Single taxation has instinctive appeal as a policy goal, but a close examination of this seemingly simple slogan reveals a complex set of issues that do not lead to clear or simple answers. In October 2017, IBFD held a one-day symposium, exploring the notion of single taxation, to celebrate the third year of the Advanced Master’s in International Tax Law Programme offered by IBFD and the University of Amsterdam as a cooperative venture. This book contains the papers written in connection with this symposium. It starts with the LLM thesis of one of the graduates of the 2016/17 Advanced Master’s Programme, which carries out an in-depth investigation of what single taxation might mean in one common business structure. The remaining contributions follow the format of the symposium, each aspect of the topic being addressed in two papers that were written by leading authors independently of each other. The final two chapters reflect the Oxford-style debate that provided a lively finale to the symposium day. In offering two views of each segment of the issue, this book is intended to provoke discussion. In particular, it is hoped that it will encourage students of international tax law, of all ages and at all stages of their careers, to question their assumptions and form their own opinions.
Author(s): Joanna Wheeler
Publisher: IBFD
Year: 2018
Language: English
Pages: 272
City: Amsterdam
Cover
Title
Copyright
Table of Contents
Foreword
Part 1: Single Taxation as a Policy Goal
Chapter 1: In Search of Single Taxation
1.1. Introduction
1.2. The single tax principle: Historical background
1.2.1. Preliminary remarks
1.2.2. The single tax principle
1.2.2.1. Notion
1.2.2.2. Origin and developments of the principle in the international tax framework
1.2.3. The legal justification: Is there an international tax regime?
1.2.4. The theoretical justification: Single taxation as a remedy against which “evils”?
1.2.4.1. The intermediate ideal
1.2.4.2. More than single taxation
1.2.4.3. Less than single taxation
1.3. Reverse hybrids: Why less than single taxation?
1.3.1. Methodological approach: Linking theory and practice
1.3.2. The Dutch CV-BV structure
1.3.2.1. Commanditaire vennootschap: Legal framework
1.3.2.2. Features of the structure
1.3.2.3. Tax implications
1.3.3. Why less than single taxation?
1.3.3.1. Counting the levies
1.3.3.2. Base erosion: Who is the victim?
1.3.3.3. The origin of the “evil”: Tax arbitrage in the international debate
1.4. Achieving single taxation: The application of the BEPS Action 2 recommendations
1.4.1. The achievement of single taxation as envisioned by the OECD
1.4.2. Neutralizing hybrid mismatch arrangements: Recommendations for domestic law
1.4.2.1. The main solution
1.4.2.2. The linking rule applied to the CV-BV structure: Single taxation, finally?
1.4.2.3. The other specific recommendations
1.4.2.4. The treaty hybrid provision
1.5. Some critical remarks
1.5.1. Single taxation as an economic concept
1.5.2. Single taxation principle versus independent entity principle: Clash of the titans?
1.5.3. Taxing income or taxing persons?
1.5.4. Taxing somewhere, no matter where
1.6. Exploring other scenarios: The thin line between single and double taxation
1.6.1. Alternative measures
1.6.2. First hypothesis: Dual inclusion with relief
1.6.2.1. The OECD alternative for achieving single taxation
1.6.2.2. Brief remarks on the risks of over-taxation
1.6.3. Second hypothesis: Withholding tax on payments to a hybrid
1.6.4. Third hypothesis: Agreement on the qualification of the hybrid
1.6.5. The thin line between single and double taxation
1.7. Conclusions
Chapter 2: Exploring Single Taxation: From Concept to Implementation?
2.1. The concept of single taxation
2.2. Origins of the single taxation principle
2.3. Comments on single taxation
2.3.1. US tax law compared to single taxation
2.3.2. BEPS
2.3.3. Rate of single taxation
2.3.4. Economic double taxation
2.3.5. Customary international law
2.4. US territorial taxation
2.4.1. Change in policy
Appendix: Excerpts from official explanation of new legislation
Chapter 3: Single Taxation as a Policy Goal: Controversial Meaning, Lack of Justification and Unfeasibility
3.1. Introduction
3.2. What does “single taxation” mean?
3.2.1. Formal approach to single taxation: The number of levies does not mean anything
3.2.2. Substantive approach to single taxation: The tax rates determined by the benefits principle
3.2.3. Single taxation as an economic concept: Juridical double taxation versus economic double non-taxation
3.3. Why should single taxation be a policy goal?
3.3.1. Efficiency argument: The limitation of CEN
3.3.2. Equity arguments: The limitation of one perspective
3.4. Is the adoption of single taxation feasible?
3.4.1. Desirability: Single taxation against a nation’s will
3.4.2. Possibility: Single taxation beyond a nation’s capacity
3.5. Conclusion
Part 2: Do Taxpayers Have a Right to Effective Double Tax Relief?
