Diplomová práce Ondřej Martínek Abstract Tax havens are thorn in the eye of the OECD countries, nonetheless they emerged originally on europian soil and on the ruins of british empire. Classical accusation argues, the tax havens are supposed to earn on luring foreign capital that is enabled to evade taxation and by that they breach the balance of national budgets and tax justice in developed countries, enwiden social imbalance and speed up global tax competition. There are many forms of tax avoidance via tax havens: transfer pricing, holding structures, trusts, foundations or offshore business. Although many of these forms remain illegal, for certain other ones the states are the ones responsible for - e.g. generous web of double tax treaties. Global shortage to national budgets is estimated at around 3% of total revenues. Tax competition exists and global tax rates are in fact decreasing, however national tax revenues are, in absolute terms, rising. Because of this ambiguous effect on global economy and near impossibility to distinguish "real" tax havens, the developed countries are choosing rather careful policy to the tax havens and concentrate on negotiations and concluding TIEA's.

O presente estudo tem por escopo analisar e reconstruir os fundamentos que informam os contornos da emblemática figura dos estabelecimentos permanentes. Muito embora a doutrina e a jurisprudência internacional tenham laborado ingente esforço no sentido de prover um conceito uniforme para tal expressão, sem o qual o legítimo exercício da jurisdição para tributar rendimentos empresariais pode restar prejudicado, ainda há muito o que ser discutido e examinado. Isso porque a economia global, assentada em uma intensa mobilidade de riquezas, evidencia a crescente diversificação das formas de organização empresarial, de modo que a regulação necessária a atender as peculiaridades atinentes a cada modalidade negocial demanda um exame aprofundado e contínuo. Nesse cenário, a clara definição e perfeita compreensão do relevante conceito do estabelecimento permanente, bem como a delimitação dos critérios indispensáveis à sua aplicação, têm cardeal relevância para as modernas relações comerciais. Tal relevância decorre do papel que atribuímos ao estabelecimento permanente neste trabalho, por reputálo enquanto elemento de conexão objetivo, eleito por excelência pelos tratados para evitar a dupla tributação no tocante aos itens de rendimentos empresariais em geral. Tomando como paradigma o modelo de convenção elaborada pela Organização de Cooperação e de Desenvolvimento Econômico, e somando a este os influxos do modelo produzido pela Organização das Nações Unidas, será possível traçar um conceito multifacetado de estabelecimento permanente, com base em determinados critérios classificatórios. Fundados em tais categorias, conduziremos o exame das convenções internacionais firmadas pelo Brasil e analisaremos como os enunciados veiculados por tais instrumentos devem ser operados face ao ordenamento doméstico brasileiro. Com efeito, a tese ora apresentada buscará municiar seus leitores dos instrumentos conceituais necessários para que o conceito de estabelecimento permanente seja aplicado de forma efetiva e coerente com as práticas internacionais. Almeja-se, com isso, traçar algumas propostas para solucionar o afã despertado por problemáticas fiscais suscitadas no bojo do Direito Internacional Tributário, no intuito de contribuir em favor da adoção pelo Brasil de postura mais condizente com os anseios da comunidade internacional. / The scope of this study is to analyze and reconstruct the foundations that outline the emblematic figure of permanent establishments. Although the international doctrine and case law have made great effort to provide such expression with a uniform concept - without which the legitimate exercise of the jurisdiction to tax business income could be impaired - there is still much to be discussed and examined. The global economy, which is based upon intense wealth mobility, attests the increasing diversification of entrepreneurial organization forms, in such a way that proper regulation requires a profound and continuous analysis, in order to meet the needs of the peculiarities of each business modality. Within this context, the clear definition and complete comprehension of this relevant concept (that of permanent establishments), as well as the delimitation of the criteria necessary to its proper application, are of the utmost importance for the modern commercial relations. Such importance derives from the role attributed to the permanent establishment in this essay, considered as an objective connecting factor elected by the double tax treaties in connection with business profits. Using the Model Convention of the Organization for Economic Co-operation and Development as a paradigm, and adding the input from the model elaborated by the United Nations, it will be possible to draw a multifaceted concept of permanent establishment, based upon some specific classificatory aspects. Such categories are the grounds for promoting a survey of the international conventions entered into by Brazil, as well as an analysis on how the norms enacted under such vehicles shall be operated in view of the Brazilian domestic law. In fact, the present thesis aims at providing readers with the necessary conceptual instruments to apply the concept of permanent establishment effectively and coherently with the international law practice. With that, this study elaborates on proposals to solve some tax problems emerged within the framework of the International Tax Law, with the purpose of contributing for the adoption of an approach by Brazil which is more consistent with the aspiration of the international community.

