DOCSLIB.ORG

Derivatives & Financial Instruments

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text

Load more

DERIVATIVES & FINANCIAL INSTRUMENTS Volume 13 - Number 2 - 2011 Articles United States/International • Multi-Jurisdictional Reactions to the US HIRE Act Withholding International • The Brittle Reincarnation of VAT Saving Schemes Germany • Regulatory and Tax Aspects of Short Selling France • New Tax Rules:Highlights of 2011 Finance Bill, Fourth Amended Finance Bill for 2010 and 2011 Social Security Finance Bill Belgium • Cash Drain Transactions and Tax Deductibility of Certain Expenses Recent Developments Indonesia; Brazil; Australia; United States INTERNATIONAL TAXATION, REGULATION AND ACCOUNTING v Articles sAL,131 Multi-Jurisdictional Reactions to the US HIRE Act Withholding The US Hiring Incentives to Restore Employment as a substantial portion of its business, holds financial as- Act of 2010 made a number of changes to the US sets for the account of others; or is engaged (or holds withholding tax laws in an attempt to improve itself out as being engaged) primarily in the business of tax compliance with respect to foreign accounts investing, reinvesting or trading in securities,' partnership held by US persons and cross-border interests, commodities 6 or any interest (including a futures transactions. One of the most significant or forward contract or option) in such securities, part- changes was the introduction of a new nership interests or commodities. Thus, a financial insti- withholding tax that will apply to US-source tution would include a hedge fund, a private equity fund payments after 31 December 2012 unless the or other collective investment vehicle, as well as a bank. non-US recipient complies with certain US 30% withholding on payments to non-financial foreign entit- reporting and disclosure rules. Not surprisingly ies. Sec. 1472 imposes a 30% withholding tax on payments the shift in US withholding tax policy has to most non-financial non-US entities .' after 31 December created a variety of reactions among US treaty partners. This article focuses on some of those jurisdictions and describes the reactions there, * Wilem Bongaerts, Senior Attorney, Loyens & Loeff N.V., Eindhoven; as well as some issues relating to compliance Paul Carman, Partner, Chapman and Cutler LLP, Chicago; Albert Col- with the new US law. lado, Partner, Garrigues, Barcelona; Eric Fort, Partner, Arendt & Med- ernech, Luxembourg; Wilhelm Haarmann, Partner, Haarmann, Frank- furt; Jidesh Kumar, Managing Partner, King, Stubb & Kasiva, India; 1. Introduction Peter Maher, Partner, A&L Goodbody, Dublin; Raul-Angelo Papotti, Associate, Chiomenti Studio Legale, Milano; Alain Ranger, Senior On 18 March 2010, the US Hiring Incentives to Restore Partner, Fasken Martineau DuMoulin LLP, Mon treal and George Employment (HIRE) Act of 2010 made a number of Ribeiro, Partner, Ribeiro Hui, Hong Kong. changes to the US withholding tax laws in an attempt to 1. The new withholding provisions are generally referred to as FATCA pro- improve tax compliance with respect to foreign accounts visions, in reference to the Act that originally introduced the provisions held by US persons and cross-border transactions. One in the US Congress. 2. Original issue discount includes both the deemed accrual on debt instru- of the most significant changes was the introduction of a ments that are sold at a discount to face and the deemed accrual that new withholding tax that will apply to US-source pay- occurs with regard to debt instruments in respect of which all or a portion ments after 31 December 2012 unless the non-US recip- of the interest is contingent. 3. The IRS has taken the position that swap income is fixed and determinable ient complies with certain US reporting and disclosure income even though it may not be US-source income. TD 8734, 62 Fed. rules.' Reg. 53387 (14 October 1997). 4. Sec. 1473(1)(A) IRC. 5. In this context, "security" means any share of stock in a corporation, a 2. New Withholding Provisions partnership or beneficial ownership interest in a widely held or publicly traded partnership or trust; a note, bond, debenture or other evidence of 30% withholding on payments to foreign financial institu- indebtedness; an interest rate, currency or equity notional principal con- tions. Sec. 1471 of the Internal Revenue Code (IRC) im- tract; evidence or an interest in, or a derivative financial instrument in, poses a 30% withholding tax on withholdable payments any security described in the previous parts of this definition or any cur- rency, including any option, forward contract, short position and any sim- to non-US financial institutions after 31 December 2012, ilar financial position in such a security or currency or a position which in respect of obligations in existence on 18 March 2012, is a hedge with respect to a security and is clearly identified in the dealer's unless the non-US financial institution agreed to certain records as being a hedge under Sec. 475(c)(2)(F)(iii) of the IRC. 6. In this context, "commodity" means any commodity which is actively US reporting and disclosure rules. In general, a withhold- traded (within the meaning of Sec. 1092(d)(1) of