NETHERLANDS SEEKING FOR A NEW BALANCE IN THE INTERNATIONAL TAXATION

The article examines the combination of the Netherlands’ departure from the role of a transit jurisdiction for capital from all over the world and their struggle to attract the headquarters of multinational companies, including those migrating from the UK due to Brexit. It is shown that these processes are due to both fundamental reasons and the current need of countries for tax refunds to replenish their budgets to cover the consequences of the pandemic crisis. The author comes to the conclusion that the restructuring of the rules of international tax regulation which is going on now, may cause clashes of countries’ interests and strategies, which is illustrated by the example of the breakdown of the Agreement on the avoidance of double taxation between Russia and the Netherlands.

On the Fragility of the International Taxation Legal System

This Article focuses on the OECD’s work on harmful tax competition todemonstrate how the OECD and subsidiary bodies’ governance structure,and the standard-settingprocess, built a fragile international taxationlegal system that is not just impairing legitimate tax competitionbut also failing to promote cooperation among tax jurisdictions. Theoption for the harmful tax competition work among other tax issuescovered by the OECD is justified by the difficulties faced by the WTODispute Settlement Body (DSB) while adjudicating the Argentina-FinancialServices dispute. In this dispute, Panama challenged theimposition of defensive tax measures against harmful tax competitionbased on a list of non-cooperativetax jurisdictions issued by the Argentine tax authority. The clash between the international tradelegal system and the international tax system unveiled the fragilities ofthe last related not just to the global governance structure but also theinternational tax standards for harmful tax competition. In spite ofthe recent efforts by the OECD by the lauching of the BEPS Project, thechallenge of making the international taxation system work for allMembers and non-Membersremains.

FORENSIC ECONOMIC EXAMINATION OF TRANSFER PRICING

The integration of national economies and markets, the ability of large corporations to conduct international business, the development of the digital sector of the economy contribute to global trends in the globalization of the international taxation system. The exchange of tax information and the conduct of joint tax audits by the tax authorities necessitate the unification of approaches to transfer pricing by transnational companies. The intensification of tax audits by tax authorities on transfer pricing issues leads to tax disputes, including those that are considered in court. Administrative litigation involves the use of an effective tool in resolving tax disputes on transfer pricing, namely forensic economic examination. The peculiarities of conducting tax audits on transfer pricing and the use of forensic economic examination as an effective mechanism in tax disputes on transfer pricing are studied. The analysis of judicial practice in this area allowed to establish groups of disputes on transfer pricing, which are considered by the Administrative Court of Cassation within the Supreme Court. It is established that the consideration of tax disputes on transfer pricing includes three mandatory elements: economic analysis, facts (circumstances) and the legal component (tax legislation). Forensic economic examination is an effective tool for resolving pre-trial or investigative conflicts of interest between the tax service and the taxpayer of the “economic analysis” component. Approaches to the formulation of questions submitted for the decision of forensic economic examination on transfer pricing are studied. It is determined that the conclusions of forensic experts form a qualitative and thorough evidence base of taxpayers in tax disputes in the field of transfer pricing.

Field Heteronomy and Contingent Expertise: The Case of International Tax Justice

The international tax system is targeted by a diverse range of networked civil society actors, from critical professionals mobilizing their expertise to anti-austerity protestors targeting the consequences of tax dodging. The years following the 2008 financial crisis saw an increase in the range of these actors and their cooperation with one another. This paper argues that a transnational field analysis complements existing expertise-oriented approaches, by identifying the overarching objective of the tax justice agenda as increasing heteronomy in the international taxation field relative to political fields. This objective requires the mobilization of diverse resources across different fields, resulting in network relationships crossing field boundaries to contest inter-field relations, rather than any single bounded field struggle. The findings are supported by an analysis of tax justice advocacy after the 2008 financial crisis in the United Kingdom and Australia, including thirty-seven in-depth interviews with different organizations involved in the network.

