Rethinking International Tax Law MOOC

Tax planning & ethical dimensions

The final week of the “Rethinking International Tax Law” course goes beyond the technical aspects of tax planning previously discussed, exploring those practices from an ethical perspective. To achieve that goal, the lecture videos consist of interviews, made in March and April 2015, with stakeholders in the tax planning debate, where they present their positions and what they perceive as key ethical issues. The OECD perspective Pascal Saint-Amans The first interviewee is Pascal Saint-Amans, Director of the Centre for Tax Policy and Administration at the OECD.

European Union law and state fiscal aid

Week 5 presents the actions taken within the European Union to neutralise the effects of international tax planning by multinationals. It also discusses how EU law and rulings from the European Court of Justice may limit domestic and international initiatives for countering tax planning practices. The stated goals of EU policy include acheiving the “four freedoms”: free movement of goods, services, persons and capital within the internal market. It also aims to produce a level playing field within that market and harmonise national laws.

Transfer Pricing

Week 4 concerns itself with transfer pricing techniques used to allocate the profit made by a group of companies to the individual group members. Barnhouse et al. (2012) present a definition of transfer price as the price an organization must charge or pay to transfer goods from one subsidiary or internal branch to another segment of the same organization. Transfer prices are relevant for companies that operate within a single country, as they transfer products between subsidiaries, but the factors involved in transfer pricing calculations involving multinational enterprises (MNEs) involve many additional factors, since governments are entitled to adjusting the prices on international transfers according to the arm’s length principle.

Principles of international taxation & tax treaties

Module 3 looks at the international aspects of corporate tax law systems and international tax law. International taxation depends on a country having sufficient connection to the taxed company. That nexus is usually established through one of three principles: the nationality principle, based on incorporation of a company under the legal requirements of a country (usually commercial law); the residence principle, based on establishment of a company’s effective management on that coutnry; and the source principle, which is based on the existence of significant activity of a company in a given country Overlaps and ommissions on those criteria may lead to scenarios of double taxation or double non-taxation.

Design of Corporate Tax Law Systems

The required reading for this week is a general overview of taxation of income derived from business profits. Since business activities come in many different shapes and sizes, a business tax system must deal with a multitude of possible cases. Profits of incorporate businesses are usually taxed under a separate corporate income tax. Dividends may be also taxed at an individual level, as may the profits from unincorporated businesses and self-employed people.

Rethinking International Tax Law, Lecture 1

I recently started the Rethinking International Tax Law MOOC on Coursera, offered by Universiteit Leiden. This post is the first of what should be a series containing my notes on the weekly content covered by the course. Course Structure Week 1: Building a base case from real tax structures Week 2-5: Analysis of the base case’s building blocks. Week 2: Design of Corporate Tax Law systems Week 3: Principles of international taxation & tax treaties Week 4: Transfer pricing Week 5: European Union law and Fiscal State Aid Week 6: Ethical issues of international tax planning.