Tag: Multilateral instruments

Introduction to Arbitration

 

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 →

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 →

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 →

Everything about Simplified Limitation of Benefits | SLOB Test

 

Simplified Limitation of Benefit (SLOB), also known as Specific Anti-Abuse Rules, is one of the three alternative rules provided in the BEPS Action 6 Report on Preventing the tax treaty benefits in inappropriate circumstances. Simplified Limitation of Benefits is an objective test to define the normative criteria and attributes that determine whether the income recipient … Continue reading Everything about Simplified Limitation of Benefits | SLOB Test →

Principal Purpose Test | Paragraph 1 of Article 7 of MLI

 

BEPS Action 6 Report on Preventing the tax treaty benefits in inappropriate circumstances includes three alternative rules to address situations of treaty abuse. Firstly, a general anti-abuse rule (GAAR) is based on the principal purpose of transactions or arrangements. The second a simplified version of specific anti-abuse rules (SAAR), and the third a detailed version … Continue reading Principal Purpose Test | Paragraph 1 of Article 7 of MLI →

Article 6 of MLI – Purpose of Covered Tax Agreement

 

Article 6 of MLI provides the preamble and purpose of the Covered Tax Agreement. BEPS Action 6 acknowledges that preamble is an essential source for interpreting treaties as the same provides clear intent or a rationale that persuaded two countries to enter into a treaty. According to the basic rule of interpretation of treaties in … Continue reading Article 6 of MLI – Purpose of Covered Tax Agreement →

Article 5 of Multilateral Instruments | Application of Methods for Elimination of Double Taxation

 

In a typical scenario, the State of residence has the right to tax the resident taxpayer’s global income, and the State of the Source has the right to tax the taxpayer on the income received/derived by him from the State of the Source. Accordingly, the taxpayer is subject to taxation in both the State of … Continue reading Article 5 of Multilateral Instruments | Application of Methods for Elimination of Double Taxation →