the IRC); any notional able payment includes: principal contract with respect to any actively traded commodity; any ev- - any payment of interest (including original issue dis- idence of an interest in, or a derivative instrument in, any actively traded commodity or any notional principal contract with regard to an actively count2), dividends, rent, salaries, wages, premiums, traded commodity, including any option, forward contract, futures con- annuities, compensation, remuneration, emoluments tract, short position and any similar instrument in such a commodity; and other fixed or determinable annual or periodic and any position which is a hedge with respect to a commodity and is clearly identified in the taxpayer's records as being described in Sec. gains, profits and income' if such payment is from 475(e)(2)(D)(iii) of the IRC. sources within the United States; and 7. Excepted non-financial foreign entities include (1) any corporation the - any gross proceeds from the sale or other disposition stock of which is regularly traded on an established securities market, (2) any corporation which is a member of the same expanded affiliated group of any property of a type that can produce interest as a corporation the stock of which is regularly traded on an established or dividends from sources within the United States. 4 securities market, (3) any entity which is organized under the laws of a US territory and which is wholly owned by one or more bona fide residents A financial institution is any entity which accepts deposits (as defined in Sec. 937(a)) of such US territory, (4) any forcign government, in the ordinary course of a banking or similar business; any political subdivision of a foreign government or any wholly owned agency or instrumentality of any one or more of the foregoing, (5) any in- 36 I DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL 2011 IBFD Multi-Jurisdictional Reactions to the US HIRE Act Withholding 2012, in respect of obligations in existence on 18 March would be required to apply 30% withholding tax on all 2012, unless the payee or the beneficial owner of the pay- US-source payments. ment either provides the withholding agent with a certi- As with financial institutions, non-financial institutions fication that the non-US entity does not have a substantial would need to obtain consent to disclose information un- US owner' or provides the withholding agent with the less required by Canadian law. Under the Proceeds of name, address and taxpayer identification number of each Crime Money Laundering and Terrorist Financing Act substantial US owner. and Regulations (PCMLTFA), financial institutions and Dividend-equivalent payments. In another change made securities dealers are required to collect certain prescribed by the HIRE Act, the United States will impose withhold- information regarding their customers, including infor- ing on dividend-equivalent payments that are deemed to mation regarding the beneficial owners of the customers. be from US sources. For these purposes, "dividend-equi- However, the information collected pursuant to valent payment" means (1) any substitute dividend pay- PCMLTFA is not entirely the same as the information re- ment made pursuant to a securities lending or a sale-re- quired by the IRS under the FATCA provisions. Further, purchase transaction that (directly or indirectly) is PCMLTFA and its regulations do not authorize the shar- contingent upon, or determined by reference to, the pay- ing of the information collected with the IRS. ment of a dividend from sources within the United States, Foreign non-business taxes paid generally qualify for a (2) any payment' made pursuant to a specified notional foreign tax credit to the extent that they do not exceed principal contract" that (directly or indirectly) is contin- the Canadian income tax otherwise payable on the non- gent upon, or determined by reference to, the payment business income. However, as further discussed below, if of a dividend from sources within the United States and an applicable tax treaty provides for a lower tax rate than (3) any other payment determined by the Treasury to be the rate imposed by the foreign jurisdiction, the lower similar. rate would apply for purposes of the foreign tax credit. A further limitation provides that any amount of tax paid 3. Multi-Jurisdictional Reactions to a foreign government in excess of the amount required Not surprisingly the shift in US withholding tax policy, to he paid under an applicable tax treaty may be consid- which will affect payments to jurisdictions with which ered a voluntary payment for Canadian foreign tax credit the United States has existing tax treaties, has created a and deduction purposes, and therefore would not qualify variety of reactions. This article focuses on some specific as foreign taxes paid. For example if the United States ap- jurisdictions and describes the reactions of those juris- plies a 30% withholding tax at source and then requires dictions, as well as some issues relating to compliance the taxpayer to claim a refund for the' excess withheld with the new US law.
Recommended publications
  • Is Panama Really Your Tax Haven? Secrecy Jurisdictions

