The arbitrability of investor-state taxation disputes in international commercial arbitration

<p>Despite the expanding scope of arbitrability in recent times, the arbitrability of tax disputes remains an unsettled issue. While it has been a hotly discussed topic in the field of international investment arbitration, it also warrants attention in the context of international commercial arbitration. In particular, the arbitrability of investor-state taxation disputes in this area raises a number of challenging issues. Accordingly, this article provides an in depth examination of the arbitrability of investor-state taxation disputes in international commercial arbitration. It concludes that traditional concerns regarding the arbitrability of tax disputes do not, in principle, support the inarbitrability of all tax disputes. Rather, there is a logical distinction to be drawn between taxation disputes that directly implicate the sovereignty of states, and disputes as to taxation that are merely contractual in nature, and only involve taxation indirectly. In reaching this conclusion, this article also yields some insights into both the question of which law should govern arbitrability and also into the nature of arbitrability more generally, in the light of the developments that have occurred in this area.</p>

The arbitrability of investor-state taxation disputes in international commercial arbitration

<p>Despite the expanding scope of arbitrability in recent times, the arbitrability of tax disputes remains an unsettled issue. While it has been a hotly discussed topic in the field of international investment arbitration, it also warrants attention in the context of international commercial arbitration. In particular, the arbitrability of investor-state taxation disputes in this area raises a number of challenging issues. Accordingly, this article provides an in depth examination of the arbitrability of investor-state taxation disputes in international commercial arbitration. It concludes that traditional concerns regarding the arbitrability of tax disputes do not, in principle, support the inarbitrability of all tax disputes. Rather, there is a logical distinction to be drawn between taxation disputes that directly implicate the sovereignty of states, and disputes as to taxation that are merely contractual in nature, and only involve taxation indirectly. In reaching this conclusion, this article also yields some insights into both the question of which law should govern arbitrability and also into the nature of arbitrability more generally, in the light of the developments that have occurred in this area.</p>

Taxing Profits from International Maritime Shipping in Africa: Past, Present and Future of UN Model Article 8 (Alternative B)

International maritime shipping is an essential part of global business. Since the establishment of the current international tax regime in the 1920s, there has been a consensus that profits generated by this business are taxable only in the residence state –the state where the shipowners are located. Source states – the port states where business physically takes place – are generally expected to exempt income from international shipping. This standard is currently reflected in Article 8 of the OECD Model and Article 8 (Alternative A) of the UN Model, and is incorporated in the vast majority of bilateral tax treaties currently in force. Exclusive residence state taxation of shipping profits is problematic when the size of mercantile fleets and shipping flows between two states are of unequal size. This is often the case in relations between a developed and developing country. The latter often lack a substantial domestic mercantile fleet, but serve as an important revenue-generating port state for the fleet of the developed country. To come to a more balanced allocation of taxing rights in such a case, a source taxation alternative has been inserted in UN Model Article 8 (Alternative B). From its inception, Article 8B has been labelled impractical due to the lack of guidance on core issues, like sourcing rules and profit allocation. This gap is said to explain the low adoption rate of Article 8B in global tax treaty practice. In reality, tax treaty practice regarding Article 8B is heavily concentrated and flourishing in a handful of countries in South/South-East Asia – Bangladesh, India, Indonesia, Myanmar, Pakistan, the Philippines, Sri Lanka and Thailand. All these countries subject non-resident shipping income to tax in their domestic income tax laws. Except for India, all countries are able to exercise these domestic tax law rules in relation to shipping enterprises located in the biggest shipowner states, either because they have a treaty in place that provides for source taxation or because there is no treaty at all and thus no restriction of domestic law. None of the relevant tax treaties contain a provision that incorporates the exact wording of Article 8B of the UN Model. If other countries, like coastal countries in sub-Saharan Africa, are looking to implement source taxation of maritime shipping income in the future, they are advised to draw on the South/South-East Asian experience. Best practice can be distilled regarding sourcing rule, source tax limitation, profit attribution and method of taxation (on gross or net basis). In addition to technical guidance on tax, the South/South-East Asian experience also provides important general policy considerations countries should take into account when determining whether source taxation of maritime shipping profits is an appropriate target for their future tax treaty negotiations.

