Global carbon pricing has often been portrayed as an interesting idea that will never be implemented due to political hurdles. Yet, this description is being challenged: growing political support for climate clubs suggests that a global carbon price might become reality in the future. This article investigates the conditions for the adoption and implementation of a climate club based on a global carbon price by comparing it to the international corporate tax club created by Pillar Two, which was also described as politically impossible a few years ago. This comparison highlights that establishing a climate club will require addressing design issues and institutional obstacles that might be even more complex than those that characterized the negotiations of the global anti-base erosion (GloBE) rules. Climate club, carbon border adjustment measures, global carbon price, global carbon tax, GloBE rules, inclusive forum on carbon mitigation approaches, inclusive framework, international corporate tax club, Pillar Two
{"title":"Article: Climate Clubs: An International Tax Law Perspective","authors":"A. Pirlot","doi":"10.54648/taxi2024021","DOIUrl":"https://doi.org/10.54648/taxi2024021","url":null,"abstract":"Global carbon pricing has often been portrayed as an interesting idea that will never be implemented due to political hurdles. Yet, this description is being challenged: growing political support for climate clubs suggests that a global carbon price might become reality in the future. This article investigates the conditions for the adoption and implementation of a climate club based on a global carbon price by comparing it to the international corporate tax club created by Pillar Two, which was also described as politically impossible a few years ago. This comparison highlights that establishing a climate club will require addressing design issues and institutional obstacles that might be even more complex than those that characterized the negotiations of the global anti-base erosion (GloBE) rules.\u0000Climate club, carbon border adjustment measures, global carbon price, global carbon tax, GloBE rules, inclusive forum on carbon mitigation approaches, inclusive framework, international corporate tax club, Pillar Two","PeriodicalId":45365,"journal":{"name":"Intertax","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140464285","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 objective of this article is to evaluate countries’ approaches to the taxation of crypto staking by testing the consistency of current domestic rules and guidance against the technological substance of the same phenomenon. After the outline of the economics of crypto staking, the author provides evidence of the debate in tax literature and the regulatory landscape across selected countries. Subsequently, the research explores the technology features of staking and its fundamental variables of legal characterization, income qualification, and timing and value of income recognition. This way, the interdisciplinary methodology aims to outline a model of taxation reflecting the technological substance of crypto staking and test it against the current tax framework at the domestic level. The results of the analysis process show that the approach to the taxation of staking rewards does not ensure consistency with the technological substance in all of the selected countries. National tax authorities rely more on policy considerations aimed at maximizing revenue collection when developing guidance in the field than on the idea of coherent tax treatment in accordance with the technological substance and the legal characterization of the different types of staking activities. Tax & Technology, Blockchain, Cryptocurrencies, Proof-of-stake, Staking rewards, Direct staking, Indirect staking, Legal characterization, Income qualification, Time of income recognition
{"title":"Article: Crypto Staking Taxation Across Selected Countries: A Critical Evaluation","authors":"Claudio Cipollini","doi":"10.54648/taxi2024019","DOIUrl":"https://doi.org/10.54648/taxi2024019","url":null,"abstract":"The objective of this article is to evaluate countries’ approaches to the taxation of crypto staking by testing the consistency of current domestic rules and guidance against the technological substance of the same phenomenon. After the outline of the economics of crypto staking, the author provides evidence of the debate in tax literature and the regulatory landscape across selected countries. Subsequently, the research explores the technology features of staking and its fundamental variables of legal characterization, income qualification, and timing and value of income recognition. This way, the interdisciplinary methodology aims to outline a model of taxation reflecting the technological substance of crypto staking and test it against the current tax framework at the domestic level. The results of the analysis process show that the approach to the taxation of staking rewards does not ensure consistency with the technological substance in all of the selected countries. National tax authorities rely more on policy considerations aimed at maximizing revenue collection when developing guidance in the field than on the idea of coherent tax treatment in accordance with the technological substance and the legal characterization of the different types of staking activities.