On 22 February 2022, the Mauritian Ministry of Financial Services and Good Governance issued a communique reporting the country’s removal from the European Union (‘EU’) List of High-Risk Third Countries. This list is also called the Anti-money Laundering and Countering Terrorist Financing List (‘AML/CTF’); or, less affectionately, the Blacklist. Mauritius issued this report a month after the European Union released its Commission Delegated Regulation (EU) 2022/229, removing Botswana and Mauritius from the AML/CTF. The EU placed Mauritius and Botswana on the Blacklist in May 2020 after adopting updated criteria for assessing high-risk third countries and publishing its revised methodology for identifying these high-risk jurisdictions. These updated criteria and procedures relegated the tax regimes of Mauritius and Botswana as strategically ‘[deficient] on anti-money laundering and counter-terrorist financing…,’ such that they ‘pose significant threats to the financial system of the Union.’ Placement on the Blacklist encumbers States with increased monitoring, regulatory requirements, and global trade restrictions that can result in a heavy economic toll. Moreover, to exit the list, countries must remediate deficiencies in cooperation with the EU and Financial Action Task Force (‘FATF’), each of which must be satisfied with the improvements made. Mauritius and Botswana passed a bevy of substantial laws in just over a year to satisfy the EU and FATF, earning an exit from the Blacklist. Among the many changes, enhancements to each country’s transparency measures were central. Adopting new approaches to beneficial ownership and residence in each country is at the core of this transparency. This work will explore how Mauritius and Botswana leveraged new approaches to beneficial ownership and residence to meet EU standards for tax regime transparency, resulting in each country’s removal from the EU Blacklist. This analysis will begin with an economic overview of Mauritius and Botswana. What follows will be an introduction to the EU AML/CTF list, followed by how and why the EU placed Mauritius and Botswana on the list. Finally, this work will look at how Mauritius and Botswana exited the list, and what that exit means for each country and other countries like them.
{"title":"How Botswana and Mauritius Exited the EU High-Risk Third Country List by Adapting Their Approaches to Beneficial Ownership and Residence","authors":"Daniel Walker","doi":"10.53300/001c.120759","DOIUrl":"https://doi.org/10.53300/001c.120759","url":null,"abstract":"On 22 February 2022, the Mauritian Ministry of Financial Services and Good Governance issued a communique reporting the country’s removal from the European Union (‘EU’) List of High-Risk Third Countries. This list is also called the Anti-money Laundering and Countering Terrorist Financing List (‘AML/CTF’); or, less affectionately, the Blacklist. Mauritius issued this report a month after the European Union released its Commission Delegated Regulation (EU) 2022/229, removing Botswana and Mauritius from the AML/CTF. The EU placed Mauritius and Botswana on the Blacklist in May 2020 after adopting updated criteria for assessing high-risk third countries and publishing its revised methodology for identifying these high-risk jurisdictions. These updated criteria and procedures relegated the tax regimes of Mauritius and Botswana as strategically ‘[deficient] on anti-money laundering and counter-terrorist financing…,’ such that they ‘pose significant threats to the financial system of the Union.’ Placement on the Blacklist encumbers States with increased monitoring, regulatory requirements, and global trade restrictions that can result in a heavy economic toll. Moreover, to exit the list, countries must remediate deficiencies in cooperation with the EU and Financial Action Task Force (‘FATF’), each of which must be satisfied with the improvements made. Mauritius and Botswana passed a bevy of substantial laws in just over a year to satisfy the EU and FATF, earning an exit from the Blacklist. Among the many changes, enhancements to each country’s transparency measures were central. Adopting new approaches to beneficial ownership and residence in each country is at the core of this transparency. This work will explore how Mauritius and Botswana leveraged new approaches to beneficial ownership and residence to meet EU standards for tax regime transparency, resulting in each country’s removal from the EU Blacklist. This analysis will begin with an economic overview of Mauritius and Botswana. What follows will be an introduction to the EU AML/CTF list, followed by how and why the EU placed Mauritius and Botswana on the list. Finally, this work will look at how Mauritius and Botswana exited the list, and what that exit means for each country and other countries like them.","PeriodicalId":306257,"journal":{"name":"Revenue Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141668445","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article considers the tax treatment of dividends paid by Australian companies to non-resident shareholders, which benefit from a withholding tax exemption to the extent that the dividend is “franked” under Australia’s imputation system. The article considers the appropriateness of maintaining the withholding tax exemption now that more than 35 years have passed since the imputation system was introduced in Australia in 1987. It examines the original rationale for introducing the exemption and questions whether that rationale remains valid in 2023, given changes to corporate and individual tax rates in the intervening periods. The article also notes that to a potentially significant extent, the ongoing availability of this concession benefits foreign revenue authorities where non-resident shareholders live in countries which maintain a “classical” approach to taxation of dividends and allow credits for foreign withholding tax to be offset against tax liabilities in the country of residence. The article concludes that a comprehensive policy-based review of the concession is long overdue, that removal or modification of the exemption should be considered, and that the potential additional Australian tax revenue resulting from changes to the concession could be significant.
