what is the purpose of a tax treaty
avoid or mitigate double taxation
2572551
Tax treaty Many countries have entered into tax treaties (also called double tax agreements, or DTAs) with other countries to avoid or mitigate double taxation. Such treaties may cover a range of taxes including income taxes, inheritance taxes, value added taxes, or other taxes. Besides bilateral treaties, multilateral treaties are also in place. For example, European Union (EU) countries are parties to a multilateral agreement with respect to value added taxes under auspices of the EU, while a joint treaty on mutual administrative assistance of the Council of Europe and the Organisation for Economic Co-operation and Development (OECD) is open
Tax treaty
2572551
Tax treaty Many countries have entered into tax treaties (also called double tax agreements, or DTAs) with other countries to avoid or mitigate double taxation. Such treaties may cover a range of taxes including income taxes, inheritance taxes, value added taxes, or other taxes. Besides bilateral treaties, multilateral treaties are also in place. For example, European Union (EU) countries are parties to a multilateral agreement with respect to value added taxes under auspices of the EU, while a joint treaty on mutual administrative assistance of the Council of Europe and the Organisation for Economic Co-operation and Development (OECD) is open
Tax treaty
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to domestic law. In those countries, a conflict between domestic law and the treaty must be resolved under the dispute resolution mechanisms of either domestic law or the treaty. Tax treaty Many countries have entered into tax treaties (also called double tax agreements, or DTAs) with other countries to avoid or mitigate double taxation. Such treaties may cover a range of taxes including income taxes, inheritance taxes, value added taxes, or other taxes. Besides bilateral treaties, multilateral treaties are also in place. For example, European Union (EU) countries are parties to a multilateral agreement with respect to value added taxes
Tax treaty
8471074
the Tax Challenges of the Digital Economy." The starting point for determination if a permanent establishment exists is generally a fixed place of business. The definition of permanent establishment in article 5 of the OECD Model Income Tax Treaty is followed in most income tax treaties. The commentary indicates that a fixed place of business has three components: The requirements of what constitutes a "'permanent establishment"' within the scope of a particular treaty depend on what interpretation a particular country places on that term, in context of the text of that treaty. As per Article 3 of the Vienna Convention
Permanent establishment
2572570
Kingdom and Italy, focus on subjective purpose for a particular transaction, denying benefits where the transaction was entered into in order to obtain benefits under the treaty. Other countries, such as the United States, focus on the objective characteristics of the party seeking benefits. Generally, individuals and publicly traded companies and their subsidiaries are not adversely impacted by the provisions of a typical limitation of benefits provision in a U.S. tax treaty. With respect to other entities, the provisions tend to deny benefits where an entity seeking benefits is not sufficiently owned by residents of one of the treaty countries
Tax treaty
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may or may not provide mechanisms for limiting this credit, and may or may not limit the application of local law mechanisms to do the same. Taxpayers may relocate themselves and their assets to avoid paying taxes. Some treaties thus require each treaty country to assist the other in collection of taxes, to counter the revenue rule, and other enforcement of their tax rules. Most tax treaties include, at a minimum, a requirement that the countries exchange of information needed to foster enforcement. The purpose of this agreement is to promote international co-operation in tax matters through exchange of information.
Tax treaty
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ordinary rule of treaty interpretation, as reflected in Article 30(3) of the Vienna Convention on the Law of Treaties, under which an earlier treaty between parties that are also parties to a later treaty will apply only to the extent that its provisions are compatible with those of the later treaty.With one convention, the signatory countries can achieve a work that would have taken decades otherwise. Consistent with the purpose of the BEPS multilateral instrument, which is to swiftly implement the tax treaty-related BEPS measures, the BEPS multilateral instrument also enables all parties to meet 2 of the 4 minimum
Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting
14183512
markets. This assessment is reinforced by the difficulties expected with respect to its implementation." It continued: "...the ECB is of the opinion that the introduction by a euro area Member State of a tax, such as envisaged by the draft law, is incompatible with the Treaty." Spahn tax A Spahn tax is a type of currency transaction tax that is meant to be used for the purpose of controlling exchange-rate volatility. This idea was proposed by Paul Bernd Spahn in 1995. The initial idea for a currency transaction tax is attributed to James Tobin in 1972, a concept now known
Spahn tax
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restructured into tax-free debt (see ), and the Revenue Commissioners reserve the right to challenge cases created for tax avoidance, although they have never done so in practice. The TCA 1997 legislation includes a headline tax rate of 25% on non-trading income so that the SPV is regarded as an Irish taxable entity. Thus, the Section 110 SPV is not presented overtly as a tax-free vehicle (i.e. unlike an Irish QIAIF), which would attract adverse attention from other tax authorities (under tax treaty rules), or regulators (e.g. EU or OECD). To get to a zero-tax position, the TCA 1997 allows
