A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, Johannesburg, in partial fulfilment of the requirements for the degree of Master of Commerce (specialising in Taxation) / According to South African domestic law, the term ‘place of effective management’ is ‘one of the tests used to determine the residency of a person, other than a natural person’ (South African Institute of Tax Practitioners, 2010, p.549). The term ‘place of effective management’ is not defined in the South African Income Tax Act 58 of 1962 and there is very limited case law in South Africa which deals specifically with the matter. In an attempt to clarify the term, the South African Revenue Service issued Interpretation Note 6: Resident: Place of effective management (persons other than natural persons) (2002) where, as noted by Olivier and Honiball (2008, p.82), ‘emphasis is placed on where important decisions are implemented and not where such decisions are taken’ as the ‘place of effective management’. This is contrary to international guidelines, which typically focus on where important decisions are taken (Olivier and Honiball, 2008, p.75). Key Words: Board of directors, central management and control, control, day-to-day decisions, Discussion Paper on Interpretation Note 6, Interpretation Note 6, key decision making, OECD Model Tax Convention, place of effective management

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No abstract / Mini Dissertation (LLM)--University of Pretoria, 2017. / Mercantile Law / LLM / Unrestricted

A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, Johannesburg, in partial fulfilment of the requirements for the degree of Master of Commerce (specialising in Taxation). / There has been significant advances in the international arena with regards to global economic growth and trade, as well as enormous competition by countries to attract inward foreign direct investment from multinational enterprises (MNEs) to ensure the sustainability of their own economies. Fundamentally the contentious issue is the possibility of double taxation (DT), due to the dual residency of the MNE. The MNE operates in various markets which results in cross-border transactions, whether physical or electronic, and this ultimately means that different tax jurisdictions will become applicable and enforceable by each relevant country. These dual resident MNEs could be seen as a tax resident in both countries and thus be liable for tax obligations in both of these countries. This would therefore lead to the same income incurring DT or double non-taxation (DNT), which would have a devastating impact on that MNE. This lead to the establishment of double taxation treaties, agreements and conventions (DTA’s), between various countries which are aimed at addressing this imbalance. As technology advances at an alarming rate, so too does the possibility of abuse of tax treaties. Two important criteria are ‘the place of effective management’ (POEM) and the ‘permanent establishment’ (PE), which are critical to the determination of the correct tax jurisdiction where the dual resident MNE will incur various tax liabilities. These concepts, POEM and PE, can be confusing but are imperative, in order to prevent DT, and which could prejudice the relevant fiscus, as well as an attempt to avoid any conflict between the taxing regimes. An interesting facet of the POEM and PE conundrum is the interpretation by the Organisation for Economic Co-operation and Development’s (’the OECD’) Model Tax Convention (MTC) compared to the interpretations by the South African Revenue Service (SARS). Another area of contention for MNEs is the current enormous global focus on the concept of Base Erosion and Profit Shifting (BEPS), which is under great scrutiny, and is of great concern for the majority of revenue authorities. These authorities are intensifying their focus on improving and enforcing anti-avoidance provisions to prevent taxation leakage in their respective tax jurisdictions. This shift in priorities opposes one of a MNE’s main business objectives which is to maximize profits, by either diverting, extracting and/or distributing profits out of a high tax paying jurisdiction into a lower tax paying jurisdiction. This will consequently create an additional business risk which emphasises the need for international tax expertise. The international tax expert is a valuable business team member, as their knowledge and expertise is imperative for the mitigation of possible tax risks, correct interpretation and application of the relevant tax legislation on the business flows of the MNEs as a result of operational expansion or any cross-border transactions or activities. Key Words: Taxation, Tax Treaties, Agreements, BEPS, Conventions; Cross-border, Double Taxation; Dual Residency; International tax, Multinational enterprises; Permanent Establishment, Place of Effective Management; OECD Model Tax Convention; Tax Intelligence, Tax Jurisdictions

The aim of this work is to evaluate the development of Article 15 Income from Employment of the OECD Model Tax Convention on Income and on Capital, especially with the accent on the Commentary of this article. Furthermore, to analyze, with the assistance of selected double tax treaties concluded by the Czech Republic, whether the Czech Republic, thus the Ministry of Finance, Ministry of Foreign Affairs and the General Directorate of Finance, follow the trend in the development of Model Tax Convention and apply it to the newly concluded double tax treaties, i.e. whether the institutions listed above accept the OECD Model Tax Convention and its Commentary as an interpretative regulation to be followed when concluding double tax treaties with both OECD member countries and with non-member countries.

