In 1964, a labour agreement was signed between the governments of South Africa and Portugal on behalf of its colony, Mozambique, to regulate the migration of Mozambican mineworkers to South African mines. In terms of this agreement the Mozambican mineworkers who received income on the South African mines were exempt from any taxes on their South African source income. Although outdated, the agreement is still in force today and is used by the South African mines to enter into employment contracts with Mozambican mineworkers. Many countries in the SADC region enter into double taxation agreements for the avoidance of double taxation. The 1964 labour agreement is quite unique as the income received by the Mozambican mineworkers is exempt from tax in South Africa for the duration of the contract (usually up to 18 months) entered into by the Mozambican mineworkers and their South African employers although the source of income is in South Africa. The challenge is whether this agreement should continue as an international agreement and whether it is discriminatory to exempt these mineworkers when compared to other mineworkers in the same position working in South Africa. The purpose of this study is to examine the application of this labour agreement with reference to the South African Income Tax Act and the double tax agreement with Mozambique. It further questions whether this agreement causes a revenue loss and whether or not such loss is justifiable. It further tests whether this agreement is a tax incentive and whether or not it leads to harmful tax competition in violation of the SADC agreement. Finally, the agreement is assessed in light of the discrimination article in the double tax agreement and based on section 9 of the Constitution of the Republic of South Africa. The main conclusion is whether the 1964 labour agreement should continue as an international agreement in the present circumstances as the agreement is fairly outdated and subject to various interpretations which will have an effect on revenue loss to the South African fiscus.

The OECD/G20's Base Erosion and Profit Shifting (BEPS) Project has been described as the most significant international tax initiative post the 2008/2009 global economic crisis. BEPS speaks to companies engaging in aggressive tax planning strategies that exploit loopholes in tax systems to make profits 'disappear' or shift them to tax jurisdictions with little or no overall corporate tax. The BEPS Project has fifteen Actions targeting various formations, computations and permutations that could potentially give rise to BEPS. BEPS Action 5 is entitled "Countering Harmful Tax Practices More Effectively Taking into Account Transparency and Substance" and is of central importance to this minor dissertation. Special Economic Zones (SEZs) are a creature of international trade law that refers to spatially delimited areas within an economy afforded favourable administrative, regulatory and fiscal benefits when compared to the rest of the economy. The term SEZ is used as an 'umbrella' or 'label' encompassing various types of spatially delimited areas with favourable conditions. Examples of SEZs are Free Trade Zones (FTZs) and Export Processing Zones (EPZs). Although this minor-dissertation focuses mainly on tax benefits associated with SEZs, SEZs usually encompasses a wider range of benefits to the companies they host. Such other benefits could include a one-stop shop for setting up and processing work permits. This minor-dissertation examines whether South Africa and Kenya's SEZs create conducive environments for harmful tax practices in light of and as described in BEPS Action 5.

The taxation of cross-border services has for a long time been a contentious topic of discussion across the international tax arena. The controversy of this debate stems predominantly as a result of the long held notion of the permanent establishment as a nexus requirement for source taxation; in a world where global trade, especially in services, can be significantly conducted without the need to establish a prolonged physical presence in the state of source. This is aided by digital technologies and advancements in telecommunications that enable business activities to be carried on remotely. Thus, significant economic activity can take place in a state without meeting the minimum taxable presence required to justify source-based taxation. The problem is that with cross-border transactions between developed and developing countries, where the developing country is typically a capital-importer of services, that developing country will never have the jurisdiction to tax active service-based business income, since the threshold relied on is high, relative to how global trade is conducted today, as it is predominantly dependent on satisfying a physical presence requirement. This study examines the nexus requirements contained in South Africa’s domestic legislation for the taxation of service fee income earned by non-residents. The analysis highlights how the threshold relied on to justify source-based taxation in South Africa is high, since it requires the physical presence of the service provider within the Republic. The study further highlights how South Africa’s policy choice in this regard is akin to a residence-based taxation system, by drawing parallels with the OECD model, which is renowned for its suitability to net capitalexporting and developed economies. Alternative proxies used to tax cross-border services, as noted in the United Nation’s Article 12A, the SADC Model Treaty and the domestic legislation of some BRICS member states, are introduced to the study as comparatives. The general finding hereon is that these alternative nexus requirements are predominantly akin to a policy choice slanted towards source-based taxation, contrasted by the residence-based approach evident in South Arica’s policy choice. Furthermore, the study conducts an analysis of the development of the taxation system in South Africa. The analysis reveals that South Africa’s policy choice to tax active income was largely influenced by the desire to ensure that South African tax laws were internationally compatible at the time when the South African economy was reintegrated with the global economy, postdemocratisation of the Republic. This led to the introduction of the permanent establishment 6 concept into South African domestic law, notwithstanding the knowledge of a not too distant future, where global trade would be conducted via digital technologies and telecommunications, which would render the requirement for physical presence to conduct trade obsolete. The objective of the study is to provide policy recommendations that support a gravitational pull towards more of a territorial-based taxation system. The impact thereof is envisaged to contribute to the strengthening of South Africa’s domestic source rules; the broadening of South Africa’s tax base and the enhancement of the competitiveness of South Africa’s economy.