O presente estudo tem por escopo analisar e reconstruir os fundamentos que informam os contornos da emblemática figura dos estabelecimentos permanentes. Muito embora a doutrina e a jurisprudência internacional tenham laborado ingente esforço no sentido de prover um conceito uniforme para tal expressão, sem o qual o legítimo exercício da jurisdição para tributar rendimentos empresariais pode restar prejudicado, ainda há muito o que ser discutido e examinado. Isso porque a economia global, assentada em uma intensa mobilidade de riquezas, evidencia a crescente diversificação das formas de organização empresarial, de modo que a regulação necessária a atender as peculiaridades atinentes a cada modalidade negocial demanda um exame aprofundado e contínuo. Nesse cenário, a clara definição e perfeita compreensão do relevante conceito do estabelecimento permanente, bem como a delimitação dos critérios indispensáveis à sua aplicação, têm cardeal relevância para as modernas relações comerciais. Tal relevância decorre do papel que atribuímos ao estabelecimento permanente neste trabalho, por reputálo enquanto elemento de conexão objetivo, eleito por excelência pelos tratados para evitar a dupla tributação no tocante aos itens de rendimentos empresariais em geral. Tomando como paradigma o modelo de convenção elaborada pela Organização de Cooperação e de Desenvolvimento Econômico, e somando a este os influxos do modelo produzido pela Organização das Nações Unidas, será possível traçar um conceito multifacetado de estabelecimento permanente, com base em determinados critérios classificatórios. Fundados em tais categorias, conduziremos o exame das convenções internacionais firmadas pelo Brasil e analisaremos como os enunciados veiculados por tais instrumentos devem ser operados face ao ordenamento doméstico brasileiro. Com efeito, a tese ora apresentada buscará municiar seus leitores dos instrumentos conceituais necessários para que o conceito de estabelecimento permanente seja aplicado de forma efetiva e coerente com as práticas internacionais. Almeja-se, com isso, traçar algumas propostas para solucionar o afã despertado por problemáticas fiscais suscitadas no bojo do Direito Internacional Tributário, no intuito de contribuir em favor da adoção pelo Brasil de postura mais condizente com os anseios da comunidade internacional. / The scope of this study is to analyze and reconstruct the foundations that outline the emblematic figure of permanent establishments. Although the international doctrine and case law have made great effort to provide such expression with a uniform concept - without which the legitimate exercise of the jurisdiction to tax business income could be impaired - there is still much to be discussed and examined. The global economy, which is based upon intense wealth mobility, attests the increasing diversification of entrepreneurial organization forms, in such a way that proper regulation requires a profound and continuous analysis, in order to meet the needs of the peculiarities of each business modality. Within this context, the clear definition and complete comprehension of this relevant concept (that of permanent establishments), as well as the delimitation of the criteria necessary to its proper application, are of the utmost importance for the modern commercial relations. Such importance derives from the role attributed to the permanent establishment in this essay, considered as an objective connecting factor elected by the double tax treaties in connection with business profits. Using the Model Convention of the Organization for Economic Co-operation and Development as a paradigm, and adding the input from the model elaborated by the United Nations, it will be possible to draw a multifaceted concept of permanent establishment, based upon some specific classificatory aspects. Such categories are the grounds for promoting a survey of the international conventions entered into by Brazil, as well as an analysis on how the norms enacted under such vehicles shall be operated in view of the Brazilian domestic law. In fact, the present thesis aims at providing readers with the necessary conceptual instruments to apply the concept of permanent establishment effectively and coherently with the international law practice. With that, this study elaborates on proposals to solve some tax problems emerged within the framework of the International Tax Law, with the purpose of contributing for the adoption of an approach by Brazil which is more consistent with the aspiration of the international community.