{"title":"A Curious Concession? Australia’s Withholding Tax Exemption for Franked Dividends","authors":"James McMillan","doi":"10.53300/001c.116168","DOIUrl":"https://doi.org/10.53300/001c.116168","url":null,"abstract":"This article considers the tax treatment of dividends paid by Australian companies to non-resident shareholders, which benefit from a withholding tax exemption to the extent that the dividend is “franked” under Australia’s imputation system. The article considers the appropriateness of maintaining the withholding tax exemption now that more than 35 years have passed since the imputation system was introduced in Australia in 1987. It examines the original rationale for introducing the exemption and questions whether that rationale remains valid in 2023, given changes to corporate and individual tax rates in the intervening periods. The article also notes that to a potentially significant extent, the ongoing availability of this concession benefits foreign revenue authorities where non-resident shareholders live in countries which maintain a “classical” approach to taxation of dividends and allow credits for foreign withholding tax to be offset against tax liabilities in the country of residence. The article concludes that a comprehensive policy-based review of the concession is long overdue, that removal or modification of the exemption should be considered, and that the potential additional Australian tax revenue resulting from changes to the concession could be significant.","PeriodicalId":306257,"journal":{"name":"Revenue Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-04-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140743345","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Glencore Investment Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia (2019) 272 FCR 30 has dominated the Australian transfer pricing landscape for the past two years, with international tax specialists awaiting the outcome with great anticipation. The decision in the Federal Court of Australia and its subsequent appeal to the Full Federal Court and the High Court are of great importance to Australian transfer pricing due to its direct implications on the Australian Commissioner of Taxation’s powers of reconstruction. While dealing with older statutory legislation, the insights of the court and the methods utilised to come to a decision have the potential to provide a strong interpretative precedent in future transfer pricing disputes. It is the opinion of the author that the outcome in Glencore will affect the current transfer pricing regime despite the gradual strengthening of the Commissioner of Taxation’s powers under the new legislation. This article revisits the decision in Glencore and aims to provide a frame of reference for the use of members of the tax community and other individuals interested in understanding the context of the appeal and the implications this will have for Australian transfer pricing.
{"title":"Australian Transfer-Pricing in the Aftermath of Glencore Investment Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia (2019)","authors":"Christian N Borg","doi":"10.53300/001c.33618","DOIUrl":"https://doi.org/10.53300/001c.33618","url":null,"abstract":"Glencore Investment Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia (2019) 272 FCR 30 has dominated the Australian transfer pricing landscape for the past two years, with international tax specialists awaiting the outcome with great anticipation. The decision in the Federal Court of Australia and its subsequent appeal to the Full Federal Court and the High Court are of great importance to Australian transfer pricing due to its direct implications on the Australian Commissioner of Taxation’s powers of reconstruction. While dealing with older statutory legislation, the insights of the court and the methods utilised to come to a decision have the potential to provide a strong interpretative precedent in future transfer pricing disputes. It is the opinion of the author that the outcome in Glencore will affect the current transfer pricing regime despite the gradual strengthening of the Commissioner of Taxation’s powers under the new legislation. This article revisits the decision in Glencore and aims to provide a frame of reference for the use of members of the tax community and other individuals interested in understanding the context of the appeal and the implications this will have for Australian transfer pricing.","PeriodicalId":306257,"journal":{"name":"Revenue Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-06-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125060935","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"A Review of How America was Tricked on Tax Policy: Secrets and Undisclosed Practices by Bret N. Bogenschneider","authors":"M. Pankiv","doi":"10.53300/001c.32534","DOIUrl":"https://doi.org/10.53300/001c.32534","url":null,"abstract":"","PeriodicalId":306257,"journal":{"name":"Revenue Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133325041","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Tax policy