Research on Innovation of Grass-roots Working Mechanism Based on Accurate Supply Service: Take Shunde Taxation Bureau’s Innovation Reform as an Example

In recent years, with the continuous improvement of China’s economic level and the accelerating social transformation, the social demand for grass-roots public services has begun to diversify and refine. As an important part of grass-roots public services, tax service is also facing the transformation of service demand. However, the traditional grass roots working mechanism of tax departments has limited effect under the new situation, it is difficult to meet the increasingly refined service needs of taxpayers, and there is a gap between the fragmented working mechanism at the grass- roots level and diversified service demands. It is urgent to respond to social needs and deliver services accurately through institutional reform and innovation. Firstly, this paper analyzes the problems existing in the grass-roots working mechanism of tax departments in China. Then, by introducing a series of measures for the reform and innovation of grass-roots working mechanism based on precise supply service in Shunde District Taxation Bureau of Foshan City, State Taxation Administration of The People’s Republic of China (hereinafter referred to as “Shunde Taxation Bureau”), and based on analyzing the achievements of its reform and innovation, this paper summarizes the reference and enlightenment of its reform experience to the innovation of grass roots working mechanism of tax departments in China.

Taxation

Taxation is the collection by a revenue authority of levies, fees, or charges from residents, businesses, or other legal entities deemed taxable pursuant to laws and regulations. Taxation affects most people in the world within the confines of a nation, state, or region. Some people claim taxation is theft by the state, others claim that it is a moral action and duty, and a third view is that taxes are expenses that citizens incur in order to make claims on the state. Taxation is thus an area of contestation. Taxpayers pay taxes on what they produce or transport, on their salaries and other income, and on their consumption. Taxation not only has a fiscal purpose, but can be used for resource allocation within society, for income redistribution, and for leveling economic stability to address issues of unemployment, prices, and economic growth. Research on taxation has been conducted in most social sciences. Legal scholars discuss changes to the law, economists emphasize taxation’s economic impact within the constraints of models, the accounting discipline addresses the organization and measurement of taxation, and behavioral economists and psychologists aim to predict human behavior in taxation experiments. While this research has extended the knowledge of fiscal practices, taxation has long been in dire need of a critical perspective on its human consequences, its social impact, and how it is culturally shaped. An emerging anthropology of taxation can address these issues. The anthropology of taxation opens a host of interconnected issues at the nexus of states, markets, and citizenship. It focuses on money, work, and ownership; notions of fairness and honesty or avoidance and evasion; the politics of regulation and redistribution; and the balance between taking responsibility for oneself and for others, to name a few. Ethnographic studies of taxation can depict how various stakeholders in the tax arena shape and are shaped by taxation. And they can illustrate how subjects of taxation—residents, businesses, communities, and societies—through their view on and practices of taxation, negotiate their relation to the state and to other beneficiaries. Turning our attention to the collecting side, taxation provides a multifaceted arena for issues such as policymaking, governance, and digitalization. The role that tax advisers play, often advising taxpayers on curtailing tax, also suggests a complicated relation with society. Anthropologists can untangle and illustrate the relations taxation create between various stakeholders through notions of social contract, governance, fiscal citizenship, reciprocity, and redistribution.