    Is Panama Really Your Tax Haven? Secrecy Jurisdictions

    Is Panama really your tax haven? Secrecy jurisdictions and the countries they harm Petr Janský, Markus Meinzer, Miroslav Palanský1 Abstract Secrecy jurisdictions provide services that enable the residents of other countries to escape the laws and regulations of their home economies, evade tax, or hide their legally or illegally obtained assets. Recent offshore leaks offer only a limited and biased view of the world of financial secrecy. In this paper we quantify which secrecy jurisdictions provide secrecy to which countries and assess how successful countries are in targeting these jurisdictions with their policies. To that objective we develop the Bilateral Financial Secrecy Index (BFSI) and estimate it for 86 countries by quantifying the financial secrecy supplied to them by up to 100 secrecy jurisdictions. We then evaluate two major recent policy efforts by comparing them with the results of the BFSI. First, we focus on the blacklisting process of the European Commission and find that most of the important secrecy jurisdictions for EU member states have been identified by the lists. Second, we link the results to data on active bilateral automatic information exchange treaties to assess how well- aimed are the policymakers’ limited resources. We argue that while low-secrecy jurisdictions’ gains are maximized if a large share of received secrecy is covered by automatic information exchange, tax havens aim not to activate these relationships with countries to which they supply secrecy. Our results show that so far, some major secrecy jurisdictions successfully keep their most prominent relationships uncovered by automatic information exchange, and activating these relationships may thus be an effective tool to curb secrecy.
  • Taxation: State and Local Ronald H

    Taxation: State and Local Ronald H

    Loyola University Chicago Law Journal Volume 18 Article 15 Issue 2 Winter 1986 1985-1986 Illinois Law Survey 1986 Taxation: State and Local Ronald H. Jacobson Follow this and additional works at: http://lawecommons.luc.edu/luclj Part of the Taxation-State and Local Commons Recommended Citation Ronald H. Jacobson, Taxation: State and Local, 18 Loy. U. Chi. L. J. 767 (1986). Available at: http://lawecommons.luc.edu/luclj/vol18/iss2/15 This Article is brought to you for free and open access by LAW eCommons. It has been accepted for inclusion in Loyola University Chicago Law Journal by an authorized administrator of LAW eCommons. For more information, please contact [email protected]. Taxation: State and Local Ronald H. Jacobson* TABLE OF CONTENTS I. INTRODUCTION .................................... 767 II. INCOME TAXATION ................................ 768 A. Unitary Taxation .............................. 768 B. Tax-Exempt Financing......................... 771 C. Interest on Federally GuaranteedBonds ........ 773 III. PROPERTY TAXATION .............................. 776 A. Charitableand EducationalExemptions ........ 776 B. Condominium Assessment Classifications ....... 778 IV. SALES TAXATION - USE TAX EXEMPTION ........ 780 V. TAX PROTESTING .................................. 782 A . Property Tax .................................. 782 B. Retaliatory Tax ................................ 784 VI. LOCAL GOVERNMENT TAXING POWERS ............ 786 A. County Tax Penalty Retention ................. 786 B. Taxation by Home Rule Units ................
  • 2021 Revenue Ordinance