advocates have long suggested an optimal tax system would be the most efficient tax regime but until recently it has been unobtainable. Technological developments increase the feasibility of this tax. The first half of this article explains how Australian tax policy has developed to date by looking at government commissioned and sanctioned reviews of the tax system. What becomes apparent is that reform measures aimed at achieving the tax policy goals of efficiency, equity and simplicity often involve a lowering of tax rates and a comprehensive tax base system. The second half then explores the changes that have made the prospects of an optimal tax system more feasible and explores how evolving policy advice has moved in the direction of optimal tax theory. It is argued that this may involve proposals for reform centered on a less comprehensive tax base, increased tax rates as well as other departures from the traditional tax reform discussion
{"title":"Australia’s Tax Law Policy of the Past and that of the Post Digital Revolution","authors":"S. Villios, Michael Blissenden, Paul Kenny","doi":"10.53300/001c.21428","DOIUrl":"https://doi.org/10.53300/001c.21428","url":null,"abstract":"Tax policy advocates have long suggested an optimal tax system would be the most efficient tax regime but until recently it has been unobtainable. Technological developments increase the feasibility of this tax. The first half of this article explains how Australian tax policy has developed to date by looking at government commissioned and sanctioned reviews of the tax system. What becomes apparent is that reform measures aimed at achieving the tax policy goals of efficiency, equity and simplicity often involve a lowering of tax rates and a comprehensive tax base system.\u0000\u0000The second half then explores the changes that have made the prospects of an optimal tax system more feasible and explores how evolving policy advice has moved in the direction of optimal tax theory. It is argued that this may involve proposals for reform centered on a less comprehensive tax base, increased tax rates as well as other departures from the traditional tax reform discussion","PeriodicalId":306257,"journal":{"name":"Revenue Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-03-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128939360","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The tax landscape is noticeably developing across Middle Eastern countries as traditional sources of state revenues are declining. Sovereign nations in the region are also being subject to mounting global pressure by organisations like the OECD to implement mechanisms for preventing base erosion and profit shifting. The Kingdom of Saudi Arabia recently introduced transfer pricing legislation after an initial draft was circulated to the public for feedback. This paper explores the Transfer Pricing Bylaws issued by the local revenue authority and the increased burden that businesses operating in the region will have to bear given the current cultural norms and business practices.
{"title":"An Outlook on the Implementation of Transfer Pricing Legislation in the Kingdom of Saudi Arabia","authors":"A. Hani","doi":"10.53300/001c.14564","DOIUrl":"https://doi.org/10.53300/001c.14564","url":null,"abstract":"The tax landscape is noticeably developing across Middle Eastern countries as traditional sources of state revenues are declining. Sovereign nations in the region are also being subject to mounting global pressure by organisations like the OECD to implement mechanisms for preventing base erosion and profit shifting. The Kingdom of Saudi Arabia recently introduced transfer pricing legislation after an initial draft was circulated to the public for feedback. This paper explores the Transfer Pricing Bylaws issued by the local revenue authority and the increased burden that businesses operating in the region will have to bear given the current cultural norms and business practices.","PeriodicalId":306257,"journal":{"name":"Revenue Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-08-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114004607","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article will discuss the judgment of the recent Australian tax case of Commissioner of Taxation v BHP Billiton Limited (‘BHP’). Specifically, it will discuss how the case affects the meaning of the word ‘associate’ and the phrase ‘sufficiently influenced.’ It will do this by recapping the original Administrative Appeals Tribunal (‘AAT’) case of MWYS v Commissioner of Taxation which formed the basis of the appeal in BHP. It will then discuss the majority and dissenting judgements in the BHP case and how they both interpreted the meaning of ‘associate’ and ‘sufficiently influenced,’ before reconciling the ideas from both judgments, and the original AAT judgement. This paper will then aim to highlight the precedential value of BHP and how BHP may affect other areas of Australian Taxation Law, namely the Controlled Foreign Corporation rules, Thin Capitalisation Rules, and the R&D grant rules.