A Statistical Study of the Forestry in Ukraine

The article is devoted to the analysis of the forestry in Ukraine as the reference point for further development of the framework for constructing the national forest account allowing for a description of interactions between economic activities and forests as a nature environment, and for consistent and comprehensive integration of environmental and economic problems in this field. The study covers the existing statistical definitions, classifications and the available statistical information about the forest, selected forestry indicators for Ukraine, the existing sources of data for the analysis of forestry, with proposing the necessary steps for further applications of forest accounting tools, in order to construct the forest account. It is pointed out that the forestry is represented by two large groups of institutional units: physical persons or groups of physical persons in form of households; legal entities, established and operated in keeping with the law, irrespective of what persons or entities may be their owners or managers. The main categories of legal entities are corporations, non-commercial organizations, and public administration bodies. It is determined that the main sources of data about the forest fund and forest resources of Ukraine are as follows: (i) statistical information based on the data from enterprises, obtained from official statistical observations of the State Statistics Service of Ukraine; (ii) administrative data based on the data from enterprises, obtained by public administration bodies (The State Service of Ukraine on Geodesy, Cartography and Cadastre, the State Agency of Forest Resources of Ukraine, the State Custom Service, the State Taxation Service) as part of functional responsibilities; (iii) the data of the national inventory of forests, obtained by the authorized bodies. The latest official data of the national forest inventory for Ukraine are available as of January 01, 2011, but these data have not been published yet in a proper manner. It is demonstrated that the official statistics cover a limited set of statistical data about the forestry due to the institutional constraints. A dynamic and structural analysis of the forest lands is explored, with outlining the main problems related with improving methodological approaches to the formation of the forestry statistics. The analysis allowed for determining the main areas of improvements in the forestry accounting and coming up with propositions of necessary steps to solve the problems of statistical studies of this industry.

Dealing with the visibility created by accounting numbers – A case study of cost accounting translation in a transitional economy

PurposeThis paper investigates the process of translating a costing tool into operational use in the context of a transitional (post-communist) economy, where local institutions challenge the rationality of western methods.Design/methodology/approachBy mobilizing Actor–Network Theory, in particular Callon's four moments of translation, and by drawing data from an interventionist research, the paper focuses on the process of change instilled by the implementation of a costing tool in 20 Romanian construction companies.FindingsThe costing system is initially problematized as a tool for rational decision making. However, the visibility over the accounting figures generated by the costing tool instilled new roles for the cost system to manage internal and external interdependencies. First, two costing datasets were created, one for decision making and one for tax purposes, to manage the relationship with the state taxation authorities. Second, since the costing tool generated visibility over the field practices as well, engineers convinced management to drop the decision-making set of costs. The costing tool ultimately only became used for tax optimization, an originally unintended use, reflecting its translation process.Research limitations/implicationsBy taking an interventionist approach, the paper contributes to theorizing accounting in transitional economies by bringing their economic idiosyncrasies into the analysis.Practical implicationsThe results inform managers about the intended and unintended consequences of management accounting tools and about actors' role in shaping their use.Originality/valueOur research responds to recent calls to study how organizations configure their control systems in a rapidly changing environment and what is the role of management accounting in these arrangements.

The Impact of Informal Employment of the Population of the Northern Resource-Producing Region on Its Budget

It is currently impossible to analyse the socio-economic situation and the budgets of the Russian regions without taking into account the problems of informal employment. There is a wide variety of publications on this topic. However, they do not sufficiently address the regional features and reasons for the behaviour of economic entities, which do not wish to comply with the legalization requirements. We conducted the research based on the neoliberal concept, which considers the informal sector as a consequence of the excessive regulation and state taxation. We hypothesise that the existence of informal employment in the region results in a budget deficit and requires the development of measures promoting the legalization of self-employed income. The study determined the level and causes of the regional informal employment, and assessed its impact on the budget. As a research methodology, we applied empirical methods, statistical, economic and financial analysis. The survey of the population of the Khanty-Mansy Autonomous Okrug — Yugra, established the nature and the main causes of informal employment. Based on the analysis of the regional budget and labour resources, we have examined the impact of informal employment on the budget and determined its cumulative effect. Finally, we have proposed a methodology for assessing how the existing level of self-employment influences the regional budget. This methodology takes into account not only the damage caused to the regional budget revenue due to the lack of tax payments, but also the damage associated with excessive social expenditures on the self-employed population. The research results can be used for developing the projects aimed at reducing informal employment at all levels of government.