    2021 Revenue Ordinance

    2021 Revenue Ordinance As Proposed on December 5, 2019 ii Revenue Ordinance of 2021 to Levy Taxes and Fees and Raise Revenue For the City of Savannah Georgia As adopted on December 18, 2020 Published by City of Savannah Revenue Department Post Office Box 1228 Savannah, GA 31402-1228 CITY OF SAVANNAH 2021 CITY COUNCIL Mayor Van R. Johnson, II Post 1 At-Large Post 2 At-Large Kesha Gibson-Carter Alicia Miller Blakely District 1 District 2 Bernetta B. Lanier Detric Leggett District 3 District 4 Linda Wilder-Bryan Nick Palumbo District 5 District 6 Dr. Estella Edwards Shabazz Kurtis Purtee Revenue Ordinance Compiled By Revenue Director/City Treasurer Ashley L. Simpson Utility Billing Manager Nicole Brantley Treasury Manager Joel Paulk Business Tax & Alcohol License Manager Judee Jones Revenue Special Projects Coordinator Saja Aures Table of Contents Revenue Ordinance of 2021 ....................................................................................................................... 1 ARTICLE A. GENERAL ............................................................................................................................... 1 Section 1. SCOPE; TAXES AND FEES .................................................................................................... 1 Section 2. DEFINITIONS ........................................................................................................................... 1 Section 3. JANUARY 1 GOVERNS FOR YEAR ......................................................................................
  • Chapter 5 Foreign Tax Credit P.302 Structural Tax Options for an Outbound U.S

    Chapter 5 Foreign Tax Credit P.302 Structural Tax Options for an Outbound U.S

    Chapter 5 Foreign Tax Credit p.302 Structural tax options for an outbound U.S. enterprise in (1) foreign destination country and (2) any conduit country: 1) Branch (e.g., a disregarded entity) - current U.S. income taxation on profits & loss deduction availability in the U.S. 2) Foreign corporate subsidiary - income tax deferral of U.S. income tax & no possible U.S. loss utilization Is the entity decision controlled by (1) tax planning or (2) non-tax business considerations? 4/9/2013 (c) William P. Streng 1 Mitigating Possible Double National Level Taxation Possible double taxation exposure exists (1) since the U.S. income tax is imposed on a worldwide basis & (2) assuming foreign country income tax. Options for unilateral relief (as provided by U.S.): 1) a tax deduction for the foreign tax paid (not completely eliminating double taxation) 2) a (limited) credit for the foreign tax paid (primarily used by U.S.); limited to offsetting U.S. tax on taxpayer’s foreign income. 3) exemption under a territorial system (only 4/9/2013source country taxation)(c) William P. Strengand not in U.S. 2 Bilateral (i.e., Income Tax Treaty) Relief p.306 Double tax relief accomplished under a U.S. bilateral income tax treaty. See U.S. Model, Article 23 (2006). - possible shifting of the primary income tax liability from source location to residence jurisdiction. - but, a U.S. income tax treaty does include a “savings clause” - enabling the continuing worldwide tax jurisdiction of U.S. citizens, residents or corporations. 4/9/2013 (c) William P.
  • Improving the Tax System in Indonesia

    Improving the Tax System in Indonesia

    OECD Economics Department Working Papers No. 998 Improving the Tax System Jens Matthias Arnold in Indonesia https://dx.doi.org/10.1787/5k912j3r2qmr-en Unclassified ECO/WKP(2012)75 Organisation de Coopération et de Développement Économiques Organisation for Economic Co-operation and Development 30-Oct-2012 ___________________________________________________________________________________________ English - Or. English ECONOMICS DEPARTMENT Unclassified ECO/WKP(2012)75 IMPROVING THE TAX SYSTEM IN INDONESIA ECONOMICS DEPARTMENT WORKING PAPERS No. 998 By Jens Arnold All OECD Economics Department Working Papers are available through OECD's Internet website at http://www.oecd.org/eco/Workingpapers English - Or. English JT03329829 Complete document available on OLIS in its original format This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. ECO/WKP(2012)75 ABSTRACT/RESUME Improving the tax system in Indonesia Indonesia has come a long way in improving its tax system over the last decade, both in terms of revenues raised and administrative efficiency. Nonetheless, the tax take is still low, given the need for more spending on infrastructure and social protection. With the exception of the natural resources sector, increasing tax revenues would be best achieved through broadening tax bases and improving tax administration, rather than changes in the tax schedule that seems broadly in line with international practice. Possible measures to broaden the tax base include bringing more of the self-employed into the tax system, subjecting employer-provided fringe benefits and allowances to personal income taxation and reducing the exemptions from value-added taxes.
  • Panama Papers Leaks

