Taxation-Transnational Commons^™

U.S. Tax Reform: Considerations For Service Members [Notes], Kan Samuel

Faculty Scholarship

No abstract provided.

Guidance Is Definitive, Reality Is Frequently Inaccurate: The Lingering Saga Of Rev. Rul. 91-32, Robert L. Daily

Georgia Law Review

Partnership and international taxation are two of the
most mind-numbing and inconsistent areas of the law.
Even more confusion occurs when the two intersect, such
as when a nonresident sells an interest in a U.S.
partnership. Many have wasted precious time and
abundant ink to come up with a solution. The IRS first
tried in Rev. Rul. 91-32, concluding that a nonresident
would be subject to tax if the partnership had assets
producing income generated from property in United
States. Although the guidance was appropriately
criticized for being statutorily inconsistent, this Note
argues that it nonetheless got to the right …

The Futility Of Walls: How Traveling Corporations Threaten State Sovereignty, Darren Rosenblum

Elisabeth Haub School of Law Faculty Publications

Inversions--mergers in which one firm merges with another abroad to avoid taxes in its home country--have spread as globalization has reduced many of the transactional costs associated with relocating. As firms acquire the power to choose the laws that govern them, they challenge the sovereignty of nation-states, who find their ability to tax and regulate firms depleted. States and firms compete in a game of cat and mouse to adapt to this new global reality. The subversion of state power by these firms reveals the futility of walls, both literal and regulatory. This Essay describes the phenomenon of these “traveling …

Can Gilti + Beat = Globe?, Mindy Herzfeld

UF Law Faculty Publications

The OECD is moving forward with consideration of a minimum tax as part of its solution to taxation of the digital economy. Part of a template for such a minimum tax may be the version enacted by the United States (US) in 2017 as an expansion of its Controlled Foreign Corporation (CFC) regime, known as Global Intangible Low Taxed Income (GILTI). But the OECD version will undoubtedly be different from the US iteration. It’s likely that it would also include some aspects of a minimum tax being proposed by other OECD members such as Germany and France, namely a tax …

Taxing The Digital Economy Post-Beps…Seriously, Andres Báez Moreno, Yariv Brauner

UF Law Faculty Publications

For years the advent of the digital economy has left countries stumped in their attempt to tax income earned by foreign firms without physical presence within their jurisdiction. International organizations and their member countries have failed in their attempts to tweak the rules of the international tax regime and address these challenges presented by the digital economy. This article argues that such conservative approach could not work, and fundamental reform is inevitable. The article proposes a withholding tax solution, explaining its merits and demonstrating its superiority over alternative reforms proposed to date.

Book Review: International Tax Policy: Between Competition And Cooperation, Yariv Brauner

UF Law Faculty Publications

The author reviews International Tax Policy: Between Competition and Cooperation. By Tsilly Dagan. Cambridge Tax Law Series, 2018.

What Is Puerto Rico?, Samuel Issacharoff, Alexandra Bursak, Russell Rennie, Alec Webley

Indiana Law Journal

Puerto Rico is suffering through multiple crises. Two are obvious: a financial crisis triggered by the island’s public debts and the humanitarian crisis brought on by Hurricane Maria. One is not: the island’s ongoing crisis of constitutional identity. Like the hurricane, this crisis came from outside the island. Congress, the U.S. Supreme Court, and the Executive Branch have each moved in the last twenty years to undermine the “inventive statesmanship” that allowed for Puerto Rico’s self-government with minimal interference from a federal government in which the people of Puerto Rico had, and have, no representation. From the point of view …

The Internationalization Of Tax Disputes Issues And Options Of A Standing International Tax Court, Xueliang Ji

Cardozo International & Comparative Law Review

With the growing criticisms on the traditional investor-state arbitration mechanism, the European Union has proposed an innovative provision named the Investment Court System ICS, and it has introduced it in some significant bilateral investment treaties, like Comprehensive Economic and Trade Agreement CETA and Transatlantic Trade and Investment Partnership TTIP. In the meantime, as taxation is a component of the investment polies, the protection of the rights enjoyed by the foreign taxpayers matters as well. However, the current tax related dispute settlement methods also have several defects. This article attempts to incorporate the ICS in resolving tax related disputes and taking …

