KluwerLawOnline.com - Intertax

Article: The Internet of Things as A Tool to Improve Environmental Taxation within the EU: A Case Study on the Design of Annual Road and Motor Vehicle Taxes [pre-publication]

Sun, 12 May 2024 00:01:06 GMT

Technology is essential for the transition towards climate neutrality not only in technical aspects (better and more efficient capture, energy storage, or carbon use) but also as an important tool in taxation. The progressive implementation of the Internet of Things’ (IOT) technology can contribute to achieving the proposed objectives of the European Union’s (EU’s) environmental agenda. Its capacity to monitor and record real-time emissions creates the possibility of determining the exact amount of emissions that a vehicle emits during the year. Its implementation for tax purposes can revolutionize the design of the taxable event and the quantifying elements of certain environmental taxes, particularly those related to taxing pollutant emissions from motor vehicles in order to ensure more compliance with the pollutant pays principle.

Volume 52 Online ISSN 0165-2826

Editorial: Why Should EU Countries Support a UN Framework Convention on International Tax Cooperation [pre-publication]

Sun, 12 May 2024 00:01:06 GMT

Volume 52 Online ISSN 0165-2826

Debate: The Advocate General’s Opinion in Commission v. Ireland and Apple [pre-publication]

Sun, 12 May 2024 00:01:06 GMT

In a surprising opinion handed down in November 2023, Advocate General Pitruzzella agreed with the European Commission that Apple was given unlawful State aid by Ireland. The Advocate General recommended that the European Court of Justice uphold the Commission’s two central grounds of appeal. This note will look at each in turn, highlighting how the Advocate General fails to properly apply previous case law, to sense the general mood around the application of the state aid rules to tax administration, and to account for the (overinclusive) consequences of his approach. As a result, it is highly unlikely that the European Court of Justice will agree with the Advocate General.

Volume 52 Online ISSN 0165-2826

Article: Lead Tax Administration: A deal breaker? [pre-publication]

Sun, 12 May 2024 00:01:06 GMT

This article examines the introduction of the lead tax administration (LTA) in the administrative and certainty framework of Pillar One. The LTA is designed to be assumed by the tax authority of the jurisdiction in which ultimate parent entity (UPE) of a multinational enterprise (MNE) resides. In calculating Amount A of Pillar One, it is required to apply a certain methodology and distribute tax bases to all jurisdictions in which the enterprise generates business profits. Market jurisdictions may perform consultative functions once the LTA is calculated. The main finding of this article is that the appointment of the LTA has violated market jurisdictions’ tax sovereignty to the extent that tax assessments taxable income of their residents, if they qualify as ‘highly profitable MNEs’, will be performed by the LTA. The authors argue that the new taxing right established through the implementation of the Pillar One objective is only meant to grant market jurisdictions with additional tax receipts instead of granting them with full taxing rights. Unfortunately, sound legal and tax principles have not yet been formulated to justify the existence of the LTA.

Volume 52 Online ISSN 0165-2826

Guest Editorial Note: The Future of Taxation in Europe [pre-publication]

Sun, 12 May 2024 00:01:06 GMT

Volume 52 Online ISSN 0165-2826

Case Law: AG Pitruzzella’s Opinion Regarding Apple and the Right Standard to Review Tax Rulings [pre-publication]

Sun, 12 May 2024 00:01:06 GMT

Volume 52 Online ISSN 0165-2826

Literature Review: Robert Attard and Paulo Pinto de Albuquerque; Taxation at the European Court of Human Rights (Wolters Kluwer 2023) [pre-publication]

Sun, 12 May 2024 00:01:06 GMT

Volume 52 Online ISSN 0165-2826

Article: UN MTC Article 15: Reconciling the Global North’s ‘Digital Nomad’ With the Global South’s ‘Digital Freelancer’: Will the Rising Tide Lift All Boats? [pre-publication]

Sun, 12 May 2024 00:01:06 GMT

The United Nations Model Tax Convention (UN MTC) much like the Organization for Economic Cooperation and Development Model Tax Convention (OECD MTC) deals with taxation of cross-border employment incomes. While the OECD MTC professedly promotes economic interests of advanced Global North states, the UN MTC intends to protect fiscal interests of developing countries lying in the Global South. Article 15, unlike most other provisions of the two MTCs, had a rather smooth sail until the turn of the century when digitalization began to very rapidly grip the world economy. In an effort to grasp the digitalization-induced disruption in the application of UN MTC Article 15, a romantic prototype of ‘digital nomad’ was contrived by Global North scholars to denote remote working of various shades with an ostensible intent to attempt the decadesold allocation of taxing rights between the source and residence states. This article posits that the concept of ‘digital nomad’ only pertains to the Global North, and it is completely alien to the developing countries. It further argues that the Global South’s competing challenge is the ‘digital freelancer’ that has not yet been allowed to realize its full potential due to countermeasures introduced in Global North states. Unlike the digital nomad who moves freely across borders without any visa restrictions exercising services remotely for an employer(s) based in distant lands, a digital freelancer is permanently ‘caged’ inside his own (developing) country and renders services for his employer(s) located elsewhere in the world – majorly due to visa restrictions. It is premised that the digital nomad and digital freelancer being intrinsically distinct phenomena from each other pose varying challenges to the different tax administrations of the Global North and Global South. This contribution aspires to seminally conceptualize and sharpen that distinction and focus on the latter. The objective is to emphatically project the Global South’s perspective on Article 15s operability in a digitalized world and reset its international tax agenda for engaging with the Global North on more equitable terms.

