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Transparency and disclosureand developed countries would likely receive little significant informationfrom this automatic exchange of information. Thus, the costof helping developing countries improve tax collection while buildingtheir internal capacity to fully participate in automatic exchangeshould not be unduly high.4.3.4.3.2 ParticipationEven with adequate infrastructure to participate in automaticexchange of information under the CRS and CAA, developing countriesmust actually be able to persuade partner countries to sign theseagreements. The bilateral version offered as the main example of aCAA would be less effective for many developing countries. It wouldhave to be negotiated on a bilateral basis with each country and couldbe completed only with current treaty partners (bilateral tax treatiesor TIEAs). The alternative, multilateral version of a CAA providedin annex 1 of the July 2104 OECD document (signed by 51 countriesin October 2014) has its legal basis in the Multilateral Convention onMutual Administrative Assistance in Tax Matters (see section 4.2.4above). 53 This multilateral version offers two key advantages to developingcountries — only a single agreement to negotiate and a wide poolof potential signatory partners. There are, however, three problems.First, with the availability and prominence of the bilateral version,there may be inadequate motivation for some countries to pursuethe multilateral one. Second, even if countries do participate in a multilateralCAA, it is not clear that they would be required to invite adeveloping country to sign. Specifically, some developing countriesthat have been unable to sign treaties with tax havens may be concernedthat tax havens would also refuse to participate in a CAA withthem. Yet these havens are key jurisdictions from which a developingcountry may need to acquire tax information, and unlike developedcountries the developing country may have little leverage to persuadeor entice the participation of the tax haven. Finally, unlike the UnitedStates FATCA regime, which inspired the CRS and CAA, it is not clearwhat sanctions would apply to non-participants. The absence of sanctionsmay be a concern for developing countries that are trying to gettax havens to join them in a CAA.53Ibid., at 215.551
Diane Ring4.4 Industry-specific reporting requirements (naturalresources, financial services)Industry-specific CbC reporting has also been a focus of increasedtransparency for countries. For example, United States securities lawregulations now require extractive industries to report various paymentsmade to foreign governments by businesses engaged in extractive industries(exploration, extraction, processing and export of oil, natural gasor minerals, or the acquisition of a licence to engage in such activity).These payments, which must be reported on a country-by-country basis,include “taxes, royalties, fees (including licence fees), production entitlements,bonuses, and other material benefits.” 54 Implementation of thesenew requirements (enacted into law in 2010), however, awaits Securitiesand Exchange Commission implementing regulation.On a more global scale, the Extractive Industries TransparencyInitiative (EITI) seeks to promote a two-pronged reporting approachfor transparency in extractive industries 55 under which businessesreport what they pay to each jurisdiction, and the governments reportwhat they receive. 56 However, work on industry-targeted disclosurehas not been limited to extractive industries. Directive 2013/36/EUof the European Parliament and of the Council of 26 June 2013 onaccess to the activity of credit institutions and the prudential supervisionof credit institutions and investment firms (amending Directive2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC) 57seeks disclosure by covered financial institutions of information on acountry-by-country basis, including: profit or loss before tax, tax paid,subsidies received, average number of employees. Member States ofthe EU must enact rules domestically to require the reporting. 5854United States Securities Exchange Act of 1934, section 13 (q).55Extractive Industries Transparency Initiative Fact Sheet 2014, availableat http://eiti.org/files/2014-03-26%20Factsheet%20English_0.pdf.56EITI countries and country reports are available at http://eiti.org/countries.57Available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:176:0338:0436:EN:PDF.58See, for example, United Kingdom of Great Britain and Northern Irelandreporting rules which came into effect in January 2014, with the first552
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United Nations Handbookon Selected
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Copyright © June 2015United Nation
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PrefaceIn recent years, internation
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Acknowledgements(Chile); Mr. Wolfga
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IntroductionIn follow-up, the Subco
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ContentsPreface ...................
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ContentsChapter IITaxation of incom
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Contents5. Article 13 of the United
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ContentsChapter VIPreventing tax tr
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Contents4. Options for developing c
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Contents5.5 Regional agreements ...
