The decision is important both for companies investing outside their home country and for individuals living and working in more than one country. Cross-border tax disputes can arise when two states assert conflicting rights to tax an individual or company.
As cross-border trade grows and more and more people work abroad, such disputes are likely to become more frequent. Many countries are becoming increasingly reliant on enforcement of tax law as a revenue raising measure to address budgetary deficits without introducing measures, which could negatively impact on the ability to attract foreign direct investment.
This has resulted in many countries, like Ireland, enhancing domestic revenue collection powers and resources. It is imperative that international taxpayers adapt to the new international tax environment and implement a proactive and coordinated approach to tax policy and governance. In particular, taxpayers should ensure that operations and structures align in all respects to produce a robust and fully defensible position in the event of challenge.
It is equally important for a country like Ireland with an open, outward-facing economy that all domestic efforts are taken to promote certainty in taxation and to ensure that the appropriate infrastructure is in place to enable international taxpayers resolve disputes in an efficient and principled manner. This impact has been two-pronged. Firstly, the proposals emanating from the final BEPS reports are being transposed into national and supranational law. Secondly, many countries and institutions have sought to leverage the reformative impetus surrounding the BEPS Project to unilaterally drive developments beyond the boundaries of the BEPS reports.
The inevitable uncertainty arising from such large-scale reform together with a lack of uniformity in implementation in an environment of enhanced cooperation between tax authorities make it unsurprising that significant increases in international tax disputes are anticipated. The increase in tax disputes, both from an Irish and an international perspective, will largely emanate from the following sources:.
Ireland has traditionally operated a self-assessment based cooperative system of tax compliance for corporate taxpayers. By virtue of the changes to the international tax landscape, taxpayers located in Ireland with cross-border operations will experience an increase in tax disputes over the coming years.
The Irish Revenue Commissioners have, like many tax authorities internationally, enhanced the resources allocated to its international tax, transfer pricing and competent authority divisions in order to increase domestic tax revenues and to defend the Irish tax base. Therefore, in addition to an increase in disputes, it is likely that taxpayers in Ireland will encounter more interactions generally with the Irish Revenue Commissioners, which are increasingly formal and adversarial in many instances.
The measures proposed in the final BEPS reports are undergoing multi-speed domestic implementation. Any divergence or unilateral action on implementation is likely to impact significantly on taxpayer's with global operations.
Such action would ultimately increase uncertainty, undermine the BEPS Project and result in a lack of taxpayer engagement in the reformative process. The measures proposed in Action 7 for example are selective by design. Countries can choose whether or not to adopt the updated treaty provisions and commentary when ratifying the multilateral instrument MLI. Although this selectivity should not directly result in an increase in disputes, it may do so indirectly by increasing the instances in which treaty relief is claimed by a resident of a treaty country that has not adopted the new lower threshold of taxation provided for under Action 7.
For example, where a country which adopts the Action 7 proposal when ratifying the MLI Country A extends the new understanding of permanent establishment into domestic law.
In such circumstances, non-resident enterprises would exceed the threshold for taxation under domestic law in Country A more frequently which could result in greater reliance on the existing pre-BEPS permanent establishment provisions.
Another possible source of disparity is the domestic application of the updated OECD Transfer Pricing Guidelines contained in the final report on Actions Further even if the case is agreed, the procedure can sometimes take a long time and use a lot of taxpayer and tax administration resources.
Such results are unsatisfactory to all concerned. A number of supplementary techniques are therefore being considered to deal with such situations, ranging from an advisory opinion to a more formal arbitration process. The Working Group is currently analyzing the feasibility of implementing the mandatory resolution of unresolved MAP cases for use only by countries that wished to provide for binding resolution of all cases.
Such a possibility would constitute a mandatory submission but also acceptance in advance of the result. This would involve the development of the text of a new Model Tax Convention Article and attendant Commentary. It should be stressed that the work on supplementary dispute resolution is exploratory in nature — no decision has been reached as to whether such mechanisms should be used.
For further information please contact Paul Mulvihill, e-mail: paul. Since the people would vote for House legislators directly, the federal government, in theory, derived its authority to tax from the sovereignty of the people, not the states.
Taxation and Slavery State-based representational conflicts, however, coexisted with regionally-based conflicts. In fact, the struggle to reconcile the place of slavery in the new republic had more influence on the enumeration of federal tax authority in the Constitution than any other issue. The perplexing approach adopted with respect to direct taxation attested to slavery's impact.
Article I, Section 2 provided that "representatives and direct taxes shall be apportioned among the several States which may be included within this Union, according to their respective numbers, which shall be determined by adding to the whole number of free persons. The delegates sought this compromise, rather, as a means to account for slaves when determining the number of southern congressional representatives.
If bondsmen were considered persons for census purposes, their numbers would entitle slave states to proportional increases in representation. Northern states objected to this southern windfall. They preferred to exclude slaves from the census entirely to prevent slave states from marshaling too much influence in Congress.
In an effort to impose a price on southern intentions, Governeur Morris suggested that taxation be in proportion to representation. The addition of slaves to the census rolls would then cost southerners a larger proportion of the tax burden as well.
Slave owners objected, already suspecting that northerners might seize on federal power to tax slavery out of existence. They established that both representation and direct taxation would be proportional to population, with African-American slaves counting as three-fifths of a person in census tabulations.
This compromise induced southerners to accept fewer representatives than they would have been entitled to had slaves counted fully. In return, any tax on slaves would be assessed as part of a proportional direct tax on other kinds of property in all the states. Northerners, on the other hand, could be satisfied they had reduced the representational influence of slave states, while forcing them to assume a small tax burden, at least, for African bondage.
If not for the question of slavery, the term "direct tax" would not have entered the constitutional lexicon.
0コメント