La crise financière de 2008 et l’accroissement considérable de l’endettement public qui en a résulté ont mis au centre des priorités politiques contemporaines la nécessité de veiller à un alignement entre la fiscalité internationale et la création de valeur. Cette contemporanéité de l’enjeu ne doit pas occulter la redondance de ses causes avec celles qui ont présidé à la mise en place des premiers modèles de conventions fiscales bilatérales durant l’entre-deux-guerres sous l’égide de la Société des Nations. L’étude des travaux de l’organisation durant les années 1920 ainsi que de leur reprise par l’OECE puis l’OCDE au cours de la seconde moitié du XXème siècle permet de constater que l’ordre fiscal international actuel repose sur une logique d’alignement de la répartition de la matière taxable avec la géographie de la création de valeur. L’étonnement que suscite cette constatation lorsqu’elle est mise en perspective avec les critiques faites au système fiscal international actuel invite plus que jamais à étudier les rapports qu’entretient ce dernier avec la création de valeur : leurs connexions, leurs déconnexions, et les tentatives de reconnexions dont ils font l’objet. / The 2008 financial crisis and the resulting significant increase in public debt have put the focus of today's political priorities on the need to tax profits in accordance with value creation. The topicality of this issue must not overshadow the striking similarity of its causes with those that led to the drafting of the first model tax treaties in the 1920s under the aegis of the League of Nations. A study of the organisation's work, built on by the OEEC, and the OECD in the second half of the 20th century, shows that the current international tax system already tends to align jurisdiction to tax with value creation. This observation is surprising when put in perspective with the criticisms of the current international tax order. It invites us more than ever to study the relationship between the international tax system and value creation: their connections, their disconnections, and the attempts to reconnect them.

Notion de revenu et de perte Compensation des pertes et annualité de l'impôt Compensation des pertes et territorialité de l'impôt Analyse comparative des législations belge, française et néerlandaise Notion of income and loss Loss compensation and principle of annuality Loss compensation and territoriality Comparative analysis of the Belgian, French and Dutch tax legislations

It was assumed in the mid 1990s that 60% of all global trade took place within a group of enterprises. With increased globalisation leading to an increase in mergers and acquisitions this figure is most likely higher. Thus intra-company and intra-group transactions form a major part of business. These transactions, due to the association between the enterprises, may not always reflect the conditions that a market with independent actors would dictate. There are various reasons for this, which include not only tax considerations but also difficulties in establishing conditions that reflect those that inde-pendent companies would apply, in other words conditions in accordance with the arm’s length principle. In cases where these conditions are not in accordance with what the state considers as an arm’s length price, the profits of the enterprise located in that state may be adjusted for taxation purposes under transfer pricing provisions. The complexity of transfer pricing rules and the various methods for establishing an arm’s length price result in different interpretations and increased uncertainty for multinational enterprises that often face different rules for determining a correct transfer price. Therefore, enterprises may often face transfer pricing adjustments of their profits due to the complexity and differences in transfer pricing legislation. Transfer pricing adjustments potentially lead to unresolved double taxation, in fact business reports have indicated that 42% of the transfer pricing adjustments lead to double taxation. Therefore it is imperative to have legal mechanisms that resolve potential double taxation. The Convention on the Elimination of Double Taxation in Connection with the Adjustment of Profits of Associated Enterprises (Arbitration Convention) was adopted to give the multinational enterprises, facing double taxation due to adjustments of their profits, a remedy that obliged the states to resolve the double taxation. This was the first, and is still the only, EC-wide mechanism that technically guarantees that transfer pricing double taxation is resolved and thus holds a great improvement over other existing mechanisms to resolve double taxation. The Arbitration Convention was originally a proposed EC Directive but was transformed into a intergovernmental convention. This has resulted in that the European Court of Justice (ECJ) has no jurisdiction to interpret the Arbitration Convention or its application. Furthermore there is no supranational or international organ that could take action against states that interpret or apply the Conven-tion in an unintended manner. The chosen legal form has also resulted in different interpretations as to what status the Arbitration Convention has compared to bilateral tax conventions, and thus whether it precedes them. This could prove troublesome when future bilateral treaties are concluded or where there already exist tax treaties that have different solutions to transfer pricing related double taxation. The risk of the Convention being interpreted differently is greatly increased by the various undefined terms and lack of precise provisions in the Convention. Therefore, the Convention has been subject to an inconsistent application and interpretation from the date it came into effect in 1995. The Convention was only given a five year life span, after which it was destined to be renewed if the contracting states so expressed, involving the same ratification process as at the initial acceptation of the Convention. However, as this was inefficient, a Prolongation Protocol was signed to amend the Convention with an automatic extension of its life. As it took till 2004 for this Protocol to be ratified and finally enter into force on 1 November 2004 it created one of the main interpretation and application differences in the life of the Convention. The function of the Convention’s procedures and thus its efficiency in resolving double taxation is impeded by the numerous interpretation differences and lack of precise pro-visions in the Convention. The fact that there is no way to guarantee that the provisions of the Convention are precisely followed, partly since there are uncertainties regarding the precise interpretation but also partly since there is no organ that could enforce a uniform application of the Convention, further impedes the efficiency of the Convention, which is clearly seen in practice. Another question of interpretation and application raised is that, although the Convention was originally intended as a means for resolving transfer pricing related double taxation, there have been arguments that the Convention could apply to double taxation due to provisions concerning thin capitalisation as well. These provisions bring about similar conditions as those the Convention requires for its applicability and, although a different area of law, the connections in the conditions are many and undeniable.

