This year marks the ninetieth anniversary of Principî di scienza della finanza by Luigi Einaudi. This work is one among many by this prominent Italian fiscal polymath, yet it is especially illustrative of many of his more remarkable contributions to the public finance and tax law discourse. As such, it can be considered an important chapter in Einaudi’s work if not a milestone. In this respect, the book offers the opportunity to revisit some of his most well-known and influential contributions along with a reconsideration of certain idées reçues that appear to surround his legacy. In either direction along these reading itineraries, it is impressive how many of the propositions emerging from the pages of the Principî appear to be topical and, in some way, refreshing in connection with much of the ongoing (international) tax policy debate. Einaudi actually had a penchant for debunking myths and illusions, an exercise which has not lost its topicality and relevance. Luigi Einaudi, History of Economic Thought, Public Finance, Optimal Theory of Taxation, Capital Taxation, Tax Amortization, International Double Taxation, Exchange of Information
{"title":"Tax In History: Some Notes on Luigi Einaudi and the Legacy of His ‘Principles of Public Finance’. A Fiscal Mythoclast in Retrospect","authors":"A. Turina","doi":"10.54648/taxi2022088","DOIUrl":"https://doi.org/10.54648/taxi2022088","url":null,"abstract":"This year marks the ninetieth anniversary of Principî di scienza della finanza by Luigi Einaudi. This work is one among many by this prominent Italian fiscal polymath, yet it is especially illustrative of many of his more remarkable contributions to the public finance and tax law discourse. As such, it can be considered an important chapter in Einaudi’s work if not a milestone. In this respect, the book offers the opportunity to revisit some of his most well-known and influential contributions along with a reconsideration of certain idées reçues that appear to surround his legacy. In either direction along these reading itineraries, it is impressive how many of the propositions emerging from the pages of the Principî appear to be topical and, in some way, refreshing in connection with much of the ongoing (international) tax policy debate. Einaudi actually had a penchant for debunking myths and illusions, an exercise which has not lost its topicality and relevance.\u0000Luigi Einaudi, History of Economic Thought, Public Finance, Optimal Theory of Taxation, Capital Taxation, Tax Amortization, International Double Taxation, Exchange of Information","PeriodicalId":45365,"journal":{"name":"Intertax","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44206097","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 discusses potential jurisdictional conflicts between the Pillar 2 rules and international customary law, taking into account potential frictions with tax treaty law and European Union law. In addition, the authors assess whether the Pillar 2 rules can be justified in the same way as controlled foreign company (CFC) rules, thereby referring to the principle of personality. Part three of the article evaluates how conflicts between the Pillar 2 rules and international law are to be resolved. The authors conclude by providing potential solutions to resolve jurisdictional conflicts. Pillar 2, IIR, UTPR, international customary law, EU law, tax treaties, jurisdiction, nexus, VCLT
{"title":"Article: Pillar 2: An Analysis of the IIR and UTPR from an International Customary Law, Tax Treaty Law and European Union Law Perspective","authors":"Filip Debelva, L. de Broe","doi":"10.54648/taxi2022098","DOIUrl":"https://doi.org/10.54648/taxi2022098","url":null,"abstract":"This article discusses potential jurisdictional conflicts between the Pillar 2 rules and international customary law, taking into account potential frictions with tax treaty law and European Union law. In addition, the authors assess whether the Pillar 2 rules can be justified in the same way as controlled foreign company (CFC) rules, thereby referring to the principle of personality. Part three of the article evaluates how conflicts between the Pillar 2 rules and international law are to be resolved. The authors conclude by providing potential solutions to resolve jurisdictional conflicts.\u0000Pillar 2, IIR, UTPR, international customary law, EU law, tax treaties, jurisdiction, nexus, VCLT","PeriodicalId":45365,"journal":{"name":"Intertax","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41796792","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}
