Treaty Shopping can be defined as the "abuse" of tax conventions; it is a major international taxation topic. Its importance is increasing since the beginning of the 80's and the enactment of specific anti treaty shopping measures. / Those specific measures are the purpose of this thesis. Is treaty shopping a solved problem? Are those measures, taken principally by the undisputed leader of this policy, the United States, entirely efficient? / In order to answer those questions, a brief study of the phenomenon of treaty shopping is needed. The first part of this thesis deals with this issue. / The measures themselves are analyzed in the second part. Basically, we can classify them in two categories, the national and the limitation on benefits incorporated in tax conventions. Both of them present weaknesses and approximations. In those circumstances, it would be difficult to admit the end of treaty shopping. Moreover, those measures have raised new problems that must be addressed firstly in order to envisage an end to the practice of treaty shopping.

South Africa has a residence based system of taxation in which South African tax residents are taxed on their worldwide income. A company or other artificial person is regarded as a South African resident for tax purposes if it is incorporated, established or formed in South Africa or if its ‗effective management‘ is located in South Africa. Where a tax treaty determines in terms of its tie breaker rule that an artificial person is not resident in South Africa for treaty purposes, the company will also not be regarded as a tax resident in terms of South African domestic law. Treaties to which South Africa is party will often use the effective management‘ as the tie-breaker where a person other than an individual is resident in both Contracting states in terms of the respective states‘ domestic laws. The tests of ‗incorporation, established and formed‘ provide simplicity and certainty to governments but are easily open to manipulation by taxpayers. Therefore, the legislature found it necessary to incorporate effective management‘ as a test for residency into the Act. Effective management‘ is a substance over form concept which be described as a function which embodies the periodic, most senior executive management functions, which are required for the management of the affairs of the entity as whole. The test of effective management‘ by its very nature is concerned with where the crucial decisions are made in order to make a business function. To identify the location of effective management‘ it is necessary to enquire who calls the shots‘ in the context of the management of the company as opposed to who controls the company notwithstanding that there may in certain instances be overlap between the two functions. It is submitted that any person who, on the face of it seems unconnected to a company, could effectively manage‘ a company if that person is, in substance, responsible for the most senior executive management functions of the company. The discussion paper issued by SARS recognises the principal difficulties experienced with its current interpretation of the concept and makes valuable points, concessions and recommendations. It also recognised that the 'calling of shots' by the most senior executive is a critical marker of effective management‘ and that control of a company is irrelevant in determining effective management‘. To determine who effectively manages‘ a company each situation would have to be analysed on its own as it is not possible to create a definitive rule on the concept. In many cases the nature of the entity and its modus operandi would have to be taken into account to determine effective management.

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M.Com. (South African and International Taxation) / International tax treaties are unique bilateral negotiations effectively breaking down the barriers of international trade while aiming to eliminate double taxation and prevent fiscal evasion. The implementation of these negotiated tax treaties is a matter of domestic law, once concluded a contracting state is free to use domestic legislation to tax the income allocated through the these tax treaties. There is however, no external enforcement of these agreements and as a result disputes occur. The remedy proposed by both the OECD MTC and the UN MTC is what we know as MAP. MAP is a non-binding, non-compulsory dispute resolution mechanism developed in the early 20th century. Even though many jurisdictions remain of the view the MAP is a successful method of dispute resolution, others feel that it has significant shortcomings as outlined by the JWG established by the OECD in 2003. As a result of the work done by the JWG and in an attempt to address some of the insufficiencies of the MAP the OECD introduced additional articles to the MTC including guidelines on non-binding arbitration. The UN subsequently introduced similar guidelines in its MTC. The introduction of mandatory arbitration into both these MTCs is the most significant development in the resolution of international tax disputes. However, the increased complexity and volume of international trade undoubtedly results in tax implications that are not currently addressed in tax treaties or conventions. Differences in the interpretation of the underlying facts of those trade transactions may lead to a host of international tax disputes, often resulting in juridical double taxation. With MAP being the only remedy available, this study aims to determine whether or not the MAP in its current form, is an effective international dispute resolution mechanism or whether further developments are still required.

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This study proposes to analyze the phenomenon of tax treaty abuse and the use of tax treaties as tools to avoid or minimize the taxation by residents doing business in a foreign jurisdiction. This study analyses a particular strategy using tax treaties known as "treaty shopping." This paper will argue that treaty shopping constitutes an abuse of the tax treaty regime. However, this study rejects the traditional arguments against treaty shopping and proposes a different basis to challenge the legitimacy of this practice and to explain why this strategy constitutes an improper use of tax treaties.