\u0000Tax & Technology, Blockchain, Cryptocurrencies, Proof-of-stake, Staking rewards, Direct staking, Indirect staking, Legal characterization, Income qualification, Time of income recognition","PeriodicalId":45365,"journal":{"name":"Intertax","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140467143","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 whether the revisions to the dependent agent permanent establishment (DAPE) provisions in the OECD Model Convention (as a result of BEPS Action 7) provide a framework for solving the problem of artificial avoidance of DAPE status. It argues that the ‘avoidance’ was not so much the use of artificial structures but the lack of guidance over the appropriate interpretational approach to be adopted in applying the provisions. Solving the problem then required redrafting them in order to provide substantial interpretative guidance on adopting a substance-based interpretational approach. An analysis of the redrafted provisions and an examination of the interpretational issues arising from them shows that the larger problem of avoidance of DAPE status is not truly addressed because they continue to privilege legal concepts rather than commercial concepts. The result is that the changes to Article 5(5) do effectively address the specific problem of commissionnaires, but they fail to provide enough guidance to adjudicators to adopt a substance-based approach towards handling newer structures that will undoubtedly be devised by tax advisors. At the same time, the changes to Article 5(6) appear to draw some boundaries on the ability of multinational groups to avoid DAPE status; however, this is again not a solution that appears to be justified in principle. Ultimately, by adopting a patchwork of solutions to tackle specific problems, the BEPS rewrite may perhaps have missed an opportunity to clarify the underlying interpretative approach and cannot be truly said to have solved the problem of artificial avoidance of DAPE status at a more general level. Permanent establishments, dependent agent PEs, BEPS Action 7, independent agents
{"title":"Analysing BEPS Action 7 in the Context of Agency PEs","authors":"Mihir Naniwadekar","doi":"10.54648/taxi2024003","DOIUrl":"https://doi.org/10.54648/taxi2024003","url":null,"abstract":"This article considers whether the revisions to the dependent agent permanent establishment (DAPE) provisions in the OECD Model Convention (as a result of BEPS Action 7) provide a framework for solving the problem of artificial avoidance of DAPE status. It argues that the ‘avoidance’ was not so much the use of artificial structures but the lack of guidance over the appropriate interpretational approach to be adopted in applying the provisions. Solving the problem then required redrafting them in order to provide substantial interpretative guidance on adopting a substance-based interpretational approach. An analysis of the redrafted provisions and an examination of the interpretational issues arising from them shows that the larger problem of avoidance of DAPE status is not truly addressed because they continue to privilege legal concepts rather than commercial concepts. The result is that the changes to Article 5(5) do effectively address the specific problem of commissionnaires, but they fail to provide enough guidance to adjudicators to adopt a substance-based approach towards handling newer structures that will undoubtedly be devised by tax advisors. At the same time, the changes to Article 5(6) appear to draw some boundaries on the ability of multinational groups to avoid DAPE status; however, this is again not a solution that appears to be justified in principle. Ultimately, by adopting a patchwork of solutions to tackle specific problems, the BEPS rewrite may perhaps have missed an opportunity to clarify the underlying interpretative approach and cannot be truly said to have solved the problem of artificial avoidance of DAPE status at a more general level.\u0000Permanent establishments, dependent agent PEs, BEPS Action 7, independent agents","PeriodicalId":45365,"journal":{"name":"Intertax","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140517631","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 examines whether the differences in the calculation of interest on underpaid taxes among EU Member States could conflict with or impact the functioning of the EU internal market. The analysis indicates that such a conflict exists, and that an EU minimum standard protecting taxpayers’ rights is justified to remedy this while harmonizing the rules on interest accrual entirely would likely exceed the limits of the proportionality principle. The article’s starting point is the recent Danish Supreme Court ruling on beneficial ownership which recommends that the Danish legislator review national rules on interest accrual in cases of prolonged tax proceedings and consider a remedy that allows disputed amounts to be deposited with tax authorities. It evaluates the international and EU legal frameworks addressing this issue and compares interest accrual rules between Member States. The article finds that these legal frameworks offer insufficient guidance. It also discusses the Danish Supreme Court’s suggested remedy and asserts that it is ineffective and inefficient. Furthermore, this study demonstrates that it is not suitable as an EU minimum standard, and the latter should instead be designed as a maximum percentage of the disputed amount. This relatively simple approach is a suitable manner for realizing the intended objective as it would incentivize taxpayers to pay their tax bills on time while safeguarding their fundamental human rights wherever they are established in the EU. Moreover, it would prevent placing undue administrative burdens on either taxpayers or tax administrations and would not impede Member States’ abilities to design their tax administrative procedures to fit their national tax systems and practices. Tax surcharges, tax penalties, Interest, EU, Internal Market, taxpayers’ rights