International Tax Simplification In South Africa Through Managing Substantive Complexity And Improving Drafting Efficiency, Jinyan Li, Teresa Pidduck

Articles & Book Chapters

This chapter discusses the complexity of the South African international tax legislation in terms of both its substantive complexity and drafting complexity. Substantive complexity is established by examining the current legislation governing tax jurisdiction, the taxation of resident taxpayers and non-resident taxpayers as well as international tax incentive measures and anti-avoidance rules. Drafting complexity is established by comparing the South African Income Tax Act to the Canadian Income Tax Act in respect of the drafting of individual provisions and arrangement of provisions. The chapter recommends ways to simplify the South African international tax legislation by: (a) accepting substantive complexity that …

Superficial Proxies For Simplicity In Tax Law, Emily Cauble

University of Richmond Law Review

Simplification of tax law is complicated. Yet, political rhetoric surrounding tax simplification often focuses on simplistic, superficial indicators of complexity in tax law such as word counts, page counts, number of regulations, and similar quantitative metrics. This preoccupation with the volume of enacted law often results in law that is more complex in a real sense. Achieving real simplification—a reduction in costs faced by taxpayers at various stages in the tax planning, tax compliance, and tax enforcement process—often requires enacting more law, not less. In addition, conceptualizing simplicity in simplistic terms can leave the public vulnerable to policies advanced under …

The Rule Of Law In International Tax Relations, Jinyan Li

All Papers

This paper discusses the issue of rule of law in international tax relations. International tax relations refer to the relationship between countries in terms of substantive tax laws and tax administration. It aims to contribute to the conversations about the Belt and Road Initiative (BRI) tax administration cooperation.

Digital Taxation Lessons From Wayfair And The U.S. States’ Responses, Walter Hellerstein, Jeffrey Owens, Christina Dimitropoulou

Scholarly Works

This article provides a detailed and structured synthesis of the discussion that took place in the context of the "fireside chat" event held by the WU Global Tax Policy Center at the Institute of Austrian and International Tax Law on December 17, 2018, at which Hellerstein was the guest speaker. The event was one of the initiatives of the Digital Economy Tax Network, a multi-stakeholder forum, which organized a workshop on the VAT/goods and services tax and the digital economy December 17-18, 2018, in Vienna. In this article, the authors examine the lessons that the U.S. Supreme Court's Wayfair decision …

Reflections On The Cross-Border Tax Challenges Of The Digital Economy, Walter Hellerstein

Scholarly Works

In this article, Hellerstein discusses common problems confronting national and subnational jurisdictions in addressing the cross-border tax challenges of the digital economy. This article is based on the author's November 21 inaugural lecture as a visiting professor at the Vienna University of Economics and Business.

The Oecd Unified Approach: Nexus, Scope, And Coexisting With Dsts, Assaf Harpaz

Scholarly Works

This article comments on the OECD Secretariat Proposal for a “Unified Approach” under Pillar One, released October 9, 2019. The article focuses on the proposal’s scope, nexus, administration and compliance, proposed “Amount C” and compatibility with unilateral digital service taxes. The article suggests a nexus that does not consider size-limiting worldwide revenue thresholds and offers an alternative de minimis country-specific sale-based proposal. Comments on the OECD proposal were submitted by the author as part of the OECD’s public consultation process in November 2019.

Attacking Innovation, Jeffrey A. Maine

Faculty Publications

Economists generally agree that innovation is important to economic growth and that government support for innovation is necessary. Historically, the U.S. government has supported innovation in a variety of ways: (1) a strong legal system for patents; (2) direct support through research performed by government agencies, grants, loans, and loan guarantees; and (3) indirect support through various tax incentives for private firms. In recent years, however, we have seen a weakening of the U.S. patent system, a decline in direct funding of research, and a weakening of tax policy tools used to encourage new innovation. These disruptive changes threaten the …

Symposium: The Future Of The New International Tax Regime, Rosanne Altshuler, Fadi Shaheen, Jeffrey Colon, Michael Graetz, Rebecca Kysar, Susan Morse, Daniel Shaviro, Richard Phillips, Daniel Rolfes, Daniel Rosenbloom, Stephen Shay, Steven Dean

Faculty Scholarship

The symposium was held at Fordham University School of Law on October 26, 2018. It has been edited to remove minor cadences of speech that appear awkward in writing and to provide sources and references to other explanatory materials in respect to certain statements made by the speakers.