práce v anglickém jazyce International double taxation International taxation is a very large topic. It is possible to write hundreds of pages about this subject but there will still be many problems which will be waiting for their solution. This theme is also very interesting and in this time very actual. I am sure that importance of international taxation will be highly raising in the future. This is caused by high intensity of the mobility of people and corporations, capital, services, and property but on on the other side it is caused also by still higher and higher number of tax evasions. The states are then forced to make a larger effort in cooperation between them and also to try to prevent the tax evasions. Double taxation agreements should be considered as a good solution for prevention of tax evasions and also mainly only these treaties can assure fair distribution of paid taxes between the states. It wasn't possible to make comprehensive analysis of this large subject in this relatively short thesis. So I decided to focus only on some issues of international double taxation. I was trying to choose issues which make often problems in application or issues which I am considering as very interesting. Sometimes the work on my thesis was not easy because of high number of different opinions....

The main topic of this thesis is double taxation - the issue which gets more and more important, because national economies are going to be connected and international business develops, double taxation affects these activities strongly. Double taxation is considered to be negative phenomenon not only by private sector, but even states, so we can detect efforts for elimination or even reduction of this negative phenomenon. Because double taxation is very large topic it is not possible to cover it comprehensively, this diploma thesis is reduced only to some spheres and institutions of double taxation. The thesis is composed of three main parts. Theoretical introduction to the issue of double taxation mentiones the most important terms and principles of the double taxation and constitutes the basic for the following interpretation. Meaned are methodes and means used to eliminate double taxation with the practical example of their use and their comparison. The second chapter deals with internal aspects of double taxation and focuses on the Czech and EU legislation of double taxation. Attention is also paid to the Czech future double taxation elimination legislation of income from shares in profits and from similar profits and to its' consequences. The third chapter is concerned with international...

The purpose of this thesis is to examine whether the concept of permanent establishment, as defined in Article 5 of the OECD Model Tax Convention on Income and Capital, is applicable to electronic commerce and if so whether the current definition is able to appropriately deal with the challenges of electronic commerce. In 2003, the OECD added a new section to the Commentary on the Model Tax Convention on Article 5. The new section is a clarification on the application of the permanent establishment definition in electronic commerce. The current definition of permanent establishment in the Model Tax Convention relies on the physical presence of a foreign corporation as the threshold for source taxation. While the current definition, prima facie, might be applicable on electronic commerce, the highly mobile nature of electronic commerce might affect the current revenue distribution equilibrium between states.

<p>The purpose of this thesis is to examine whether the concept of permanent establishment, as defined in Article 5 of the OECD Model Tax Convention on Income and Capital, is applicable to electronic commerce and if so whether the current definition is able to appropriately deal with the challenges of electronic commerce.</p><p>In 2003, the OECD added a new section to the Commentary on the Model Tax Convention on Article 5. The new section is a clarification on the application of the permanent establishment definition in electronic commerce.</p><p>The current definition of permanent establishment in the Model Tax Convention relies on the physical presence of a foreign corporation as the threshold for source taxation. While the current definition, <em>prima facie</em>, might be applicable on electronic commerce, the highly mobile nature of electronic commerce might affect the current revenue distribution equilibrium between states.</p>

Ziel der vorliegenden Arbeit ist es, auf der Grundlage des OECD-Musterabkommens für einen in Deutschland unbeschränkt einkommensteuerpflichtigen Gesellschafter die steuerliche Behandlung einer Beteiligung an einer ausländischen intransparent besteuerten Personengesellschaft zu untersuchen. Auf der Grundlage dieser Ergebnisse wird geprüft, ob und gegebenenfalls unter welchen Bedingungen die Beteiligung an einer intransparent besteuerten Personengesellschaft steuerlich vorteilhafter ist als die Beteiligung an einer transparent besteuerten Personengesellschaft oder an einer Kapitalgesellschaft. Zu Beginn der Arbeit wird als Basis für den weiteren Fortgang die Auslegung von Doppelbesteuerungsabkommen und die Einordnung ausländischer Personen- und Kapitalgesellschaften im Hinblick auf die Anwendung des deutschen Steuerrechts und des Abkommensrechts untersucht. Die folgenden Kapitel beschäftigen sich mit der steuerlichen Behandlung bei der Gewinnentstehung, beim Gewinntransfer, bei Verlusten, bei Leistungsbeziehungen zwischen Gesellschaft und Gesellschafter sowie bei Einkünften aus Drittstaaten. Im Schlusskapitel werden die Ergebnisse vergleichend gegenüber gestellt und es erfolgt ein Steuerbelastungsvergleich.