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Full-Text Articles in Law
Location Savings And Segmented Factor Input Markets: In Search Of A Tax Treaty Solution, Mitchell A. Kane
Location Savings And Segmented Factor Input Markets: In Search Of A Tax Treaty Solution, Mitchell A. Kane
Brooklyn Journal of International Law
This article analyzes the proper bounds of source-based taxation of profits generated when firms outsource factor inputs, such as labor, to achieve cost savings. The article advances arguments grounded in efficiency, treaty text, and international distribution to justify greater source-based taxation than has historically been the case. To implement such expanded taxation, the article proposes a modification to transfer-pricing rules in instances where factor inputs are acquired from affiliates and a modification to the tax treaty rules regarding permanent establishments where factor inputs are acquired from unrelated parties. Finally, the article deals with a range of complications, particularly relating to …
Kill-Switches In The U.S. Model Tax Treaty, Allison Christians, Alexander Ezenagu
Kill-Switches In The U.S. Model Tax Treaty, Allison Christians, Alexander Ezenagu
Brooklyn Journal of International Law
The new U.S. Model income tax treaty contains an unusual addition: mechanisms for the parties to unilaterally override the negotiated treaty rates in specified circumstances. Previewed last year in proposed form—a first for the Treasury—these new mechanisms work as kill-switches, partially terminating the treaty as to one or both treaty partners. The idea is to forestall a more problematic outcome, such as an enduring breach of one of the parties’ expectations, or the opposite, a complete termination of all the treaty terms in the face of such a breach. Yet embedding a kill-switch in a treaty creates distinct legal, procedural, …