Irish Section 110 Special Purpose Vehicle (SPV)
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(MAP) for determining conflicts of dual residency. Most treaties provide that business profits (sometimes defined in the treaty) of a resident of one country are subject to tax in the other country only if the profits arise through a permanent establishment in the other country. Many treaties, however, address certain types of business profits (such as directors' fees or income from the activities of athletes and entertainers) separately. Such treaties also define what constitutes a permanent establishment (PE). Most but not all tax treaties follow the definition of PE in the OECD Model Treaty. Under the OECD definition, a PE
Tax treaty
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tax purposes. It should however be noted that, unlike common law tax systems, Chinese income tax legislation does not provide a distinction between income and capital. What is commonly referred to by taxpayers and practitioners as capital gain tax is actually within the income tax framework, rather than a separate regime. Tax-resident enterprises will be taxed at 25% in accordance with the Enterprise Income Tax Law. Non-resident enterprises will be taxed at 10% on capital gains in accordance with the Implementing Regulations to the Enterprise Income Tax Law. In practice, where a resident of a treaty partner alienates assets situated
Capital gains tax
15160020
in 1975 included a provision to prohibit US states from "tak[ing] into account the income, deductions, receipts, or out-goings of a related enterprise" in the United Kingdom or any other country for the purpose of determining tax liability. However, the US Senate, whose consent was required to ratify the treaty, rejected this provision, and the treaty was amended by a protocol in 1979. The Supreme Court explicitly held worldwide unitary combination as constitutional in separate cases in 1983 and 1994 (Barclays Bank PLC v. Franchise Tax Board). In 1985 the United Kingdom passed retaliatory legislation which would have overridden the
Formulary apportionment
2572564
fiscal domicile under such treaties is defined by reference to domicile as opposed to tax residence. Such treaties specify what persons and property are subject to tax by each country upon transfer of the property by inheritance or gift. Some treaties specify which party bears the burden of such tax, but often such determination relies on local law (which may differ from country to country). Most inheritance tax treaties permit each country to tax domiciliaries of the other country on real property situated in the taxing country, property forming a part of a trade or business in the taxing country,
Tax treaty
2394931
"natural" for the same purpose. Such standards are not readily discernible. The same objection applies to the term "device". It may be that a concept of "tax avoidance" based on what is contrary to "the intention of Parliament" is not coherent. The object of construction of any statute is expressed as finding "the intention of Parliament". In any successful tax avoidance scheme, a Court must have concluded that the intention of Parliament was not to impose a tax charge in the circumstances which the tax avoiders had placed themselves. The answer is that the expression "intention of Parliament" is being
Tax noncompliance
10406058
Unrelated Business Income Tax Unrelated Business Income Tax (UBIT) in the U.S. Internal Revenue Code is the tax on unrelated business income, which comes from an activity engaged in by a tax-exempt 26 USCA 501 organization that is not related to the tax-exempt purpose of that organization. For most organizations, a business activity generates unrelated business income subject to taxation if: A trade or business includes the selling of goods or services with the intention of having a profit. An activity is regularly carried on if it occurs with a frequency and continuity, similar to what a commercial entity would
Unrelated Business Income Tax
15160019
tax, believing it would lead to increased tax revenue in the face of a trend for multinational corporations to use transfer pricing to shift profits out of the US into low-tax countries. None of these suggestions has been adopted. Several US states allow, but do not mandate, that a corporate group include foreign entities for the purpose of assessing factors used in formulary apportionment ("worldwide unitary combination"). California, for example, began to accept worldwide unitary combination in the 1940s. However, its attempt to "require" such combination led to strong protests from US trading partners. The UK-US double taxation treaty signed
Formulary apportionment
20627559
acceptable to the widest tax treaty network. The focus has been around tightening the language around "arm's length" or "market tested" rates of PPN interest. However the rules remain sufficiently broad, and the exclusions sufficiently general, to materially limit the effect of these changes. A particular aim is enabling the PPN's to be classed as "Eurobonds" so they can be legally domiciled in Luxembourg, which has become a key "backdoor" out of the Irish corporate tax regime into a full Sink OFC. To protect the PPNs from the Generally Accepted Accounting Principles (GAAP), and International Financial Reporting Standards (IFRS), which
Irish Section 110 Special Purpose Vehicle (SPV)
2572552
to all countries. Tax treaties tend to reduce taxes of one treaty country for residents of the other treaty country to reduce double taxation of the same income. The provisions and goals vary significantly, with very few tax treaties being alike. Most treaties: The stated goals for entering into a treaty often include reduction of double taxation, eliminating tax evasion, and encouraging cross-border trade efficiency. It is generally accepted that tax treaties improve certainty for taxpayers and tax authorities in their international dealings. Several governments and organizations use model treaties as starting points. Double taxation treaties generally follow the OECD