When Data Comes Home: Next Steps In International Taxation’S Information Revolution, Shu-Yi Oei, Diane M. Ring

Faculty Scholarship

Over the last decade, there has been a revolution in cross-border tax information exchange and reporting. While this dramatic shift was the product of multiple forces and events, a fundamental reality is that politics, technology, and law intersected to drive the shift to the point where nation-states will now transmit and receive from each other significant ongoing flows of taxpayer information. States can now expect to accumulate large stashes of data on cross-border income, assets, and activities on a scale and level of comprehensiveness unmatched by previous information exchange regimes.

This article examines the pressing follow-up question of how this …

The Digital Services Tax On The Verge Of Implementation, Wei Cui

All Faculty Publications

France enacted the digital services tax (DST) in 2019, and similar legislation is pending in the United Kingdom, Spain, Italy, and other countries. The DST can be viewed as a tax on location-specific rent (LSR), and it arguably solves genuinely new problems in international taxation. The author briefly reviews this justification of the DST and further examines the DST design in light of three criticisms. The first criticism is that certain features of the DST render it similar to distortionary import tariffs. The second is that the DST would not be borne by digital platforms but would only be shifted …

China As A "National Strategic Buyer": Toward A Multilateral Regime For Cross-Border M&A, Jeffrey N. Gordon, Curtis J. Milhaupt

Faculty Scholarship

Unlike the case of cross-border trade, there is no explicit international governance regime for cross-border M&A; rather, there is a shared understanding that publicly traded companies are generally for purchase by any bidder – domestic or foreign – willing to offer a sufficiently large premium over a target’s stock market price. The unspoken premise that undergirds the system is that the prospective buyer is motivated by private economic gain-seeking.

The entry of China into the global M&A market threatens the fundamental assumptions of the current permissive international regime. China has become a significant player in the cross-border M&A market, particularly …

International Taxation In An Era Of Digital Disruption: Analyzing The Current Debate, Itai Grinberg

Georgetown Law Faculty Publications and Other Works

The “taxation of the digital economy” is currently at the top of the global international tax policymaking agenda. A core claim some European governments are advancing is that user data or user participation in the digital economy justifies a gross tax on digital receipts, new profit attribution criteria, or a special formulary apportionment factor in a future formulary regime targeted specifically at the “digital economy.” Just a couple years ago the OECD undertook an evaluation of whether the digital economy can (or should) be “ring-fenced” as part of the BEPS project, and concluded that it neither can be nor should …

Tax Treaty Abuse And The Principal Purpose Test - Part I, David G. Duff

All Faculty Publications

The Multilateral Convention to Implement Tax Treaty Measures to Prevent Base Erosion and Profit Shifting (MLI) has been described as “an historical turning point in the area of international taxation” which introduces a third layer of tax rules for the taxation of cross-border transactions in addition to domestic tax law and bilateral tax treaties. Of the many provisions of the MLI, the most important are the preamble text in Article 6(1) and the so-called principal purpose test (PPT) in Article 7(1), both of which have been adopted by all signatories to the MLI in order to satisfy the OECD’s minimum …

Tax Treaty Abuse And The Principal Purpose Test: Part Ii, David G. Duff

All Faculty Publications

The Multilateral Convention to Implement Tax Treaty Measures to Prevent Base Erosion and Profit Shifting or Multilateral Instrument (MLI) has been described as “an historical turning point in the area of international taxation” which introduces a third layer of tax rules for the taxation of cross-border transactions in addition to domestic tax law and bilateral tax treaties. Of the many provisions of the MLI, the most important are the preamble text in Article 6(1) and the so-called principal purpose test (PPT) in Article 7(1), both of which have been adopted by all signatories to the MLI in order to satisfy …

Legislative Foundation Of The United States' New International Tax System, Joshua D. Harms

Seattle University Law Review

This Note begins with commentary on the United States’ former worldwide system of taxation. This system taxed multinational corporations’ offshore profits at the applicable domestic income tax rate less credits for taxes paid to foreign governments. This tax regime provided for the deferral of income tax due on the profits of multinational corporations’ overseas operations until the time of repatriation. This Note considers the issues inherent in this system and analyzes the repatriation tax holiday under the American Jobs Creation Act of 2004. This holiday has been unanimously criticized by both sides of the political aisle and led to large …