{"title":"The Meaning of ‘Associate’: An Analysis of the Outcomes of Commissioner of Taxation v BHP Billiton (2019)","authors":"Dylan Mudhar","doi":"10.53300/001c.12179","DOIUrl":"https://doi.org/10.53300/001c.12179","url":null,"abstract":"This article will discuss the judgment of the recent Australian tax case of Commissioner of Taxation v BHP Billiton Limited (‘BHP’). Specifically, it will discuss how the case affects the meaning of the word ‘associate’ and the phrase ‘sufficiently influenced.’ It will do this by recapping the original Administrative Appeals Tribunal (‘AAT’) case of MWYS v Commissioner of Taxation which formed the basis of the appeal in BHP. It will then discuss the majority and dissenting judgements in the BHP case and how they both interpreted the meaning of ‘associate’ and ‘sufficiently influenced,’ before reconciling the ideas from both judgments, and the original AAT judgement. This paper will then aim to highlight the precedential value of BHP and how BHP may affect other areas of Australian Taxation Law, namely the Controlled Foreign Corporation rules, Thin Capitalisation Rules, and the R&D grant rules.","PeriodicalId":306257,"journal":{"name":"Revenue Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-03-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126725738","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper will discuss the Permanent Establishment (‘PE’) provisions of the recently signed Multilateral Instrument (‘MLI’). Specifically, it will examine the MLI’s adoption of the Organisation of Economic Co-Operation and Development (‘OECD’) 2015 Action 7 Final Report on Preventing the Artificial Avoidance of PE Status into Articles 12-15. It will then proceed to evaluate the potential effectiveness of these Articles in the MLI in light of the reservations made by Australia and the UK and the unilateral measures enacted by the two countries to combat Base Erosion and Profit Shifting (‘BEPS’). By examining the unilateral approach of both nations, this paper aims to highlight that multilateral solutions are essential to achieve global coherence and restore confidence in the international tax system.
{"title":"The Multilateral Instrument: Avoidance of Permanent Establishment Status and the Reservations on behalf of Australia and the UK","authors":"M. Ivanova","doi":"10.53300/001c.6795","DOIUrl":"https://doi.org/10.53300/001c.6795","url":null,"abstract":"This paper will discuss the Permanent Establishment (‘PE’) provisions of the recently signed Multilateral Instrument (‘MLI’). Specifically, it will examine the MLI’s adoption of the Organisation of Economic Co-Operation and Development (‘OECD’) 2015 Action 7 Final Report on Preventing the Artificial Avoidance of PE Status into Articles 12-15. It will then proceed to evaluate the potential effectiveness of these Articles in the MLI in light of the reservations made by Australia and the UK and the unilateral measures enacted by the two countries to combat Base Erosion and Profit Shifting (‘BEPS’). By examining the unilateral approach of both nations, this paper aims to highlight that multilateral solutions are essential to achieve global coherence and restore confidence in the international tax system.","PeriodicalId":306257,"journal":{"name":"Revenue Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-12-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122722476","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Historically, the Courts have not enforced the revenue laws of foreign governments. However, there have been developments internationally through the OECD to reverse that historic limitation on the collection of foreign country taxes. As a result of these changes Australia has adopted, in its bi-lateral tax treaties (DTAs) since 2005, a mutual assistance in tax debt collections article. These DTA changes have been reinforced with changes to Australia’s domestic law. This article explores the extent to which the historical position has been altered.
{"title":"Being Caught Up By The Past: The Enforcement Of Foreign Revenue Debts","authors":"Michael Dirkis","doi":"10.53300/001C.6709","DOIUrl":"https://doi.org/10.53300/001C.6709","url":null,"abstract":"Historically, the Courts have not enforced the revenue laws of foreign governments. However, there have been developments internationally through the OECD to reverse that historic limitation on the collection of foreign country taxes. As a result of these changes Australia has adopted, in its bi-lateral tax treaties (DTAs) since 2005, a mutual assistance in tax debt collections article. These DTA changes have been reinforced with changes to Australia’s domestic law. This article explores the extent to which the historical position has been altered.","PeriodicalId":306257,"journal":{"name":"Revenue Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131681012","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
[Extract]The effectiveness of privative clauses have bedevilled the common law ever since the Year Books. In recent times, it has been generally accepted that whenever Parliament creates an inferior tribunal, the courts retain an inherent right to supervise and control it, and any person aggrieved by a decision of the tribunal has a right to ask the court to exercise those powers. This article examines whether it is beyond the capacity of the Parliament – both State and Commonwealth – to confer upon an administrative tribunal the power to make authoritative and conclusive decisions as to the limits of its own jurisdiction.
{"title":"Privative Clauses! The Last Hurrah?","authors":"P. Gerber","doi":"10.53300/001C.6665","DOIUrl":"https://doi.org/10.53300/001C.6665","url":null,"abstract":"[Extract]The effectiveness of privative clauses have bedevilled the common law ever since the Year Books. In recent times, it has been generally accepted that whenever Parliament creates an inferior tribunal, the courts retain an inherent right to supervise and control it, and any person aggrieved by a decision of the tribunal has a right to ask the court to exercise those powers. This article examines whether it is beyond the capacity of the Parliament – both State and Commonwealth – to confer upon an administrative tribunal the power to make authoritative and conclusive decisions as to the limits of its own jurisdiction.","PeriodicalId":306257,"journal":{"name":"Revenue Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114315292","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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