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IT Lecture week 2, 3, 4 and 5 – Principles of International Tax law

Lecture 2:

IT Lecture 2 summary of principles of international tax

IT course 2018 Lecture 2 slide notes

Unfortunately there was a problem with the Electa Live recording.

Listen to this practical lecture on international tax and its application to transfer pricing as an example, to show how broad international tax is:

https://www.dropbox.com/s/jwkit2miuaks9k3/Lecture{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}202{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20Live{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20Tutorial.mp4?dl=0

Then for the final part of the lecture, on State Responsibility, listen to this:

https://www.dropbox.com/s/3g3mvbqgtn0uqh1/IT{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20Lecture{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}202{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20Principles{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20of{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20International{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20Tax.mp4?dl=0

Lecture 3:

This  lecture has been recorded in 3 parts:

3.1 VCLT – https://www.dropbox.com/s/fr620697ud1mdrr/IT{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20Lecture{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}203.1{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20-{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20VCLT{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20intro.mp4?dl=0

3.2 Article 1 and commentaries – https://www.dropbox.com/s/twvhza0u6j2i58w/IT{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20Lecture{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}203.2{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20Article{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}201{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20commentaries.mp4?dl=0

3.3 Preamble and BEPS Action 6 – https://www.dropbox.com/s/ldoq43ku39no4nq/IT{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20Lecture{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}203.3{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20Preamble.mp4?dl=0

IT course 2018 Lecture 3 slide notes incl VCLT – These are Dr Erasmus’ lecture notes posted to aid your additional reading on the VCLT and Article 1. The references to ReMarkable is a notepad device he uses, and do not apply to you.

IT course 2018 Lecture 3 notes on PREAMBLE – These are Dr Erasmus’ lecture notes for Lecture  3.3. These are the extra reading references referred to in Lecture 3.3 and the Lecture Notes:

draft-contents-2017-update-oecd-model-tax-convention

beps-reports-2015-executive-summaries

beps-action-6-preventing-the-granting-of-treaty-benefits-in-inappropriate-circumstance-peer-review-documents

Lecture 4:

4.1 Article 2 & 3 lecture – https://www.dropbox.com/s/43zdltml7q35ttf/IT{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20Lecture{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}204{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20Articles{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}202{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}26{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}203.m4v?dl=0

IT course 2018 Lecture 4 notes – These are Dr Erasmus’ lecture notes for Lecture 4. These are the extra reading references referred to in Lecture 4 and the Lecture Notes:

VWSA v CSARS STC v dividends Art 7 DTA

4.2 The Multilateral Instrument from BEPS Action 15 – listen to this presentation: REQUIRED: a 2 page point-by-point summary of this lecture for Tutorial 5 question 36 – https://www.dropbox.com/s/cyqfzi97fdhpuns/MLI{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20lecture{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20E{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}26Y{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}204{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20min{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}206min{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}2010.35min{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}2025.23min{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}2054min{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20105min.mp3?dl=0

and read the following articles:

4 MLI BEPS OECD Multilateral Convention to Prevent BEPS- Implementation Guide and Initial Thoughts

4 What is the _MLI_ and why is it important in the context of the South African tax system – Lexology

Lecture 5:

No additional lecture – another MLI  lecture will be given under Tax Treaties Lectures 17-21 later in the program” – Prof. Dr. Daniel N. Erasmus is traveling internationally this week again, attending an international law conference. The following is required instead of listening to a lecture.

5.1 An overview of the MLI – please provide the 2 page summary as requested above. If you have already done it, you don’t have to do it again! https://www.dropbox.com/s/cyqfzi97fdhpuns/MLI{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20lecture{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20E{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}26Y{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}204{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20min{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}206min{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}2010.35min{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}2025.23min{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}2054min{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}20105min.mp3?dl=0 as requested above.

5.2 Principles of international tax – some judicial decisions; and examples of some international tax problems – read pages 59-64 of Roy Rohatgi’s book, and provide a 1 page summary with the MLI summary above, due before the next Lecture 6.

IN ADDITION, you must read the following international tax related problem:

The facts are set out here (read this – no summary required):

Facts

The moot judgment (read the judgment and the legitimate expectations doctrine article):

Disputes Mauritius Legit Expect judgment

SUBSTANTIVE vs PROCEDURAL LEGITIMATE EXPECTATION ARTICLE

The supporting documents (this is not required reading but available for future research):

TP SARS Practice Note 7 Income Tax Practice Note 7 of 1999

SARS arguments Legitimate Expectation note

OECD How Acquiescence and Estoppel legally bound to OECD commentaries by Frank Engelen

Unilever Kenya Ltd v Commissioner KRA Income Tax Appeal 753 of 2003

 

 

Follow curriculum – Reading:

8 Chapter An introduction to Tax Treaties – Chapters 8.1, 8.2, and 8.3

OECD Income and Capital Model Convention and Commentary 2017 ARTICLES 1 to 4 and commentaries

UN Model Double Taxation Convention and Commentaries 2011 Update ARTICLES 1 to 4 and commentaries