Currently, blockchain is one of the most innovative emerging digital technologies. As such, it can undermine traditional business models and revolutionize tax administration. This objective of this article is to present the potential of blockchain technology in the administration of specific tax categories such as payroll taxes, value added tax, international taxes, and customs. It also analyses blockchain technology’s strengths, weaknesses, opportunities, and threats (SWOT) with a focus on tax administration. As a generator of a substantial amount of information, tax administration requires reliable and efficient technology for processing and storing the information that is generated. The results of the analysis showed strengths such as a lower cost of fulfilling tax liabilities, a direct connection with taxpayers without the need of third parties. a higher degree of efficiency, and threats such as insufficient funds for modernization, knowledge and skills of employees, and willingness to adapt and high investment costs related to implementation. Moreover, it will modernize accounting and tax payments. Blockchain technology, digitalization, tax administration, SWOT analysis, digital economy, digital services, tax policy
{"title":"Policy Note: Blockchain Technology: Potential for Digital Tax Administration","authors":"J. Owens, S. Hodžić","doi":"10.54648/taxi2022087","DOIUrl":"https://doi.org/10.54648/taxi2022087","url":null,"abstract":"Currently, blockchain is one of the most innovative emerging digital technologies. As such, it can undermine traditional business models and revolutionize tax administration. This objective of this article is to present the potential of blockchain technology in the administration of specific tax categories such as payroll taxes, value added tax, international taxes, and customs. It also analyses blockchain technology’s strengths, weaknesses, opportunities, and threats (SWOT) with a focus on tax administration. As a generator of a substantial amount of information, tax administration requires reliable and efficient technology for processing and storing the information that is generated. The results of the analysis showed strengths such as a lower cost of fulfilling tax liabilities, a direct connection with taxpayers without the need of third parties. a higher degree of efficiency, and threats such as insufficient funds for modernization, knowledge and skills of employees, and willingness to adapt and high investment costs related to implementation. Moreover, it will modernize accounting and tax payments.\u0000Blockchain technology, digitalization, tax administration, SWOT analysis, digital economy, digital services, tax policy","PeriodicalId":45365,"journal":{"name":"Intertax","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44241585","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: Time for a Rethink?","authors":"Stef van Weeghel","doi":"10.54648/taxi2022090","DOIUrl":"https://doi.org/10.54648/taxi2022090","url":null,"abstract":"","PeriodicalId":45365,"journal":{"name":"Intertax","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48141845","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 studies foreseeable effects that a relatively comprehensive implementation of the Pillar 2 GloBE international effective minimum tax would have on international tax competition for investment. The discussion focuses on the perspective of countries that seek to attract foreign direct investment through their tax system. The paper shows that there was disagreement within the G20/OECD Inclusive Framework (IF) about the objective to curb international tax competition through a minimum tax. The reservations of some member countries have manifested themselves in the compromise design of the internationally agreed GloBE regime: With the carve-out for substance-based routine profits (the so-called SBIE), the IF abandoned the idea of setting a general floor for business tax competition at the agreed minimum rate. Instead, the SBIE establishes an effective 15 % floor only for the taxation of excess profits. Due to the additional possibility for source countries to collect any eventual minimum tax themselves through a qualified domestic minimum top-up tax (QDMTT), tax competition could theoretically continue unabated above this floor, implying the successive substitution of traditional business taxation with a domestic minimum tax mimicking the international GloBE top-up tax. Taking into account fiscal, legal, and political constraints, however, such an extreme scenario is unlikely to materialize. A broad GloBE implementation should therefore reduce incentives to use effective tax rate below 15 % (on overall profit) in order to attract high-margin investment. This notwithstanding, certain features of the GloBE Model Rules imply that some forms of business tax competition will continue as before or even gain in relative attractiveness. Due to its – albeit moderate – mitigating effects on business tax competition, GloBE might moreover lead to intensified competition for investment through other channels. GloBE, minimum tax, Pillar 2, competition.
