the level of tax rates, and to understand the impact various provisions in the U.S. Internal Revenue Code are likely to have on the competitiveness of U.S.-based corporations and MNCs.

Who Pays And Who Benefits: 21st Century Tax Reform For Maine, Bureau Of Labor Education. University Of Maine

Bureau of Labor Education

Most people do not enjoy paying taxes, which are the primary source of revenue for governments at all levels, but most people also probably agree that ultimately, some kind of taxation is necessary. However, public support for taxes is greatly influenced by perceptions of whether tax systems are fair or equitable, and these perceptions are unfortunately not always based on factual information or clear understanding. The ongoing debate over Maine’s latest attempt at tax reform is no exception.

From Equity To Adequacy: Evolving Legal Theories In School Finance Litigation: The Case Of Connecticut, Lesley A. Denardis

Political Science & Global Affairs Faculty Publications

Since the landmark school finance decision Serrano v. Priest (1971) ruled that California’s reliance on the property tax to finance public schools violated equal protection provisions in state and federal constitutions, a wave of school finance litigation swept the United States. Connecticut followed with Horton v. Meskill (1977) and most recently with CCJEF v. Rell (2005). The Connecticut State Supreme Court has been a key actor in the policy making process concerning school finance reform in Connecticut. This study will trace the history of school finance litigation in Connecticut and the evolving legal theories used to undergird major court cases. …

Economic Trends And Judicial Outcomes: A Macrotheory Of The Court, Thomas Brennan, Lee Epstein, Nancy Staudt

Faculty Working Papers

In this symposium essay, we investigate the effect of economic conditions on the voting behavior of U.S. Supreme Court Justices. We theorize that Justices are akin to voters in political elections; specifically, we posit that the Justices will view short-term and relatively minor economic downturns—recessions—as attributable to the failures of elected officials, but will consider long-term and extreme economic contractions—depressions—as the result of exogenous shocks largely beyond the control of the government. Accordingly, we predict two patterns of behavior in economic-related cases that come before the Court: (1) in typical times, when the economy cycles through both recessionary and prosperous …