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Papers & Reports

Promoting Inclusive and Effective Tax Cooperation at the United Nations

  • By Lyla Latif

This technical report aims to provide a seminal analysis and strategic roadmap that aims to empower Africa to assert its voice and agency in shaping inclusive and transformative international tax cooperation and governance. It provides African policymakers and leaders with a nuanced blueprint to recalibrate international tax cooperation, underscoring principles of inclusivity, equity, and transparency. Through highlighting the urgency of addressing illicit financial flows and the disproportionate impact of global crises on developing nations, this report advocates for a globally inclusive, intergovernmental tax process at the UN that ensures equal representation and participation of all countries.

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Case Law Trend: Withholding Taxation Under the Fundamental Freedoms

  • By Ivan Lazarov

This paper analyses developments in the CJEU’s case law regarding withholding taxes and the constraints that fundamental freedoms impose on Member States in this area.

Ivan Lazarov, Case Law Trend: Withholding Taxation Under the Fundamental Freedoms, 51 Intertax 524 (2023).

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Location, Financial and Real Effects of CFC Rules after the ATAD Implementation in the EU

  • By Emilia Gschossmann and Alina Pfrang

This paper investigates the introduction of Controlled Foreign Company (CFC) rules by the Anti-Tax Avoidance Directive (ATAD) in the European Union. The authors study whether the implementation of CFC rules, in the context of the ATAD, alters the location, financial, and economic activity decisions of multinational enterprises (MNEs). The results reveal that the newly implemented CFC rules are only partly effective in reducing profit shifting. Instead, the overall number of CFC subsidiaries decreased, and the financial revenue of the persisting subsidiaries remained largely unchanged. The authors observed positive effects on the costs of employees assigned to a CFC subsidiary, suggesting that the economic activity exemptions introduced by the ATAD allow MNEs to circumvent the rules. This permits them to opt for a simple approach, enhancing economic activity in these locations.

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Background And Analysis Of The Taxation Of Multinational Enterprises And The Potential Reallocation Of Taxing Rights Under the OECD’s Pillar One

The staff of the Joint Committee on Taxation describes legal and economic background relating to the taxation of income earned by multinational enterprises and the potential economic and revenue effects of Pillar One Amount A.

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Business model digitalization, competition, and tax savings

  • By Elisa Casi, Petro Lisowsky, Barbara Stage, and Maximilian Todtenhaupt

The authors examine the effect of business model digitalization on competition and corporate tax savings. Global policymakers have expressed concern that digitalization-related tax savings unfairly benefit the competitive standing of rival firms over their competitors. This article argues that rivals’ adoption of a digital business model leads to negative economic effects on the performance of their non-digitalizing competitors. Contrary to policymakers’ concerns of digitalization-related tax savings unfairly shaping competition, the authors' findings suggest that tax savings from digitalization are not a key driver of altering competition between digitalized and non-digitalized firms.

Elisa Casi, Petro Lisowsky, Barbara Stage, & Maximilian Todtenhaupt, Business model digitalization, competition, and tax savings (TRR 266 Acct. for Transparency Working Paper Series No. 142, 2024).

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International Cooperation on Tax Matters at the United Nations: A Turning Point in History?

  • By Leopoldo Parada

The United Nations General Assembly established an ad hoc intergovernmental committee to draft the general terms of a UN Framework Convention on international tax cooperation (2023 UN resolution). This triggered conflicting reactions.  One take is skepticism because control has been attributed to the OECD over the development of international tax standards for decades. Another take is optimism, especially from those who perceive the 2023 UN resolution as a turning point in the history of international tax policy. This optimism is fueled by the possibility of moving away from the OECD’s historical dominance of the international tax agenda, which has disregarded the genuine interests of developing nations. This article adopts a moderated stance. The 2023 UN resolution represents an extremely important recognition of the need for counterbalances in the dynamics of powers in international taxation. It also highlights flexibility as a policy strategy that may foster more inclusive international tax cooperation in the future.

Leopoldo Parada, International Cooperation on Tax Matters at the United Nations: A Turning Point in History, Caribbean Tax L.J. (forthcoming 2024).

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Understanding the Impact of OECD BEPS Actions on Double Tax Treaties

  • By Akin Akinrinde

This article explores the profound impact of the OECD's BEPS project on double taxation treaties.  It underscores the intricate interplay between the need to curb base erosion and profit shifting while maintaining a conducive environment for global economic activities.

The author purports that measures such as the Principal Purpose Test (PPT), the Limitation on Benefits (LOB), and the redefinition of permanent establishment, mark a significant stride towards aligning taxation with economic substance. These measures, though complex, are instrumental in mitigating the exploitation of tax treaties and ensuring that profits are taxed where actual economic activities and value creation occur.

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The Untold Tale of a Tax Rulings Haven

  • By Leandra Lederman

The “LuxLeaks” scandal revealed numerous secret deals granted by the small country of Luxembourg to large multinational companies. These sweetheart deals occurred in the form of Luxembourg tax rulings, which allowed many name-brand companies to dodge huge amounts of tax that would otherwise be due to the U.S. or other countries. This article explores the origin and aftermath of Luxembourg’s informal tax ruling process and how it became so prolific. The author argues that the amenability of the tax administration, trust in the Luxembourg government, and secrecy were the foundations for attracting major multinational companies to these tax deals.

Leandra Lederman, The Untold Tale of a Tax Rulings Haven, 29 Stan. J.L. Bus. & Fin. (forthcoming 2024).

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Exchange of Information, Tax Confidentiality, Privacy and Data Protection from an EU Perspective

  • By Esther Huiskers-Stoop, Breuer Almut, and Mark Nieuweboer

The call for more transparency in the tax world can hardly be overstated. One of the most prominent ways to achieve tax transparency is the exchange of information between countries. However, achieving a proper balance between the exchange of information, tax confidentiality, and privacy is quite a challenge. In this article, the authors investigate some of these challenges. More specifically, the authors elaborate on the issue of international and European data exchange obligations in light of the privacy provisions of the European Convention on Human Rights.

Esther Huiskers-Stoop, Breuer Almut, & Mark Nieuweboer, Exchange of Information, Tax Confidentiality, Privacy and Data Protection from an EU Perspective, 2 Erasmus L. Rev. 86 (2022).

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Analysis of Developments in EU Capital Flows in the Global Context (2023)

  • By European Commission

This report presents an analysis of the main trends and developments in global and EU capital movements up to mid-2023, focusing on recent developments.

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