International tax primer

Description

Cover Halftitle Page Title Page Copyright Page Table of Contents Preface Chapter 1 Introduction 1.1 Objectives of This Primer 1.2 What Is International Tax? 1.3 Goals of International Tax Rules 1.4 The Role of the Tax Adviser in Planning International Transactions Chapter 2 Jurisdiction to Tax 2.1 Introduction 2.2 Defining Residence 2.2.1 Residence of Individuals 2.2.2 Residence of Legal Entities 2.2.3 Treaty Issues Relating to Residence 2.3 Source Jurisdiction 2.3.1 Introduction 2.3.2 Employment and Personal Services Income 2.3.3 Business Income 2.3.4 Investment Income Chapter 3 Taxation of Residents 3.1 Introduction 3.2 Taxation of Residents on Their Worldwide Income 3.2.1 Tax Policy Considerations 3.2.2 The Tax Consequences of Residence 3.2.3 Double Taxation 3.2.4 Computation of the Foreign Source Income of Residents 3.2.4.1 In General 3.2.4.2 Foreign Exchange Gains and Losses 3.2.4.3 The Treatment of Losses 3.2.5 Tax Administration Issues 3.3 Exceptions to Worldwide Taxation 3.3.1 Nonresident Companies and Other Legal Entities 3.3.2 Temporary Residents 3.4 Special Issues 3.4.1 Exit or Departure Taxes 3.4.2 Trailing Taxes 3.4.3 Resident for Part of a Year Chapter 4 Double Taxation Relief 4.1 Introduction 4.2 International Double Taxation Defined 4.3 Relief Mechanisms 4.3.1 Deduction Method 4.3.2 Exemption Method 4.3.2.1 Participation Exemption 4.3.3 Credit Method 4.3.3.1 General Rules 4.3.3.2 Types of Limitations 4.3.3.3 Indirect or Underlying Credit 4.3.4 Comparison of the Exemption and Credit Methods 4.3.5 Treaty Aspects 4.4 Allocation of Expenses 4.5 Tax Sparing Chapter 5 Taxation of Nonresidents 5.1 Introduction 5.2 Tax Policy Considerations in Taxing Nonresidents 5.3 Threshold Requirements 5.4 Source Rules 5.5 Double Taxation 5.6 Excessive Taxation of Nonresidents 5.7 Computation of the Domestic Source Income of Nonresidents 5.8 Taxation of Various Types of Income of Nonresidents 5.8.1 Business Income 5.8.1.1 In General 5.8.1.2 Branch Taxes 5.8.2 Income from Immovable Property 5.8.3 Income from Employment 5.8.4 Investment Income: Dividends, Interest, and Royalties 5.8.5 Capital Gains 5.9 Administrative Aspects of Taxing Nonresidents 5.9.1 Introduction 5.9.2 Obtaining Information about Domestic Source Income of Nonresidents 5.9.3 Collection of Tax from Nonresidents Chapter 6 Transfer Pricing 6.1 Introduction 6.2 The OECD Transfer Pricing Guidelines 6.3 United Nations, Practical Manual on Transfer Pricing for Developing Countries 6.4 The Arm’s-Length Standard 6.4.1 Introduction 6.4.2 Comparability Analysis 6.4.3 Comparable Uncontrolled Price Method 6.4.4 Resale-Price Method 6.4.5 Cost Plus Method 6.4.6 Comparison of Traditional Methods 6.4.7 Profit-Split Method 6.4.8 Transactional Net Margin Method 6.5 Sharing of Corporate Resources 6.5.1 Introduction 6.5.2 Loans or Advances 6.5.3 Performance of Services 6.5.4 Use of Tangible Property 6.5.5 Use or Transfer of Intangible Property 6.6 Cost-Contribution Arrangements 6.7 Disregarded Transactions 6.8 Transfer Pricing Documentation Requirements 6.9 Treaty Aspects of Transfer Pricing 6.10 Tax Policy Considerations: Formulary Apportionment and the Future of the Arm’s-Length Method Chapter 7 Anti-avoidance Measures 7.1 Introduction 7.2 Restrictions on the Deduction of Interest: Thin Capitalization and Earnings-Stripping Rules 7.2.1 Introduction 7.2.2 The Structural Features of Thin Capitalization and Earnings-Stripping Rules 7.3 CFC Rules 7.3.1 Introduction 7.3.2 Structural Features of CFC Rules 7.3.2.1 Definition of a CFC 7.3.2.2 Designated Jurisdiction or Global Approach 7.3.2.3 Definition and Computation of Attributable Income 7.3.2.4 Nature and Scope of Exemptions 7.3.2.5 Resident Taxpayers Subject to Tax 7.3.2.6 Relief Provisions 7.3.3 Tax Treaties and CFC Rules 7.4 Nonresident Trusts 7.5 Foreign Investment Funds Chapter 8 An Introduction to Tax Treaties 8.1 Introduction 8.2 Legal Nature and Effect of Tax Treaties 8.2.1 Vienna Convention on the Law of Treaties 8.2.2 The Relationship between Tax Treaties and Domestic Law 8.3 The OECD and UN Model Tax Treaties 8.4 The Process of Negotiating and Revising Tax Treaties 8.5 Objectives of Tax Treaties 8.6 Interpretation of Tax Treaties 8.6.1 Introduction 8.6.2 The Interpretive Provisions of the Vienna Convention on the Law of Treaties 8.6.3 The Interpretation of Undefined Terms in Accordance with Domestic Law — Article 3(2) 8.7 Summary of the Provisions of the OECD and UN Model Treaties 8.7.1 Introduction 8.7.2 Coverage, Scope, and Legal Effect 8.7.3 The Distributive Rules: Articles 6 through 21 8.7.3.1 Introduction 8.7.3.2 Business Income 8.7.3.3 Employment and Personal Services Income 8.7.3.4 Income and Gains from Immovable Property 8.7.3.5 Reduced Withholding Rates on Certain Investment Income 8.7.3.6 Other Types of Income 8.7.4 Administrative Cooperation 8.8 Special Treaty Issues 8.8.1 Nondiscrimination 8.8.2 Treaty Abuse 8.8.2.1 Introduction 8.8.2.2 Treaty Shopping 8.8.2.3 OECD BEPS Action 6: Preventing Treaty Abuse 8.8.3 Resolution of Disputes 8.8.4 Administrative Cooperation 8.8.5 Attribution of Profits to Permanent Establishments Chapter 9 Emerging Issues 9.1 Introduction 9.2 Base Erosion and Profit Shifting (BEPS) 9.2.1 Introduction 9.2.2 The 1998 OECD Harmful Tax Competition Report 9.2.3 The G20/ BEPS Project 9.3 Hybrid Arrangements 9.3.1 What Is a Hybrid Arrangement? 9.3.2 Hybrid Entities 9.3.3 Hybrid Financial Instruments 9.3.4 OECD BEPS Proposals for Hybrids 9.4 Fees for Management, Technical, and Consulting Services 9.4.1 Introduction 9.4.2 The Taxation of Income from Management, Technical, and Consulting Services under Tax Treaties 9.4.3 Proposed Article on Fees for Management, Technical, and Consulting Services in the UN Model Treaty 9.5 Arbitration 9.6 The Digital Economy — Electronic Commerce 9.6.1 Introduction 9.6.2 Tax Challenges Posed by the Digital Economy Glossary Index