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Hugh J. Ault and Brian J. Arnoldand
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Hugh J. Ault and Brian J. Arnold(8)
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Hugh J. Ault and Brian J. Arnold‣
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Hugh J. Ault and Brian J. ArnoldGAA
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Hugh J. Ault and Brian J. Arnold7.6
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Hugh J. Ault and Brian J. Arnoldcom
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Hugh J. Ault and Brian J. Arnold8.5
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Hugh J. Ault and Brian J. Arnoldinc
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Hugh J. Ault and Brian J. Arnoldinc
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Hugh J. Ault and Brian J. Arnoldpay
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Hugh J. Ault and Brian J. ArnoldThe
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Chapter IITaxation of income from s
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Taxation of income from servicesnot
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Taxation of income from servicesin
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Taxation of income from servicespra
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Taxation of income from servicesThe
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Taxation of income from servicesof
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Taxation of income from servicesear
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Taxation of income from servicesamo
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Taxation of income from servicesHow
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Taxation of income from services‣
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Taxation of income from servicestax
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Taxation of income from servicesman
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Taxation of income from servicesa n
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Taxation of income from servicesis
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Taxation of income from services‣
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Taxation of income from servicesper
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Taxation of income from serviceson
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Taxation of income from servicesthe
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Taxation of income from servicespay
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Taxation of income from servicessol
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Chapter IIITaxation of non-resident
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Taxation of non-residents’ capita
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Chapter IVLimiting interest deducti
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Limiting interest deductionspartial
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Limiting interest deductionsthe pot
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Limiting interest deductionspotenti
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Limiting interest deductionsthey do
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Limiting interest deductionsissue m
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Limiting interest deductionsare in
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Limiting interest deductionsSpecifi
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Limiting interest deductions3.1.3.3
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Limiting interest deductionsas divi
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Limiting interest deductions‣ ¾
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Limiting interest deductionsconnect
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Limiting interest deductionslending
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Limiting interest deductionsOn the
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Limiting interest deductionsOECD Mo
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Limiting interest deductionsHowever
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Chapter VNeutralizing effects of hy
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Neutralizing effects of hybrid mism
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Peter A. HarrisOwnership of assetsE
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Peter A. HarrisAnnex IIEffects of o
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Peter A. HarrisA.1.7 The mismatch i
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Peter A. HarrisSubject to tax treat
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Peter A. HarrisA.2.9 The mismatch i
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Peter A. HarrisA.3 Mismatches in re
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Peter A. HarrisA.3.7 Figure 17 in t
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Peter A. Harrisa PE in the jurisdic
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Chapter VIPreventing tax treaty abu
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Preventing tax treaty abuseModel Ta
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Preventing tax treaty abuseand appr
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Preventing tax treaty abuseFinally,
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Preventing tax treaty abuse‣ ¾ T
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Preventing tax treaty abusehands of
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Preventing tax treaty abusefor the
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Preventing tax treaty abuseintended
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Preventing tax treaty abuseThe Comm
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Preventing tax treaty abuseOECD cla
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Preventing tax treaty abuseSubparag
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Preventing tax treaty abusethe Stat
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Preventing tax treaty abusemore of
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Preventing tax treaty abuseSubdivis
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Preventing tax treaty abuseii)less
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Preventing tax treaty abuse2.3.1.2
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Preventing tax treaty abusesubparag
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Preventing tax treaty abuseaccordan
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Preventing tax treaty abuse‣ ¾ T
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Preventing tax treaty abuseboth Sta
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Preventing tax treaty abuseare mean
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Chapter VIIPreventing avoidance of
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Preventing avoidance of permanent e
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Chapter VIIIProtecting the tax base
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Protecting the tax base in the digi
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Eric M. Zoltincentives are bad in t
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Eric M. Zoltoption, and taxes are j
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Eric M. ZoltWhile tax incentives ca
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Eric M. Zoltdisguised tax incentive
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Eric M. Zoltif the foreign investor
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Eric M. ZoltNew foreign direct inve
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Eric M. Zoltto avoid paying taxes o
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Eric M. Zoltshould be the monitorin
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Eric M. Zolt2.2 Design consideratio
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Eric M. Zoltwith the creation of a
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Eric M. Zolt2.2.1.3 Tax holidaysIn
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Eric M. ZoltInvestment allowances a
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Eric M. Zoltmechanism, investors ha
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Eric M. Zolt2.2.2.6 Transfer pricin
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Eric M. Zoltthat offers tax privile
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Eric M. Zolt6. Calculate the amount
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Eric M. ZoltFor an investor, the to
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Eric M. Zoltthe right of source cou
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Eric M. Zoltincome either when earn
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Eric M. Zolt‣ ¾ “Broad approac
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Eric M. ZoltThe insight here is tha
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Eric M. Zoltattributable to develop
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Chapter XTransparency and disclosur
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Transparency and disclosure1.4 Perv
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Page 541 and 542: Diane Ringunder review. To assist i
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Page 545 and 546: Diane Ringpermanent establishment (
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Page 553 and 554: Diane RingThere is, however, anothe
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Page 559 and 560: Diane Ring3.3.6.2.3 DomesticThe pro
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Page 563 and 564: Diane Ring3.4 Disclosure of aggress
Page 565 and 566: Diane Ringdisclosure. But it is not
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