A comparison between the OECD and UN MTC’s – 2-5 Lennard_0902_UN_Vs_OECD

17 – 21 Klaus Vogel Treatise on Double Tax Conventions B Expl Notes – this is one of the most recognized treatises on tax treaties, so it is worthwhile scanning the contents and taking note of some of the key topics on tax treaties:

4. Avoidance of double taxation, particularly through treaties, page 6

II. Legal Framework of Double Tax Treaties, page 10

  1. Conclusion of double tax treaties… (references to GATT et al), page 11

3. Structure and application of double tax treaties, page 17

III. Interpretation of Double Tax Treaties, page 19

  1. Distinctions from interpretation of domestic law, page 20
  2. General principles for interpretation of international agreements, page 21
  3. Particularities of double taxation treaties, page 25

2. Relation to Art. 3(2) MC, page 37

V. Double Taxation Treaties and Changes  to Domestic Law, page 44

3. Treaty override, page 47

b. Legal consequences of a ‘Treaty Override’, page 49

The Vienna Convention on the Law of Treaties: Vienna Convention on the law of treaties

beps-reports-2015-executive-summaries

Additional supplementary reading – some required to answer tutorial questions:

Reuven S. Avi-Yonah, International Tax as International Law, Kindle edition (2009): Chapter 1: https://www.amazon.com/International-Tax-Law-Analysis-Cambridge/dp/0521618010

Kenneth J. Vandevelde, Bilateral Investment Treaties: History, Policy and Interpretation, Kindle edition (2010): Chapter 7 Nondiscrimination, &.2 Most Favoured Nation and National Treatment: https://www.amazon.com/Bilateral-Investment-Treaties-History-Interpretation/dp/0195371364

2 Africa law summaries BITs article – remember the first lecture  and the mention of BITs treaties –  read this

And this – 2 US Bilateral Investment Treaties BITs Trade Compliance Center – Making America’s Trade Agreements Work for You!

The WTO and Direct Taxation – 2-5 Brief overview of WTO rules affecting tsxation from M Lang WTO and Direct Taxation

2 Int’l tax GATT Tax Disputes TP – download this EXCEL spreadsheet  with tax related summaries

Here is one such VAT dispute before the WTO – 2-5 WTO | dispute settlement – the disputes – DS309

More WTO generally – 2-5 8 WTO disputes Conflict of Norms in Public International Law

Hans Pijl, State Responsibility in Taxation Matters, Bulletin (2005): 2-5 Hans Pijl State Responsibility in Taxation Matters

SCAN TO SEE THE ROLE AN EXPERT WITNESS PLAYS IN INTERNATIONAL TAX DISPUTES 2-5 Evidence in international tax avery jones CIR v CDC Fiji

2-5 Occidental v ecuador VAT State Responsibility

2-5 READ for lecture 5 Paying lip service to the principles of interpretation synopsis-march-2018

A recent overview on MLI from the India FIT conference, Dec 2017:International tax Multilateral Instrument (MLI) and BEPS india fit 2017 – Daniel Erasmus AND International Tax FIT Conference 2017— BEPS and Multilateral Instrument (MLI) – Jairaj Purandare

2-5 India’s positions on MLI

4 MLI commentaries

4 MLI Country Monitor mauritius sa seychelles

4 Uganda- when can domestic laws override tax treaties?

Conflict of laws and application of foreign laws in US

Basic International Taxation Vol I by Roy Rohatgi – eBook – Chapter 2 – 1, 2, 3, and 4

Victor Thuronyi Comparative Tax Law – eBook, especially:

5.1 In General 133

5.2 Conflicting Maxims 136

5.3 Country Practice 137

5.4 Tax Avoidance: Introduction 150

5.5 Tax Avoidance and Evasion 154

5.6 Sham Transactions, Simulation, and Abuse of Law 157

5.7 General Anti-Avoidance Rules 160

 

SOURCE: of Constitutions of various Countries

http://www.wipo.int/wipolex/en/

The above link not only introduces you to various treaties and laws per country on IP issues (relevant to international tax/transfer pricing issues), but also gives you access to the latest Constitutions.

In tax law, Constitutions are important to establish if:

– the Constitution is the Supreme Law and overrides all other laws;

-there are administrative law remedies – when a Revenue Authority conducts an audit, should this be followed by a letter of findings before revised tax assessments are raised? Are you entitled to reasons for a revised assessment?

– and other issues discussed in detail in the seminal Ph.D thesis of Prof Dr Daniel N. Erasmus “An Analysis of Challenging the Commissioner’s Discretionary Powers to Audi Taxpayers in light of the Constitution, 1996” available here – http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2426754 – where similar principles applicable in South Africa in analyzing taxpayer constitutional rights during tax audits, are applicable to other jurisdictions with similar Constitutions;

-the implications of international law, especially to transfer pricing, PE’s and the like.

For further reading go to: https://taxjournal.eu/?p=34 to read how these principles apply in South Africa, where these principles are equally applicable in many other jurisdictions around the world.

 

Tutorial and assignment questions, dates and requirements:

International Tax Course Assignment and Tutorial Questions