South Africa experienced an unprecedented growth in its tax treaty network since 1994 as a result of an increase in global trade. In concluding these bi-lateral tax treaties with other countries, South Africa depends primarily on its national model policy during its negotiations with other contracting states. The country’s national tax treaty policy was previously defined in one document, the publication of which has since been discontinued. Apart from Professor C West’s contribution to the global tax community, there is little research information available on the current tax treaty policy of South Africa. It is submitted that the OECD Model and its positions recorded in the commentaries are now widely accepted as the national tax treaty policy of South Africa. The findings of the comparative analysis between the previously documented tax treaty policy and this new widely accepted position of South Africa, suggested that the OECD Model and its recorded positions in the commentaries, subject to a few exceptions, is a fair reflection of South Africa’s national tax treaty policy. It is submitted that South Africa accepted common deviations from its national tax treaty policy when negotiating bi-lateral treaties with countries in the Americas, Asia and Australasia. Previous research failed to provide guidance in this aspect and in an attempt to seek common deviations from South Africa’s national tax treaty policy, a comparative analysis was conducted to identify trends (whether regional or otherwise) in tax treaties with a sample of countries in Asia, Australasia, North America and South America. The findings of this comparative analysis indicated that South Africa successfully applied its national tax treaty policy to a large extend, but does accept common deviations from the policy.

Domestic Resource Mobilisation (DRM) has since 2015's Addis Ababa Action Agenda come to the fore as one of the critical avenues for developing countries to raise the resources required to fund the implementation of the Sustainable Development Goals. However, Illicit Financial Flows (IFFs) continue to undermine these DRM efforts, especially in Africa. Increased transparency in tax through mechanisms such as the cross-border collaboration of tax administrations through the exchange of tax information has been put forward as one of the ways the issue of IFFs can be tackled. The Multilateral Convention on the Mutual Administrative Assistance in Tax Matters (MCAA), as amended by the 2010 protocol, is now the most comprehensive multilateral instrument available for all forms of tax co-operation to tackle tax evasion and avoidance. This is because it is possible to establish an assistance relationship with each jurisdiction signed onto the MCAA on sign-up. Regarding tax information exchange, for countries such as Kenya with a lean network of Agreements for the Avoidance of Double Taxation, the utility cannot be overemphasised. The possibility of this vast amount of information exchange raises the issue of taxpayers' rights in relation to said information. Article 21 of the MCAA provides for the protection of persons and limits to the obligation to assist. However, this protection of rights is pegged on the domestic law provisions of the specific jurisdiction concerned. Thus, by implication, the more robustly taxpayers' rights are protected under a jurisdiction's domestic law, the more confidently requested parties would be in supplying information. This dissertation seeks to analyse Kenya's legislative framework to determine the protection available for taxpayers' rights. The key finding from this analysis is that, save for provisions on the non-disclosure of confidential information, there is a general lack of explicit provisions promoting the protection of taxpayers' rights within taxation legislation. Protection is imputed through the reading of non-taxation legislation. Following this finding, this dissertation provides recommendations of legislative reforms that can be undertaken in order to provide more robust protection of taxpayers' rights.

I use the passage of the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA), which alters the after-tax considerations of foreign internal capital markets, as a quasi-natural experimental setting to test whether a reduction in the tax costs associated with moving foreign capital increased firms' use of holding companies. In separate tests using Compustat and IRS data, I document that firms increase holding company use after TIPRA. Furthermore, I find that firms with the greatest increase in holding companies also increase their post-TIPRA foreign sales and generate more persistent foreign earnings. I interpret these findings to suggest that TIPRA is associated with increased global competitiveness for firms that actively modify their organizational structure. In additional analysis, I attribute this increased global competitiveness to maintained liquidity and capital investments during a financial crisis relative to firms that do not respond as strongly to tax incentives to utilize holding companies.