The current United States tax code regarding foreign sourced income is outdated for a heavily globalized and interconnected world. Multinationals have played certain games with the tax code to lower their domestic and foreign tax bill. This form of tax avoidance has real economic effects that are leading to non-optimal economic outcomes. This paper will begin by offering examples of how multinationals are avoiding taxes, especially in the pricing of intangible assets. Other countries have adopted different ways to tax foreign profits; notably most countries either have a worldwide non-deferral tax system or a territorial tax system. There are costs and benefits associated with both systems of taxation that must be considered before adoption. Ultimately, this paper will conclude that a territorial tax system combined with an overhaul of the current rules regarding transfer pricing will lead to a better economic outcome than the current U.S. system of taxation.

Establishment in foreign countries can be achieved through a subsidiary company or a permanent establishment. Profit of a subsidiary company is normally taxed in accordance with the law of the country of where it is established, since a subsidiary company constitutes a separate legal entity. A permanent establishment on the other hand is not a separate legal entity, therefore profit in a permanent establishment is usually added on to the company’s total profit and taxed in accordance with the law of the country of where the company is established. Establishing business activities in foreign countries do normally not create problems, unless the business is carried on in a low tax jurisdiction. If that is the case, unlimited opportunities are created for companies to circumvent domestic taxation by transferring profit to the low tax jurisdiction, which in turn decreases the domestic tax base. In Sweden this kind of circumvention is precluded by chapter 39a ITA, in the meaning that a shareholder in a foreign company can be tax liable of low taxed profit in a foreign. The question that arises is whether chapter 39a ITA infringes on freedom of establishment. The outcome in the analysis is that there is a likeliness that chapter 39a ITA constitutes a restriction on the freedom of establishment. The escape provided in article 52 TFEU cannot justify the measure. Nor is it likely that the measure can be justified by the rule of reason. In the light of the assessment done in the analysis, it can be concluded that the chapter 39a ITA is applied in a non-discriminatory manner, satisfies a mandatory requirement (prevention of tax avoidance) and is regarded as appropriate in securing the achievement of the objectives. But there is a potential risk that measure will fail in the proportionality test.