Reservations and declarations to tax treaties

The subject of the article. The article represents a research of conceptual properties and issues of applying reservations and declarations to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, developed in frames of implementing the OECD/G20 Action Plan on Base Erosion and Profit Shifting (BEPS). The Multilateral Tax Convention modifies the application of agreements for avoiding double taxation, that are covered by its action. Since January 1, 2021 it has been applied to 34 agreements for avoiding double taxation between the Russian Federation and such countries as the UK, Canada, Latvia, Malta, the Netherlands and France. The Multilateral Tax Convention provides for updating bilateral tax treaties – whether they were developed upon the OECD Model Tax Convention or the UN Model Tax convention. The Convention retains a great degree of flexibility in relation to the implementation of its provisions – especially by the means of reservations, made by the countries.The purpose of the article is to identify the main characteristics of applying reservations and declarations in international tax law.The methodology.The study is based on empirical methods of comparison and description, theoretical methods of formal and dialectical logic.The main results. Reservations have played a minor role in international taxation until now – usually they reflected disagreement, expressed by an OECD member country with the provisions of the OECD Model Tax Convention or its Official commentary. Reservations were formulated in relation to a non-binding (model) document and their importance was limited. Such reservations cannot be associated with declarations, made in relation to legally binding documents like the Multilateral Tax Convention. Analyzing the general points of scientific dispute upon the mentioned range of issues, the author argues with researchers who deem that the structure of reservations to the Multilateral Tax Convention doesn’t correspond with the provisions over reservations in the Vienna Convention on the Law of Treaties, 1969 and thus recognize those reservations as “legal hybrids”.Conclusions. The structure of reservations to the International Tax Convention is deter-mined by the nature of double taxation agreements. The model lawmaking principle (the use of the OECD Model Tax Convention) allowed developing “umbrella” architecture of relationships between the provisions of the Multilateral Tax Convention and the norms of double taxation agreements. The article categorizes types of reservations as reservations of general nature and treaty-specific reservations. The article also considers the specific properties of reservations made in relation to the provisions of the Convention, which com-pose a minimal standard.

Tax Sovereignty and Investor Protection: Why the Proposed Global Minimum Tax Is not the Final Frontier for Corporate Tax Arbitrage

Over the past decade, international tax governance has evolved with bewildering speed in response to the challenges of digitalization and widespread corporate tax avoidance. Since the launch of the Group of 20 (G20)-Organisation for Economic Co-operation and Development (OECD) base erosion and profit shifting (BEPS) initiative in 2012, 135 countries and 14 international organizations have joined the BEPS Inclusive Framework, committing to implement new global standards on corporate tax, which has already been lauded as a revolution in the architecture of international tax law and policy. Even further expanding the scope of the OECD’s work on international taxation in a landmark announcement in March 2021, the U.S. administration further proposed imposing a global minimum corporate tax at a rate of 21% to be implemented through an international agreement by mid-2021. If the new OECD initiative is agreed, will the plan to implement a minimum corporate tax be fully implemented by G20 members, and if so, will it do enough to address the tax challenges of digitalization embodied in corporate tax arbitrage? Although the evidence suggests legislative and public policy compliance is likely to be high among G20 members, this article argues the minimum tax initiative is unlikely to go far enough to address deficiencies in global tax dispute resolution, which are extremely germane to the success of the proposed minimum tax. As explained in this article, U.S. leaders and global policymakers must enhance the mutual agreement procedure (MAP), a cornerstone of tax dispute resolution, given a growing body of tax litigation in investment law that threatens the implementation of BEPS 2.0. To do so, global policymakers must also reconcile the conflict of norms between tax sovereignty and investor protection contained in the investor-state dispute settlement (ISDS) regime. Only by addressing the conflict between the principles of tax sovereignty and investor protection can they prevent a tidal wave of investor disputes that will challenge the implementation of the minimum tax through national tax laws.

RISK INDICATORS OF TRANSFER PRICING ACCORDING TO THE DOCUMENTS OF INTERNATIONAL ORGANIZATIONS AND WAYS OF THEIR FURTHER USE

The article discusses the issue of establishing a list of transfer pricing risk indicators and determining further ways to use them. The problem of defining and using indicators of transfer pricing risks is relevant and has only recently begun to be discussed by experts in the field of international taxation and in academia. In fact, this category was not study as a separate category of indicators of tax risks, but was only considered in general terms as one of the types of tax risks. The study identified documents from international organizations that consider transfer pricing risks as a separate category of tax risks, as well as an element of tax control over taxpayers’ compliance with transfer pricing rules. On the basis of these documents, which summarize the international practice of transfer pricing, an indicative list of transfer pricing risk indicators has been studied and formed and recommendations have been developed on how to further use it by the tax authorities of Ukraine. The definition in this article of an indicative list of transfer pricing risk indicators in accordance with the documents of international organizations is an important prerequisite for understanding further steps to improve the domestic transfer pricing tax control system as a risk-oriented system. The author to suggested to using this list in the future for development and / or creation: a national indicative list of transfer pricing risks indicators and a domestic system for classifying and assessing such risks; standardized processes for identifying and processing information about potential transfer pricing risks and their integration into standardized processes of the general system for processing tax risks in the State Tax Service of Ukraine; determination methods (guidelines) and training materials on this issue; processes for selecting taxpayers for audits and evaluating the results of transfer pricing audits, and the like.