{"title":"The Case for an EU Cap on Interest on Underpaid Tax: Protecting the Internal Market","authors":"Jeroen Lammers","doi":"10.54648/taxi2024002","DOIUrl":"https://doi.org/10.54648/taxi2024002","url":null,"abstract":"This article examines whether the differences in the calculation of interest on underpaid taxes among EU Member States could conflict with or impact the functioning of the EU internal market. The analysis indicates that such a conflict exists, and that an EU minimum standard protecting taxpayers’ rights is justified to remedy this while harmonizing the rules on interest accrual entirely would likely exceed the limits of the proportionality principle. The article’s starting point is the recent Danish Supreme Court ruling on beneficial ownership which recommends that the Danish legislator review national rules on interest accrual in cases of prolonged tax proceedings and consider a remedy that allows disputed amounts to be deposited with tax authorities. It evaluates the international and EU legal frameworks addressing this issue and compares interest accrual rules between Member States. The article finds that these legal frameworks offer insufficient guidance. It also discusses the Danish Supreme Court’s suggested remedy and asserts that it is ineffective and inefficient. Furthermore, this study demonstrates that it is not suitable as an EU minimum standard, and the latter should instead be designed as a maximum percentage of the disputed amount. This relatively simple approach is a suitable manner for realizing the intended objective as it would incentivize taxpayers to pay their tax bills on time while safeguarding their fundamental human rights wherever they are established in the EU. Moreover, it would prevent placing undue administrative burdens on either taxpayers or tax administrations and would not impede Member States’ abilities to design their tax administrative procedures to fit their national tax systems and practices.\u0000Tax surcharges, tax penalties, Interest, EU, Internal Market, taxpayers’ rights","PeriodicalId":45365,"journal":{"name":"Intertax","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140516688","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}
Ricardo André Galendi Júnior, Pedro Guilherme Lindenberg Schoueri
This article revisits the OECD Commentary’s position on the compatibility of CFC rules and tax treaties from a historical perspective. It highlights that the key (technical) argument behind the compatibility endorsed by the Commentary rests on the anti-abuse character of the rule. This backdrop is of relevance for the analysis of rules that purport to have a similar mechanism but that lack the anti-abuse character – including worldwide income taxation rules and the Income Inclusion Rule (IIR) under Pillar 2. The article posits that these situations are beyond the scope of the ‘technical argument’ and, therefore, cannot rely on the OECD Commentary to support their compatibility with tax treaties. Controlled foreign corporation rules, tax treaties, income inclusion rule, worldwide taxation
{"title":"Tax In History: CFCs and Tax Treaties: Historical Elements for the IIR Debate","authors":"Ricardo André Galendi Júnior, Pedro Guilherme Lindenberg Schoueri","doi":"10.54648/taxi2024007","DOIUrl":"https://doi.org/10.54648/taxi2024007","url":null,"abstract":"This article revisits the OECD Commentary’s position on the compatibility of CFC rules and tax treaties from a historical perspective. It highlights that the key (technical) argument behind the compatibility endorsed by the Commentary rests on the anti-abuse character of the rule. This backdrop is of relevance for the analysis of rules that purport to have a similar mechanism but that lack the anti-abuse character – including worldwide income taxation rules and the Income Inclusion Rule (IIR) under Pillar 2. The article posits that these situations are beyond the scope of the ‘technical argument’ and, therefore, cannot rely on the OECD Commentary to support their compatibility with tax treaties.\u0000Controlled foreign corporation rules, tax treaties, income inclusion rule, worldwide taxation","PeriodicalId":45365,"journal":{"name":"Intertax","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140519054","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":"Editorial: Chatgpt For Writing And Teaching About Tax","authors":"A. Pirlot","doi":"10.54648/taxi2024009","DOIUrl":"https://doi.org/10.54648/taxi2024009","url":null,"abstract":"","PeriodicalId":45365,"journal":{"name":"Intertax","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140526420","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}
Art, like much of what surrounds us, is also evolving due to digitalization processes. The authors analyse some of the most relevant aspects of the VAT treatment of certain crypto art models and propose a legal analysis that has both important practical and theoretical implications. In addition to this, they also propose some tax policy assessments and stimulate a debate that proceeds beyond merely tax issues and discusses a number of constitutional values such as whether digital art can be considered ‘art’ and thus protected accordingly. VAT, Crypto art, smart contract, metaverse, reduced rates, constitutional values, place of supply