Volume 52 Online ISSN 0165-2826

Case Law: Modern International Tax Dispute Resolution – An African Perspective on the Mutual Agreement Procedure, Arbitration, and the Future [pre-publication]

Sun, 12 May 2024 00:01:06 GMT

As the work around international tax and the adoption of multilateral solutions to national and international tax problems gains traction, tax dispute resolution frameworks are constantly being tested, and the ability of the current framework to withstand the pressure is in question. Most of the existing double taxation agreements (DTA) provides for the resolution of disputes arising from their operation using the mutual agreement procedure (MAP). This is an approach to resolving disputes that has become informally customary regardless of the arguments against its effectiveness and relevance given that the enabling provisions in the DTA impose no binding obligation to reach a settlement for existing disputes. For this reason, the efficacy of the MAP is being questioned. Notwithstanding, a relatively less popular trend in international tax dispute resolution is adopting mandatory arbitration in some tax treaties or using new variants of either theMAP or arbitration. Notably, some of the US’ tax treaties include the mandatory binding arbitration clauses to resolve eligible cases in which the competent authorities have attempted but are unable to reach a complete agreement via the MAP. Indeed, it has been suggested that perhaps mandatory arbitration is a better alternative or complement for seeking an effective resolution of tax disputes. Its proposed use accentuates the MAP and questions its utility and continued widespread use. It further effectuates queries as to whether singularly adopting mandatory arbitration, a combination of arbitration and theMAP, or a completely new alternative provide a more binding, realistic, and pragmatic approach to the resolution of disputes arising from the application of tax treaties and other international tax disputes. These are some of the key questions raised in this article.

Within the African context, it will appear that, while there is a proliferation of MAP clauses in tax treaties all over the world, their actual adoption or utilization does not enjoy the same popularity as those in developing countries such as Africa where there are very few incidents of using the MAP. While it is uncertain that this is simply because of its nonbinding nature, the nonpopularity of its use is alarming given that dispute resolution will only gain increased relevance. It is therefore important that the existing framework is adequately suitable for all players in the international realm.

This article contributes to the literature by questioning the efficacy of the MAP for the resolution of international tax disputes from a developing country perspective. It contends that the MAP in its very basic form is insufficient for resolving treaty disputes and that the Organization for Economic CooperationDevelopment’s (OECD’s) portrayal of theMAP’s success is misleading. OECD, 2022 Mutual Agreement Procedure Statistics. Available at, https://www.oecd.org/tax/dispute/mutual-agreement-procedure-statistics.htm (accessed 27 November 2023). This article also proposes a consideration of the MAP’s efficacy to resolve tax treaty disputes as it relates to treaties between developed countries such as the United States and those underdeveloped like Nigeria. It concludes that theMAP alone cannot effectively resolve treaty disputes without it being accompanied by arbitration. It further argues that, even when the latter occurs, it will not create a workable dispute resolution mechanism in any absolute terms. As it relates to many developing nations, international tax dispute resolution is nowhere near being settled and is deserves further attention and review.

Volume 52 Online ISSN 0165-2826

Article: Tax Justice for Women: Navigating the Path to Economic Empowerment in Post-Apartheid South Africa [pre-publication]

Sun, 12 May 2024 00:01:06 GMT

Upon the thirtieth anniversary of the advent of democracy in South Africa, it is vital to consider whether the country’s constitutional changes to its personal income tax system have empowered women. This is important and necessary, considering the eight decades of over-taxation women endured in the country before 1994. This paper considers the current economic position of women and whether the personal income tax system perpetuates the disadvantages women face economically or whether it, ideally, enhances their economic power. The South African income tax system adopts a genderneutral approach to the taxation of individuals. This paper argues that South Africa should adopt gender-sensitive income tax reforms that actively empower women. This may be done through the adoption of a dependent tax credit, adjusted income tax brackets for women, and tax incentives for women-owned businesses. While these reforms do not align with immediate revenue-raising objectives, they are a rectification of historical imbalances and reflect South Africa’s commitment to empowering women truly. As countries redesign their tax systems in the wake of the pandemic, reforms such as this represent an opportunity for South Africa to rectify historical wrongs and reform its personal income tax system equitably in its bid to meet the government’s constitional obligation to advance women as a group that had been disadvantaged by unfair discrimination in South Africa’s apartheid past.

Volume 52 Online ISSN 0165-2826