    Panama Papers Leaks

    GRAY TOLUB1 LLP Focusing on Domestic & International Taxation, Real Estate, Corporate, and Trust & Estate Matters. Client AlertAPRIL 04, 2016 AUTHORS Armin Gray Benjamin Tolub PANAMA PAPERS LEAKS: SUBJECT THE TAX MAN COMETH OVDP Panama On April 03, 2016, the press reported that 11.5 million records were leaked from Panamanian law firm Mossack Fonseca. The records detail offshore holdings of the celebrities, politicians, and the mega-rich many of which were purportedly engaged in illegal activities including tax evasion. Such leaks have been referred to as the “Panama papers” or the “Wikileaks of the mega-rich” by some newspapers.1 More details can be found at the website of the International Consortium of Investigative Journalists (“ICIJ”), which have summarized their findings as follows: The largest cross-border journalism collaboration ever has uncovered a giant leak of documents from Mossack Fonseca, a global law firm based in Panama. The secret files: • Include 11.5 million records, dating back nearly 40 years – making it the largest leak in offshore history. Contains details on more than 214,000 offshore entities connected to people in more than 200 countries and territories. Company owners 1 See Toppo, Greg, “Worldwide, jaws drop to Panama Papers’ Leak”, USA Today, last accessed April 3, 2016, available at: http://www.usatoday.com/story/news/2016/04/03/reactions- panama-papers-leak-go-global/82589874/. www.graytolub.com Client Alert Page 2 in [sic] billionaires, sports stars, drug smugglers and fraudsters. • Reveal the offshore holdings 140 politicians and public officials around the world – including 12 current and former world leaders.
  • Fixing the Constitutional Absurdity of the Apportionment of Direct Tax Calvin H

    Fixing the Constitutional Absurdity of the Apportionment of Direct Tax Calvin H

    University of Minnesota Law School Scholarship Repository Constitutional Commentary 2004 Fixing the Constitutional Absurdity of the Apportionment of Direct Tax Calvin H. Johnson Follow this and additional works at: https://scholarship.law.umn.edu/concomm Part of the Law Commons Recommended Citation Johnson, Calvin H., "Fixing the Constitutional Absurdity of the Apportionment of Direct Tax" (2004). Constitutional Commentary. 103. https://scholarship.law.umn.edu/concomm/103 This Article is brought to you for free and open access by the University of Minnesota Law School. It has been accepted for inclusion in Constitutional Commentary collection by an authorized administrator of the Scholarship Repository. For more information, please contact [email protected]. Articles FIXING THE CONSTITUTIONAL ABSURDITY OF THE APPORTIONMENT OF DIRECT TAX Calvin H. Johnson* The Constitution requires that direct taxes be apportioned among the states according to population. 1 Before the abolition * Professor Law, University of Texas. A table of short form citations to fre- quently cited documentary sources is found in the Appendix. 1. The Constitution of the United States provides: Representatives and direct Taxes shall be apportioned among the several States ... according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, (but including] three­ fifths of all other Persons. U.S. CONST. art. I, § 2, cl. 3. The three-fifths of "all other Persons" referred to slaves, but the Thirteenth Amendment abolished slavery. See also U.S. CONST. art. 1, § 9, cl. 4 (providing that "[n]o Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before di­ rected to be taken").
  • Imports in GST Regime (Goods & Services Tax)

    Imports in GST Regime (Goods & Services Tax)