{"title":"The Vat Treatment of Crypto Art: Between NFTs, Smart Contracts and the Metaverse: How a Bundle of New Concepts Can Fit into the Existing Categories","authors":"Francesco Cannas, Rossella Spada","doi":"10.54648/taxi2024006","DOIUrl":"https://doi.org/10.54648/taxi2024006","url":null,"abstract":"Art, like much of what surrounds us, is also evolving due to digitalization processes. The authors analyse some of the most relevant aspects of the VAT treatment of certain crypto art models and propose a legal analysis that has both important practical and theoretical implications. In addition to this, they also propose some tax policy assessments and stimulate a debate that proceeds beyond merely tax issues and discusses a number of constitutional values such as whether digital art can be considered ‘art’ and thus protected accordingly.\u0000VAT, Crypto art, smart contract, metaverse, reduced rates, constitutional values, place of supply","PeriodicalId":45365,"journal":{"name":"Intertax","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140518211","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 uses the rule-standard spectrum theory to analyse the puzzle of why taxpayers may have the impression that China’s covered tax agreements (CTAs) seem unchanged after theMultilateral Instrument (MLI) despite the country having devoted enormous efforts to implementing it. This study finds that most of the changes in China’s CTAs through the MLI are standard-based provisions while it is willing to unilaterally and bilaterally embrace certain rule-based MLI provisions. The characteristics of China’s model in adopting the MLI, the possible reasons behind the model, and the implications for taxpayers are further explored. MLI, China’s CTAs, standard-based changes, rule-based changes, administrative-led legislative model, multi-dimensional tax policies, compliance cost, certainty and uncertainty, cooperation
{"title":"The Puzzle: China’s Covered Tax Agreements Seem Unchanged after the MLI from Taxpayers’ Perspective?","authors":"Yansheng Zhu, Zining Tao","doi":"10.54648/taxi2024005","DOIUrl":"https://doi.org/10.54648/taxi2024005","url":null,"abstract":"This article uses the rule-standard spectrum theory to analyse the puzzle of why taxpayers may have the impression that China’s covered tax agreements (CTAs) seem unchanged after theMultilateral Instrument (MLI) despite the country having devoted enormous efforts to implementing it. This study finds that most of the changes in China’s CTAs through the MLI are standard-based provisions while it is willing to unilaterally and bilaterally embrace certain rule-based MLI provisions. The characteristics of China’s model in adopting the MLI, the possible reasons behind the model, and the implications for taxpayers are further explored.\u0000MLI, China’s CTAs, standard-based changes, rule-based changes, administrative-led legislative model, multi-dimensional tax policies, compliance cost, certainty and uncertainty, cooperation","PeriodicalId":45365,"journal":{"name":"Intertax","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140519911","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}
As technology advances, human physical presence can be easily ‘replicated’. For example, a politician can give a speech abroad via hologram technology. Is he also taxed abroad? This article explores the impact of hologram technology on tax treaties and shows that amendments are due. Accordingly, the author proposes a new rule for the taxation of individual services offered via technological means that replicate or replace human physical presence. Holograms, robotics, human physical presence, POEM, PE, monetary threshold, source taxation, withholding tax, services taxation, artist taxation
{"title":"International Taxation of Holograms and Human Physical Presence in Tax Treaties","authors":"Savvas Kostikidis","doi":"10.54648/taxi2024004","DOIUrl":"https://doi.org/10.54648/taxi2024004","url":null,"abstract":"As technology advances, human physical presence can be easily ‘replicated’. For example, a politician can give a speech abroad via hologram technology. Is he also taxed abroad? This article explores the impact of hologram technology on tax treaties and shows that amendments are due. Accordingly, the author proposes a new rule for the taxation of individual services offered via technological means that replicate or replace human physical presence.\u0000Holograms, robotics, human physical presence, POEM, PE, monetary threshold, source taxation, withholding tax, services taxation, artist taxation","PeriodicalId":45365,"journal":{"name":"Intertax","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140517910","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":"Guest Editorial Note: The First US Tax Treaty and Its Influence","authors":"R. Avi-Yonah","doi":"10.54648/taxi2024001","DOIUrl":"https://doi.org/10.54648/taxi2024001","url":null,"abstract":"","PeriodicalId":45365,"journal":{"name":"Intertax","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140523788","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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