Canada and Taiwan have not entered into a tax treaty. Consequently, because each jurisdiction uses different connecting factors, that is 'residence' in Canada and 'income source' in Taiwan, double taxation may occur for individuals subject to tax in both jurisdictions. With the increasing number of Taiwanese immigrants to and investors in Canada, double taxation is becoming a significant problem. A treaty is probably the most efficient mechanism to resolve the double taxation problem. However, the political issue is how can a nation (Canada) enter into a treaty with a jurisdiction (Taiwan) that it does not recognize as a nation state? Despite facing the same problem, on May 29, 1996 Australia signed a tax agreement with Taiwan concerning the avoidance of double taxation and the prevention of tax evasion. The Australia-Taiwan Tax Agreement is unique because it was signed by two private sector organizations rather than by the respective governments. Using the same mechanism, New Zealand and Vietnam have signed tax agreements with Taiwan as well. This thesis analyses the likelihood of Canada entering into a tax treaty with Taiwan. In so doing, it considers how double taxation arises, reviews the foreign reporting rules and argues that a tax treaty between Canada and Taiwan is desirable. The conclusion is that, theoretically and pragmatically, a tax treaty (or agreement) between Canada and Taiwan is possible and needed in order to relieve punitive double taxation and to facilitate bilateral economic and trading relations between the two jurisdictions.

Canada and Taiwan have not entered into a tax treaty. Consequently, because each jurisdiction uses different connecting factors, that is 'residence' in Canada and 'income source' in Taiwan, double taxation may occur for individuals subject to tax in both jurisdictions. With the increasing number of Taiwanese immigrants to and investors in Canada, double taxation is becoming a significant problem. A treaty is probably the most efficient mechanism to resolve the double taxation problem. However, the political issue is how can a nation (Canada) enter into a treaty with a jurisdiction (Taiwan) that it does not recognize as a nation state? Despite facing the same problem, on May 29, 1996 Australia signed a tax agreement with Taiwan concerning the avoidance of double taxation and the prevention of tax evasion. The Australia-Taiwan Tax Agreement is unique because it was signed by two private sector organizations rather than by the respective governments. Using the same mechanism, New Zealand and Vietnam have signed tax agreements with Taiwan as well. This thesis analyses the likelihood of Canada entering into a tax treaty with Taiwan. In so doing, it considers how double taxation arises, reviews the foreign reporting rules and argues that a tax treaty between Canada and Taiwan is desirable. The conclusion is that, theoretically and pragmatically, a tax treaty (or agreement) between Canada and Taiwan is possible and needed in order to relieve punitive double taxation and to facilitate bilateral economic and trading relations between the two jurisdictions. / Law, Peter A. Allard School of / Graduate

The topic of this thesis is the phenomenon of international double taxation. Collection of taxes is a manifestation of state sovereignty. Each state lays down its own rules determining which persons and economic facts will be subject to taxation. As a result a situation may occur that more states claim the right to impose a tax of comparable nature on the same fact and entity. Such situations ordinarily occur in connection with cross-border labour mobility, international investments, and in many other cases. Double taxation is a burden for taxpayers and represents a barrier to international movement of persons and capital. States may provide relief to taxpayers by unilateral measures. However, a more effective instrument for the avoidance of double taxation is international cooperation. The 20th century saw the development of international treaties on avoidance of double taxation, which have a privileged position in the tax law. These treaties not only serve as a relief to taxpayers, but are also the basis of comprehensive cooperation in tax collection. Therefore, this thesis focuses on double taxation treaties, which are currently the most effective tool for resolving a conflict of tax laws of different states. The thesis firstly deals with the treaties on avoidance of double taxation in general...

01 Double tax treaties aim to prevent double taxation. Double taxation of income is an undesirable phenomenon from the taxpayers' point of view. The most widespread way of preventing it is through bilateral agreements concluded between states under the OECD Model Agreement. In general, a prerequisite of taxation is either tax residency or the existence of a permanent establishment, which can take various forms. Double taxation treaties and the concept of a permanent establishment in which this master thesis is dedicated, have undergone a dynamic transformation over the past few years due to both Base Erosion and Profit Shifting reports (BEPS) and the Multilateral Instrument by OECD (MLI). This transformation is demonstrated in this thesis by comparing selected provisions of the OECD Model Agreement 2014 and 2017. This thesis addresses the current question of whether the current development of tax treaties is to avoid double taxation or avoid double non-taxation and artificial tax reduction. Double tax treaties, as practice shows, fulfill their traditional role. The first chapter deals with the system of national and international taxation in general. The second chapter deals with the issue of double taxation, methods of its avoidance and comparison of versions of the OECD Model Agreement 2014 and 2017. The...