    Imports in GST Regime (Goods & Services Tax) Introduction Under the GST regime, Article 269A constitutionally mandates that supply of goods, or of services, or both in the course of import into the territory of India shall be deemed to be supply of goods, or of services, or both in the course of inter-State trade or commerce. So import of goods or services will be treated as deemed inter-State supplies and would be subject to Integrated tax. While IGST on import of services would be leviable under the IGST Act, the levy of the IGST on import of goods would be levied under the Customs Act, 1962 read with the Custom Tariff Act, 1975. The importer of services will have to pay tax on reverse charge basis. However, in respect of import of online information and database access or retrieval services (OIDAR) by unregistered, non-taxable recipients, the supplier located outside India shall be responsible for payment of taxes (IGST). Either the supplier will have to take registration or will have to appoint a person in India for payment of taxes. Supply of goods or services or both to a Special Economic Zone developer or a unit shall be treated as inter-State supply and shall be subject to levy of integrated tax. Directorate General of Taxpayer Services CENTRAL BOARD OF EXCISE & CUSTOMS www.cbec.gov.in Imports in GST Regime (Goods & Services Tax) Importer Exporter Code (IEC): As per DGFT’s Trade Notice No. 09 The taxes will be calculated as under: dated 12.06.2017, the PAN of an entity would be used as the Import Particulars Duty Export code (IEC).
  • Fixing U.S. International Taxation

    Fixing U.S. International Taxation

    DANIEL N. SHAVIRO FIXING U.S. INTERNATIONAL TAXATION 2 FIXING U.S. INTERNATIONAL TAXATION (forthcoming Oxford University Press, 2014) Daniel N. Shaviro June 2013 All Rights Reserved 2 1. INTRODUCTION AND OVERVIEW A Fork in the Road? Yogi Berra once offered the advice, “When you come to a fork in the road, take it.” He could almost have been speaking about the U.S. international tax rules, which govern how we tax cross-border or multinational investment. For “outbound” investment, or that earned abroad by U.S. companies, the U.S. rules, for almost a century, have muddled along in the netherworld between two sharply etched approaches that dominate the literature, each intuitively appealing but utterly inconsistent with the other. The first approach is called worldwide or residence-based taxation. Under it, the U.S. would impose tax at the same rate on U.S. companies’ foreign source income (FSI) as on their domestic income. The great apparent virtue of this approach is that it would prevent the companies from reducing their U.S. tax liability by investing (or reporting income) abroad rather than at home. The second approach is called source-based or territorial taxation. Under it, the U.S., recognizing that foreign companies pay no U.S. tax when they invest abroad, would extend this same U.S. tax exemption for FSI to its own companies. (This approach is therefore also called exemption). The great apparent virtue of this approach is that it would avoid placing U.S. companies under a competitive disadvantage, as compared to their foreign rivals, when they invest abroad.
  • Form W-4, Employee's Withholding Certificate

    Form W-4, Employee's Withholding Certificate

    Employee’s Withholding Certificate OMB No. 1545-0074 Form W-4 ▶ (Rev. December 2020) Complete Form W-4 so that your employer can withhold the correct federal income tax from your pay. ▶ Department of the Treasury Give Form W-4 to your employer. 2021 Internal Revenue Service ▶ Your withholding is subject to review by the IRS. Step 1: (a) First name and middle initial Last name (b) Social security number Enter Address ▶ Does your name match the Personal name on your social security card? If not, to ensure you get Information City or town, state, and ZIP code credit for your earnings, contact SSA at 800-772-1213 or go to www.ssa.gov. (c) Single or Married filing separately Married filing jointly or Qualifying widow(er) Head of household (Check only if you’re unmarried and pay more than half the costs of keeping up a home for yourself and a qualifying individual.) Complete Steps 2–4 ONLY if they apply to you; otherwise, skip to Step 5. See page 2 for more information on each step, who can claim exemption from withholding, when to use the estimator at www.irs.gov/W4App, and privacy. Step 2: Complete this step if you (1) hold more than one job at a time, or (2) are married filing jointly and your spouse Multiple Jobs also works. The correct amount of withholding depends on income earned from all of these jobs. or Spouse Do only one of the following. Works (a) Use the estimator at www.irs.gov/W4App for most accurate withholding for this step (and Steps 3–4); or (b) Use the Multiple Jobs Worksheet on page 3 and enter the result in Step 4(c) below for roughly accurate withholding; or (c) If there are only two jobs total, you may check this box.
  • Environmental Taxes and Subsidies: What Is the Appropriate Fiscal Policy for Dealing with Modern Environmental Problems?

