https://media.rss.com/taxbeech/feed.xml At present, the Mutual Agreement Procedure (MAP) resolves the tax issues arising from cross-border tax. It has been successful in its attempts to resolve tax matters brought by taxpayers to the competent authorities. But as per the OECD MAP statistics 2020, it is a long-drawn process. https://www.youtube.com/watch?v=j7uX9ZdUgG0&list=PLYkyV5logMkUCUKMAkwesbgVNc7Z2K-9X&index=1 ArbitrationImpact of BEPS on ArbitrationScope of Arbitration … Continue reading Introduction to Arbitration
Category: International Tax
Article 13 of MLI | Exceptions to Permanent Establishment Rule
Article 13 of the MLI modifies Article 5(4) of the OECD Model Tax Convention, which deals with a list of exceptions that do not constitute a Permanent Establishment. The rationale behind creating an exception list is that all activities mentioned in the list have a preparatory or auxiliary character that is not enough to establish … Continue reading Article 13 of MLI | Exceptions to Permanent Establishment Rule
Article 12 of MLI | Avoidance of PE through Commissionnarie Arrangements
A country has a right to tax the income of its residents and the income of PE of non-resident MNEs. However, through a web of tax planning and corporate structures, many large corporates have artificially avoided the establishment of PE through Commissionnarie Arrangements (covered in Article 12 of MLI) and similar strategies. An OECD study … Continue reading Article 12 of MLI | Avoidance of PE through Commissionnarie Arrangements
Article 10 of MLI – PE Triangular Case
Article 10 of the Multilateral Instrument deals with Anti-abuse Rule for Permanent establishments Situated in Third Jurisdictions, commonly known as PE Triangular cases. Before we dwell on it, beginners can view our exclusive post on Triangular cases to understand the concepts better. Provisions of Article 10 of MLI only intend to cover the Triangular cases … Continue reading Article 10 of MLI – PE Triangular Case
Summary of changes to Preamble | Article 6 | MLI
Article 6 of MLI introduces changes in the Preamble of the Covered Tax Agreements. It is a minimum standard as recommended under BEPS Action 6 report. We have discussed in detail the preamble stated under Article 6 of MLI in our previous post. Click here to read it. MLI preamble will be in place of … Continue reading Summary of changes to Preamble | Article 6 | MLI
Elimination of double taxation – Article 5 of MLI
Article 5 of the MLI contains provisions that provide three options for the elimination of double taxation. Countries may choose to address cases of double non-taxation that may where countries use the exemption method to prevent double taxation of income that is not taxed in the State of the source. OECD model convention provides two … Continue reading Elimination of double taxation – Article 5 of MLI
Dual Resident Entities | Article 4 | Complete flowchart
Article 4 of MLI provides a tie-breaker rule for the dual resident entities for determining their tax residence. A company is easily considered tax resident in two different states simultaneously when it registers under one state’s laws but has the place of effective management in another. It is generally understood that a place of effective … Continue reading Dual Resident Entities | Article 4 | Complete flowchart
Covered Tax Agreement | Article 2 Decision Tree
For easy understanding of the applicability of Article 2(1)(a)(ii) of MLI, we present the decision tree diagram (flow chart). It is a quick summary of Article 2 of Multilateral Instrument. As per Article 2(1)(a)(ii) of MLI, the MLI will modify only those double tax agreements that : Each Party has specifically identified and listed in … Continue reading Covered Tax Agreement | Article 2 Decision Tree
Capital Gains from Alienation of Shares or Interests – Article 9 of MLI
OECD Model Tax Convention and the UN Model provide for taxation of capital gains under Article 13. Though it is an essential source of income, the DTAA does not define the term “capital gains.”. Article 9 of the Multilateral Instruments seeks to amend Paragraph 4 of Article 13 of the OECD model tax convention, which … Continue reading Capital Gains from Alienation of Shares or Interests – Article 9 of MLI
Everything about Article 7 of MLI | Treaty Abuse
Multilateral Instrument (MLI) is an instrument that implements tax treaty-related measures of BEPS. Article 7 of MLI is made by the recommendations of OECD and G20 in the BEPS Action 6 Report. Structure of Article 7 of MLI Paragraph 1 of Article 7 Paragraph 1 of Article 7 covers the principal purpose test, where the … Continue reading Everything about Article 7 of MLI | Treaty Abuse