Residence-Based Formulary Apportionment: (In-)Feasibility And Implications, Wei Cui

All Faculty Publications

I examine one way of taxing international corporate income that has not previously been studied, “residence-based formulary apportionment” or RBFA. I first offer a new taxonomy of different ways of taxing corporate income by reference to individual shareholders, and distinguish what I call the “shareholder attribution” approach from integration, pass-through, and other approaches. I then argue that although traditional international legal norms had led international tax design to avoid taxing foreign corporations “unconnected” with the taxing jurisdiction (e.g. foreign corporations earning only foreign income), these legal norms have gone through substantial transformations in recent years. The exercise of jurisdiction over …

The Beat And Treaty Overrides: A Brief Response To Rosenbloom And Shaheen, Reuven S. Avi-Yonah, Bret Wells

Articles

In a recent article in Tax Notes International, H. David Rosenbloom and Fadi Shaheen argue that the base erosion and antiabuse tax (IRC section 59A, as enacted in 2017) is a potential violation of articles 23 and 24 of U.S. tax treaties. They say the BEAT does not override those treaties, so those agreements can be relied on to overcome the effects of the BEAT. In our opinion, that conclusion is wrong for two reasons: The BEAT is not a treaty violation, and even if were, it is a treaty override.

Holding U.S. Corporations Accountable: Toward A Convergence Of U.S. International Tax Policy And International Human Rights, Jacqueline Laínez Flanagan

Pepperdine Law Review

International human rights litigation underscores the inverse relationship between corporate power and corporate accountability, with recent Supreme Court decisions demonstrating increased judicial protections of corporate rights and decreased corporate accountability. This article explores these recent decisions through a tax justice framework and argues that the convergence of international human rights law and U.S. international tax policy affords alternate methods to hold corporations accountable for violations of international law norms. This article specifically proposes higher scrutiny of foreign tax credits and an anti-deferral regime targeting the international activity of U.S. corporations that use subsidiaries to shelter income and decrease taxation while …

Beps, Atap, And The New Tax Dialogue: "A Transatlantic Competition?", Reuven Avi-Yonah, Gianluca Mazzoni

Articles

Since its launch in 2013, the US actively participated in all aspects of the BEPS project. However, until recently, the general view was that following the conclusion of the BEPS negotiations and the change of Administration the US is stepping back from the BEPS process. While the EU was charging ahead with implementing BEPS through the Anti-Tax Avoidance Directive (ATAD), the US stated that it was already in compliance with all BEPS minimum standards and therefore other than Country-by-Country Reporting (CbCR) it had no further BEPS obligations. The US decided not to sign the Multilateral Instrument (MLI) to implement BEPS …

The International Provisions Of The Tcja: Six Results After Six Months, Reuven S. Avi-Yonah

Law & Economics Working Papers

Over six months have passed since the enactment of the TCJA, so it is now possible to reach some preliminary conclusions on its impact. The main ones are:

1. The transition tax plus anticipated GILTI tax minus territoriality have resulted in higher GAAP effective tax rates for 2017. In some cases they approach 35% for large multinationals with a lot of offshore income. For the first six months of 2018, however, overall corporate tax revenues are sharply down because of the 21% rate plus expensing. This is the exact reverse of the situation before TCJA in which MNEs showed very …

Mediation For Indonesian Tax Disputes: Is It Potential Alternative Strategy For Resolving Indonesian Tax Disputes?, Khoirul Hidayah, Suhariningsih Suhariningsih, Istislam Istislam

Indonesia Law Review

Tax dispute resolution in Indonesia has not yet met the principles of quick, simple, and economical. Taxpayers have to wait more than 3 years for the lawful certainty. This paper elaborates the potential strategy in resolving the tax dispute in Indonesia through administrative law. OECD has suggested taxpayers and revenue body to build positive connection through the changing of confrontation to the collaborative relationship. Mediation is a solution to encourage this positive bond in solving the dispute. It is successfully implemented in Australia. The similar way is strongly recommended for the Indonesian Government to develop a good relationship between taxpayers …

Front Matter (Letter From The Editor, Masthead, Etc.)

The Contemporary Tax Journal

No abstract provided.