    Environmental Taxes and Subsidies: What Is the Appropriate Fiscal Policy for Dealing with Modern Environmental Problems?

    William & Mary Environmental Law and Policy Review Volume 24 (2000) Issue 1 Environmental Justice Article 6 February 2000 Environmental Taxes and Subsidies: What is the Appropriate Fiscal Policy for Dealing with Modern Environmental Problems? Charles D. Patterson III Follow this and additional works at: https://scholarship.law.wm.edu/wmelpr Part of the Environmental Law Commons, and the Tax Law Commons Repository Citation Charles D. Patterson III, Environmental Taxes and Subsidies: What is the Appropriate Fiscal Policy for Dealing with Modern Environmental Problems?, 24 Wm. & Mary Envtl. L. & Pol'y Rev. 121 (2000), https://scholarship.law.wm.edu/wmelpr/vol24/iss1/6 Copyright c 2000 by the authors. This article is brought to you by the William & Mary Law School Scholarship Repository. https://scholarship.law.wm.edu/wmelpr ENVIRONMENTAL TAXES AND SUBSIDIES: WHAT IS THE APPROPRIATE FISCAL POLICY FOR DEALING WITH MODERN ENVIRONMENTAL PROBLEMS? CHARLES D. PATTERSON, III* 1 Oil spills and over-fishing threaten the lives of Pacific sea otters. Unusually warm temperatures are responsible for an Arctic ice-cap meltdown. 2 Contaminated drinking water is blamed for the spread of avian influenza from wild waterfowl to domestic chickens.' Higher incidences of skin cancer are projected, due to a reduction in the ozone layer. Our environment, an essential and irreplaceable resource, has been under attack since the industrial age began. Although we have harnessed nuclear energy, made space travel commonplace, and developed elaborate communications technology, we have been unable to effectively eliminate the erosion and decay of our environment. How can we deal with these and other environmental problems? Legislators have many methods to encourage or discourage individual or corporate conduct.
  • EMERGING ISSUES in INTERNATIONAL TAXATION – CHALLENGES and WAY FORWARD by PATIENCE T

    EMERGING ISSUES in INTERNATIONAL TAXATION – CHALLENGES and WAY FORWARD by PATIENCE T

    EMERGING ISSUES IN INTERNATIONAL TAXATION – CHALLENGES AND WAY FORWARD By PATIENCE T. RUBAGUMYA COMMISSIONER LEGAL SERVICES AND BOARD AFFAIRS OUTLINE L 1 Introduction 2 Challenges in international taxation taxation 3 Proposed Way forward 4 Conclusion INTRODUCTION Structure of Budget Financing in Uganda and most African Countries: • Reliance on taxes to fund current and development expenditure • About 70% of the taxes are collected from domestic resources • Domestic resource mobilization is therefore key for sustainable development and thus the focus is now on international taxation and implementing strategies to enhance compliance with Transfer Pricing Regulations, Preventing Treaty Abuse and Policy redesign CHALLENGES Treaty Abuse: • This is a realistic challenge. Most treaties in developing countries are being abused due to inadequacy of the beneficial ownership anti provision. • Treaties are vulnerable to abuse and this is as a result of the way the provisions in those treaties are structured and as such the vice of treaty shopping is prevalent. CHALLENGES • Lack of information about worldwide activities and operations of multinational entities and finding comparable data for transfer pricing cases. • The MNEs create cash boxes in preferential tax regimes jurisdictions and these erode the tax base of developing countries through the payments of royalties and interest without substantial presence and value creation in such jurisdictions. CHALLENGES • Inadequate capacity of staff International taxation is complex, takes about four years to build expertise of tax official in international taxation matters. • Limited financing for capacity building programmes in the face of competing demands for resources which thus undermines domestic resource mobilization efforts. CHALLENGES- EXTRACTIVES • Some developing countries have significant oil reserves and other natural resources and often the right to tax income from the activities relating to exploitation of such resources is often an area of disputes that end up in costly international arbitration cases.