This thesis examines the income-shifting behaviour of multinational corporations when they are facing international corporate income tax rate differentials. Multinational corporations may apply tax-planning strategies in order to shift their pre-tax profits from a high-tax country to a low-tax country; therefore, the same amount of money would be subject to a lower tax rate. By doing so, multinational corporations minimize their global tax liabilities without changing their total income. The first essay develops a simple general equilibrium model by which to explore the effect of tax planning on the host country in terms of social welfare and optimal taxation. We endogenize multinational corporations’ investment decisions by allowing the user cost of capital to be affected by shifting decisions. We find that if tax rates are not excessively high, then an increase in tax planning activity causes a rise in optimal corporate tax rates, and a decline in multinational investment. Thus, fears of a “race to the bottom” in corporate tax rates may be misplaced. Also, we find that the residents in high-tax countries may be better off with (some) income shifting. We prove that there is an interior optimal thin capitalization rule (a restriction on the debt-to-equity ratio) that is lower than the degree of tax planning preferred by multinational firms. The second essay empirically examines the evidence of income-shifting behaviour of Canadian multinational corporations. The results are consistent with the income-shifting hypothesis that multinationals are inclined to shift their pre-tax profits to low-tax jurisdictions. I find that having non-arm’s length transactions with related parties in tax-haven countries has a significant negative impact on the taxable income that is reported in Canada. Further, I compare the different roles between small havens and large havens and find that the effect of having transactions with small havens is significantly negative, while the effect of having transactions with large tax havens is not significant. Also, I find that if Canadian corporations control their foreign-related corporations with whom they had non-arm’s length transactions, then they are more likely to report lower taxable incomes in Canada than are those that have other types of relationships with their foreign-related corporations.

This thesis examines the income-shifting behaviour of multinational corporations when they are facing international corporate income tax rate differentials. Multinational corporations may apply tax-planning strategies in order to shift their pre-tax profits from a high-tax country to a low-tax country; therefore, the same amount of money would be subject to a lower tax rate. By doing so, multinational corporations minimize their global tax liabilities without changing their total income. The first essay develops a simple general equilibrium model by which to explore the effect of tax planning on the host country in terms of social welfare and optimal taxation. We endogenize multinational corporations’ investment decisions by allowing the user cost of capital to be affected by shifting decisions. We find that if tax rates are not excessively high, then an increase in tax planning activity causes a rise in optimal corporate tax rates, and a decline in multinational investment. Thus, fears of a “race to the bottom” in corporate tax rates may be misplaced. Also, we find that the residents in high-tax countries may be better off with (some) income shifting. We prove that there is an interior optimal thin capitalization rule (a restriction on the debt-to-equity ratio) that is lower than the degree of tax planning preferred by multinational firms. The second essay empirically examines the evidence of income-shifting behaviour of Canadian multinational corporations. The results are consistent with the income-shifting hypothesis that multinationals are inclined to shift their pre-tax profits to low-tax jurisdictions. I find that having non-arm’s length transactions with related parties in tax-haven countries has a significant negative impact on the taxable income that is reported in Canada. Further, I compare the different roles between small havens and large havens and find that the effect of having transactions with small havens is significantly negative, while the effect of having transactions with large tax havens is not significant. Also, I find that if Canadian corporations control their foreign-related corporations with whom they had non-arm’s length transactions, then they are more likely to report lower taxable incomes in Canada than are those that have other types of relationships with their foreign-related corporations.

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75 Resumé v anglickém jazyce a klíčová slova Taxation of income of business companies and their members (comparison of legal regulation in the Czech Republic and the Slovak Republic) My diploma thesis called "Taxation of income of business companies and their members (comparison of legal regulation in the Czech Republic and the Slovak Republic)" focuses mainly on the differences between legal regulation of system of income taxation in the Czech and Slovak Republic. Whereas a business company could be considered solely a legal entity, a member of a business company could be an individual as well. Therefore both areas of income taxation - personal and corporate income tax - are included into the comparison in this diploma thesis. After the introduction the thesis is divided into seven chapters. The first one describes the most important characteristics of particular business companies as they are stipulated in Act No. 513/1991 Coll., Commercial Code, as amended. I have introduced the key features of the most known legal forms of business companies - general partnership, limited partnership, limited liability company and joint stock company. The legal regulation of these types of business companies is similar in the Czech and Slovak Republic. The second chapter deals with legal regulation of both personal and...