{"title":"Article: GloBE Rules and Tax Competition","authors":"J. Englisch","doi":"10.54648/taxi2022086","DOIUrl":"https://doi.org/10.54648/taxi2022086","url":null,"abstract":"This article studies foreseeable effects that a relatively comprehensive implementation of the Pillar 2 GloBE international effective minimum tax would have on international tax competition for investment. The discussion focuses on the perspective of countries that seek to attract foreign direct investment through their tax system. The paper shows that there was disagreement within the G20/OECD Inclusive Framework (IF) about the objective to curb international tax competition through a minimum tax. The reservations of some member countries have manifested themselves in the compromise design of the internationally agreed GloBE regime: With the carve-out for substance-based routine profits (the so-called SBIE), the IF abandoned the idea of setting a general floor for business tax competition at the agreed minimum rate. Instead, the SBIE establishes an effective 15 % floor only for the taxation of excess profits. Due to the additional possibility for source countries to collect any eventual minimum tax themselves through a qualified domestic minimum top-up tax (QDMTT), tax competition could theoretically continue unabated above this floor, implying the successive substitution of traditional business taxation with a domestic minimum tax mimicking the international GloBE top-up tax. Taking into account fiscal, legal, and political constraints, however, such an extreme scenario is unlikely to materialize. A broad GloBE implementation should therefore reduce incentives to use effective tax rate below 15 % (on overall profit) in order to attract high-margin investment. This notwithstanding, certain features of the GloBE Model Rules imply that some forms of business tax competition will continue as before or even gain in relative attractiveness. Due to its – albeit moderate – mitigating effects on business tax competition, GloBE might moreover lead to intensified competition for investment through other channels.\u0000GloBE, minimum tax, Pillar 2, competition.","PeriodicalId":45365,"journal":{"name":"Intertax","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42621060","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":"Literature Review: Constitutional Competence and the Taxation of Cross-Border Transactions Between Related Parties, Clara Gomes Moreira. IBDT. 2021","authors":"Ramon Tomazela","doi":"10.54648/taxi2022092","DOIUrl":"https://doi.org/10.54648/taxi2022092","url":null,"abstract":"","PeriodicalId":45365,"journal":{"name":"Intertax","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48626998","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}
Member States engage in tax competition to expand their tax bases thereby risking a ‘race to the bottom’ in corporate tax revenues. The global minimum tax under Pillar Two is expected to contribute significantly to curbing this practice. Assuming that minimum taxation eliminates competition in statutory tax rates, tax competition is likely to continue. This is because countries then lower their effective tax rates by reducing tax enforcement. As audit strategies, unlike statutory tax rates, are not publicly observable, other countries cannot easily observe and can never verify them. However, countries reducing their tax enforcement adhere to a policy that implicitly encourages tax evasion. Hence, enforcement and observability problems can also be addressed indirectly by targeting their outcome – tax evasion. In most Member States, tax evasion is a predicate offence for money laundering that effectuates a very effective EU anti-money laundering (AML) regime. Its instruments cannot only serve as a tool to adequately address foreign tax evasion but also to reveal, monitor, and control, at least indirectly, other Member States’ efforts in the fight against tax evasion. AML legislation can therefore help to close a still unnoticed loophole in curbing tax competition that will not be addressed by introducing minimum taxation. Tax competition, money laundering, tax evasion, tax avoidance, tax enforcement, predicate offence, dual criminality, FATF, AMLA
{"title":"Article: Tax Competition and the EU Anti-money Laundering Regime","authors":"P. Denk","doi":"10.54648/taxi2022085","DOIUrl":"https://doi.org/10.54648/taxi2022085","url":null,"abstract":"Member States engage in tax competition to expand their tax bases thereby risking a ‘race to the bottom’ in corporate tax revenues. The global minimum tax under Pillar Two is expected to contribute significantly to curbing this practice. Assuming that minimum taxation eliminates competition in statutory tax rates, tax competition is likely to continue. This is because countries then lower their effective tax rates by reducing tax enforcement. As audit strategies, unlike statutory tax rates, are not publicly observable, other countries cannot easily observe and can never verify them. However, countries reducing their tax enforcement adhere to a policy that implicitly encourages tax evasion. Hence, enforcement and observability problems can also be addressed indirectly by targeting their outcome – tax evasion. In most Member States, tax evasion is a predicate offence for money laundering that effectuates a very effective EU anti-money laundering (AML) regime. Its instruments cannot only serve as a tool to adequately address foreign tax evasion but also to reveal, monitor, and control, at least indirectly, other Member States’ efforts in the fight against tax evasion. AML legislation can therefore help to close a still unnoticed loophole in curbing tax competition that will not be addressed by introducing minimum taxation.\u0000Tax competition, money laundering, tax evasion, tax avoidance, tax enforcement, predicate offence, dual criminality, FATF, AMLA","PeriodicalId":45365,"journal":{"name":"Intertax","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42486366","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}
