3. Electronic Theses and Dissertations (ETDs) - All submissions
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Item A theory for resolving qualification conflicts in double taxation treaties(2016-01-29) Mabasa, Sbusiso HuzlettTax treaties have a developed language of their own within the field of international law. They may include terms that are unknown in particular jurisdictions of domestic law or therein defined differently. Because the language of tax treaties and domestic law differ from each other, the definitions of certain terms and income type under a tax treaty and under different states’ domestic law are not necessary identical. Despite these differences, tax treaty definitions must be used for tax treaty classification purposes, and domestic law definitions must be used for domestic law classification purposes. The tax definition determines the type of the income for tax treaty purposes even though the income would qualify under another income category under the treaty states’ domestic law. Similarly, the domestic tax law definition determines the type of income for domestic law purposes (Helminen 2010). In most instances the treaty definitions of the various types of income refer back to domestic tax law, and where the domestic tax law definition deviates between the two treaty countries, this may lead to the application by these countries of different articles of the treaty. If this is caused by the application of the domestic law, this is referred to as a conflict of qualification in the Commentaries to the OECD Model Tax Convention. In general a conflict of qualification refers to a situation where identical facts are treated differently for tax purposes in different countries. Such a conflict may either concern the subject or the object of taxation. Key words: Tax treaties, OECD MTC, Double Tax Agreements, double taxation, conflicts of qualification, hybrid entities, partnerships, fiscally transparent, domestic law, Mutual Agreement Procedures, permanent establishment.Item Bilateral tax treaties: is sufficient relief provided in triangular tax situations?(2014-08-22) Uys, OdetteWith the international platform for cross border investment and economic development growing year on year at a steady pace, it has become apparent that bilateral income tax treaties do not always operate effectively in multilateral tax situations. Global transactions involving more than two states are certainly not uncommon and it could be said that the most fundamental issue in international taxation is double taxation resulting from the taxing rights of different tax jurisdictions that ‘overlap’ with regard to, generally speaking, one taxpayer or one declared income stream. Multilateral tax situations, commonly known as triangular cases, occur where tax incidence on a particular stream of income is triggered in three countries. These situations typically arise where a person who is a tax resident in two respective countries for tax purposes (a dual resident), or a person who is a tax resident in one country and has a permanent establishment in another, is earning revenue of which the source is in a third country. Taxing rights and jurisdictions of the three countries involved could potentially be in conflict with each other and therefore such situations may bring about lawful international triangular taxation or double taxation which will inevitably discourage enterprises from continuing investment and development internationally. Broad multilateral treaties in the income tax arena are not common1, and most treaties are still of a bilateral nature, i.e. generally addressing tax scenarios where only two specific countries are involved. The Organisation for Economic Cooperation and Development’s (’the OECD’)Model Tax Convention states this: There are no reasons to believe that the conclusion of a multilateral tax convention involving all Member countries could now be considered practicable. The Committee therefore considers that bilateral conventions are still a more appropriate way to ensure the elimination of double taxation at the international level.2