Tax treaty protection from international double taxation only goes as far as the treaty's substantive scope. Nations worldwide have adopted the text of Article 2 of the OECD Model Double Taxation Conventions (headed Taxes covered) in concluding bilateral treaties to prevent double taxation in the area of taxes on income and capital and taxes on estates, inheritances, and on gifts. The wording and structure of Article 2 give rise to a host of ambiguities, creating uncertainty for taxpayers regarding the taxes that come within treaty scope. A research strategy that draws on historic materials documenting the development of Article 2 throughout the League of Nations, OEEC, and OECD seeks to shed light on a provision that has retained its basic format and wording since the 1920s. Recent case law and academic literature are analyzed to gain a clearer picture of the common international concepts expressed in tax treaties that use the formulations proposed in the OECD Model Conventions. The research strategy, conceptual models, and proposed results aim to contribute to the understanding of the "taxes covered" and to guide subsequent research and heighten awareness of problems in the interpretation and application of the provision on substantive scope in tax treaties.(author's abstract)

<p>It was assumed in the mid 1990s that 60% of all global trade took place within a group of enterprises. With increased globalisation leading to an increase in mergers and acquisitions this figure is most likely higher. Thus intra-company and intra-group transactions form a major part of business. These transactions, due to the association between the enterprises, may not always reflect the conditions that a market with independent actors would dictate. There are various reasons for this, which include not only tax considerations but also difficulties in establishing conditions that reflect those that inde-pendent companies would apply, in other words conditions in accordance with the arm’s length principle. In cases where these conditions are not in accordance with what the state considers as an arm’s length price, the profits of the enterprise located in that state may be adjusted for taxation purposes under transfer pricing provisions.</p><p>The complexity of transfer pricing rules and the various methods for establishing an arm’s length price result in different interpretations and increased uncertainty for multinational enterprises that often face different rules for determining a correct transfer price. Therefore, enterprises may often face transfer pricing adjustments of their profits due to the complexity and differences in transfer pricing legislation. Transfer pricing adjustments potentially lead to unresolved double taxation, in fact business reports have indicated that 42% of the transfer pricing adjustments lead to double taxation. Therefore it is imperative to have legal mechanisms that resolve potential double taxation.</p><p>The Convention on the Elimination of Double Taxation in Connection with the Adjustment of Profits of Associated Enterprises (Arbitration Convention) was adopted to give the multinational enterprises, facing double taxation due to adjustments of their profits, a remedy that obliged the states to resolve the double taxation. This was the first, and is still the only, EC-wide mechanism that technically guarantees that transfer pricing double taxation is resolved and thus holds a great improvement over other existing mechanisms to resolve double taxation. The Arbitration Convention was originally a proposed EC Directive but was transformed into a intergovernmental convention. This has resulted in that the European Court of Justice (ECJ) has no jurisdiction to interpret the Arbitration Convention or its application. Furthermore there is no supranational or international organ that could take action against states that interpret or apply the Conven-tion in an unintended manner. The chosen legal form has also resulted in different interpretations as to what status the Arbitration Convention has compared to bilateral tax conventions, and thus whether it precedes them. This could prove troublesome when future bilateral treaties are concluded or where there already exist tax treaties that have different solutions to transfer pricing related double taxation.</p><p>The risk of the Convention being interpreted differently is greatly increased by the various undefined terms and lack of precise provisions in the Convention. Therefore, the Convention has been subject to an inconsistent application and interpretation from the date it came into effect in 1995. The Convention was only given a five year life span, after which it was destined to be renewed if the contracting states so expressed, involving the same ratification process as at the initial acceptation of the Convention. However, as this was inefficient, a Prolongation Protocol was signed to amend the Convention with an automatic extension of its life. As it took till 2004 for this Protocol to be ratified and finally enter into force on 1 November 2004 it created one of the main interpretation and application differences in the life of the Convention.</p><p>The function of the Convention’s procedures and thus its efficiency in resolving double taxation is impeded by the numerous interpretation differences and lack of precise pro-visions in the Convention. The fact that there is no way to guarantee that the provisions of the Convention are precisely followed, partly since there are uncertainties regarding the precise interpretation but also partly since there is no organ that could enforce a uniform application of the Convention, further impedes the efficiency of the Convention, which is clearly seen in practice.</p><p>Another question of interpretation and application raised is that, although the Convention was originally intended as a means for resolving transfer pricing related double taxation, there have been arguments that the Convention could apply to double taxation due to provisions concerning thin capitalisation as well. These provisions bring about similar conditions as those the Convention requires for its applicability and, although a different area of law, the connections in the conditions are many and undeniable.</p>