After amending the Income Tax Act (IT Act) in 2012 to impose taxes retroactively on indirect transfers involving non-residents, India recently nullified this law. Towards the end of 2020, two investor-state dispute settlement (ISDS) tribunals under the India-Netherlands and India- United Kingdom bilateral investment treaties (BITs) found India’s retroactive tax in breach of India’s BIT obligations. These arbitral defeats incited India to eliminate the infamous 2012 retroactive amendment to the tax laws. This article documents and analyses the sordid saga of nine long years by explaining the origin, evolution, and culmination of India’s retroactive tax misadventure. Considering the increasing number of instances for which foreign investors use the ISDS mechanism to challenge the host state’s sovereign taxation measures as BIT breaches, the ISDS rulings against India, especially by the tribunal in Cairn Energy v. India, assumes significance. A more comprehensive reading of the tribunal’s reasoning in Cairn Energy v. India elucidates that, while taxation measures are indeed an integral part of the state’s sovereign right to regulate, it has to be exercised reasonably and proportionately when furthering a public purpose. The exploitation of the power to tax disproportionately may prove to be detrimental to the state. India, retroactive tax, ISDS, BIT, Vodafone, Cairn
{"title":"Country Note: Retroactive Taxation, Investor-State Dispute Settlement, and India: Life Comes a Full Circle","authors":"Prabhash Ranjan","doi":"10.54648/taxi2022089","DOIUrl":"https://doi.org/10.54648/taxi2022089","url":null,"abstract":"After amending the Income Tax Act (IT Act) in 2012 to impose taxes retroactively on indirect transfers involving non-residents, India recently nullified this law. Towards the end of 2020, two investor-state dispute settlement (ISDS) tribunals under the India-Netherlands and India- United Kingdom bilateral investment treaties (BITs) found India’s retroactive tax in breach of India’s BIT obligations. These arbitral defeats incited India to eliminate the infamous 2012 retroactive amendment to the tax laws. This article documents and analyses the sordid saga of nine long years by explaining the origin, evolution, and culmination of India’s retroactive tax misadventure. Considering the increasing number of instances for which foreign investors use the ISDS mechanism to challenge the host state’s sovereign taxation measures as BIT breaches, the ISDS rulings against India, especially by the tribunal in Cairn Energy v. India, assumes significance. A more comprehensive reading of the tribunal’s reasoning in Cairn Energy v. India elucidates that, while taxation measures are indeed an integral part of the state’s sovereign right to regulate, it has to be exercised reasonably and proportionately when furthering a public purpose. The exploitation of the power to tax disproportionately may prove to be detrimental to the state.\u0000India, retroactive tax, ISDS, BIT, Vodafone, Cairn","PeriodicalId":45365,"journal":{"name":"Intertax","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48936921","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 moment of accounting for Value Added Tax (VAT) is determined by the moment when the chargeable event occurs. In some cases, this moment may be linked to the date of payment of remuneration, including when it is paid in instalments. Does splitting the remuneration into parts (instalments) always affect the moment when the chargeable event occurs, or is it relevant only for services which are by their nature performed in parts? These questions are answered by the Court of Justice of the European Union (CJEU) in the rulings presented here. Chargeable event, VAT chargeability, successive payments, instalments, one-time service, continuous services, repetitive services
{"title":"Case Law Trends: Chargeable Events and Chargeability of VAT in the Context of Successive Payments: Comments in the Light of the Judgments in Cases C-324/20 and C-9/20","authors":"Adam Bartosiewicz","doi":"10.54648/taxi2022078","DOIUrl":"https://doi.org/10.54648/taxi2022078","url":null,"abstract":"The moment of accounting for Value Added Tax (VAT) is determined by the moment when the chargeable event occurs. In some cases, this moment may be linked to the date of payment of remuneration, including when it is paid in instalments. Does splitting the remuneration into parts (instalments) always affect the moment when the chargeable event occurs, or is it relevant only for services which are by their nature performed in parts? These questions are answered by the Court of Justice of the European Union (CJEU) in the rulings presented here.\u0000Chargeable event, VAT chargeability, successive payments, instalments, one-time service, continuous services, repetitive services","PeriodicalId":45365,"journal":{"name":"Intertax","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2022-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47256094","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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