Chapter 4: Do Taxpayers Have a Right to Effective International Tax Relief? A Sampling Analysis of the Universe of International Tax Systems
4.1. Introduction
4.2. International tax systems and methods to relieve international taxation
4.2.1. Sovereignty, sources of law and fragmentation of international tax law
4.2.2. International tax relief and tax policy issues: Method, intensity, extension
4.3. Sources of law and evidence about international rights for tax relief
4.3.1. Customary international tax law
4.3.2. Double tax treaty models: Have the OECD and UN adopted the international tax relief pattern?
4.3.3. Tax treaties effectively signed: DTAs and multilateral instruments
4.3.3.1. DTAs: The clearest evidence of international tax system(s)
4.3.3.2. Multilateral instruments: Is the MLI a game-changer?
4.3.4. What tax relief are tax authorities and tribunals applying?
4.4. Is there a process of harmonization in progress?
Chapter 5: Do Taxpayers Have a Right to DTR?
5.1. Introduction
5.2. Effective DTR
5.3. Possible foundations of a right to DTR
5.3.1. Current international order
5.3.2. Fairness
5.3.3. Ability to pay
5.3.4. Right to peaceful possession of property
5.3.5. Constitutional commercial principles
5.3.6. Broader human rights principles
5.4. Other types of double taxation
5.5. Conclusion
Part 3: Single Taxation in the EU Internal Market
Chapter 6: Single Taxation in a Single Market?
6.1. What is meant by single taxation in a single market?
6.2. Applying the single taxation principle in the European Union
6.3. Single taxation in the EMU
6.4. Double and single taxation and basic tax principles
6.4.1. The benefits principle permits double taxation
6.4.2. The ability-to-pay principle limits double taxation
6.4.3. The role of fiscal sovereignty
6.4.4. Conclusion as to double or single taxation
6.5. Double and single taxation in the single market
6.5.1. Difference between the EU and international tax communities
6.5.2. Limits on the legislative powers of income taxation in the European Union
6.5.3. Single taxation is no justification of national anti-abuse measures
6.5.4. Single taxation in CFC rules: Overruling national fiscal sovereignty
6.5.5. Single taxation and hybrids in the ATAD
6.5.6. Single taxation and barriers to interest deduction in the ATAD
6.6. General conclusions
Chapter 7: Double (Tax) Jeopardy
7.1. Single taxation or equitable taxation?
7.2. Ne bis in idem: Parallels between double taxation and double punishment
7.3. Single taxation as a human right?
7.4. Internal consistency or the territoriality principle as a remedy for double taxation in the European Union?
7.5. Conclusion
Appendix: Oxford-Style Debate
Chapter 8: International Single Taxation: A Misguiding Notion
8.1. Introduction
8.1.1. The motion of the House
8.1.2. Research question and methodology
8.2. The idea of single taxation
8.2.1. Theoretical framework
8.2.2. Traces of the notion of single taxation in the international tax framework
8.2.3. Single taxation: Can one really define it?
8.2.3.1. Taxing the same subject?
8.2.3.2. Taxing the same object?
8.2.3.3. Taxing at the fair rate?
8.3. Is single taxation the Holy Grail?
8.3.1. Over-taxation of cross-border income
8.3.2. Undertaxation of cross-border income
8.4. The idea of single taxation tested
8.4.1. The principle of (tax) sovereignty
8.4.2. The direct benefits principle
8.4.3. Internation equity
8.4.4. The principle of origin
8.4.5. Tax neutrality
8.4.6. The BEPS Project’s mission
8.5. Conclusions
Chapter 9: International Single Taxation: The Holy Grail
9.1. Introduction: From Chalcedon to Byzantium, with Mahabharata at their side
9.2. The two chimeras
9.3. Picking the Apple at Runnymede
9.4. The Ummah mindset and the Dutch migrant to Belgium who became the King of the Franks
9.5. The Echnaton conclusion
List of Contributors