Tax treaty
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110 SPV could be challenged as a non-ordinary Irish company, losing tax treaty access. Instead, controls were introduced, that while less explicit, would collectively ensure Section 110 SPVs were confined to global securitisation: While IFSC law firms lobbied for the removal of i. & iii. (above), and exemptions from improvements in Irish company law, these controls seemed to work. There is no record of any entity (Irish or foreign) using Section 110 SPVs to avoid Irish tax on Irish domestic investments or businesses until circa 2012 (). Note, Irish banks use Section 110 SPVs to raise capital to finance their
Irish Section 110 Special Purpose Vehicle (SPV)
2572563
under their governmental or economic system. Tax treaties usually specify the same maximum rate of tax that may be imposed on some types of income. As an example, a treaty may provide that interest earned by a nonresident eligible for benefits under the treaty is taxed at no more than five percent (5%). However, local law in some cases may provide a lower rate of tax irrespective of the treaty. In such cases, the lower local law rate prevails. Generally, income taxes and inheritance taxes are addressed in separate treaties. Inheritance tax treaties often cover estate and gift taxes. Generally
Tax treaty
2749872
taxpayer what he or she alternatively would have achieved in a safe, passive capital placement exempt from additional taxation. The main purpose of the allowance is to prevent adverse shifts in investment and corporate financing structure as a result of the dividend tax. According to the papers explaining the new policy, a dividend tax without such shielding could push up the pressures on the rate of return on equity investments and lead Norwegian investors from equities to bonds, property etc. There is a 6% Capital Gains Tax and a 1.5% Documentary Stamps on the disposal of real estate in the
Capital gains tax
4058020
a relevant 183-day period (approximately six months) and is tax resident ("i.e.", and paying taxes on his or her salary and benefits) elsewhere, then it may be possible to claim tax relief under a particular Double Tax Treaty. The relevant 183 day period is either 183 days in a calendar year or in any period of 12 months, depending upon the particular treaty involved. So, for example, the Double Tax Treaty with the UK looks at a period of 183 days in the German tax year (which is the same as the calendar year); thus, a citizen of the UK
Double taxation
6499571
of no effect. Furthermore, laws imposing taxation (except customs duties or excise) shall deal with 'one subject of taxation only', while laws imposing customs shall deal only with customs, and laws of excise only excise. If a law containing a tax provision is found to include any non-tax provisions, the court will render the non-tax provisions inoperative. In practice, if the tax provision is introduced in an amending instrument, the court will most likely strike down the amending instrument rather than render the entire law inoperative, this is what occurred in "Air Caledonie International v Commonwealth". The purpose of this
Constitutional basis of taxation in Australia
1547105
he ordered the construction of Fort Harmar near what is now Marietta, Ohio. Harmar did think not the Treaty of Fort McIntosh that he had just signed with the Delaware, Ottawa, Chippewa, and Wyandot ceding what is now southeastern Ohio to the United States to be worth much, writing: "Between you and me, vain and ineffectual all treaties will be, until we take possession of the posts. One treaty held at Detroit would give dignity and consequence to the United States, and answer every purpose". Until the creation of the Northwest Territory in 1787, the Northwest had no government beyond
Josiah Harmar
12874811
continues to shock readers with his racist comments on how the killing of Indians is no more than hunting animals; mocking them by calling them savages. Adding to the unfairness of the treaty Stevens has Simmons translate what the treaty says in the Chinook Jargon instead of the Salish Dialect on purpose in order to make the chiefs not see the dangers in which the treaty actually holds. To Stevens’ surprise, Leschi demands that the treaty be transcribed into their dialect and refuses to sign anything that he or his people put forward. While leaving the company Sam thinks of
Judicially Murdered
2572569
Competent authorities generally have the power to bind their government in specific cases. The treaty mechanism often calls for the competent authorities to attempt to agree in resolving disputes. Recent treaties of certain countries have contained an article intended to prevent "treaty shopping," which is the inappropriate use of tax treaties by residents of third states. These limitation on benefits articles deny the benefits of the tax treaty to residents that do not meet additional tests. Limitation on Benefits articles vary widely from treaty to treaty, and are often quite complex. The treaties of some countries, such as the United
Tax treaty
10303109
are effectively ignored and the inventory may be considered produced by the taxpayer. Various other systems have rules for determining what portion of income from inventory produced domestically and sold foreign or vice versa is sourced foreign. Where a system limits the credit based on domestic tax generated by foreign source net income, it must provide a mechanism for determining net income subject to home country tax, including associating deductions or exclusions with income for such purpose. Such mechanisms tend to be complex or rely on local accounting rules or judgments. The process of associating deductions with income is referred
Foreign tax credit
19722377
to the disputed territories in return for a Bolivian promise not to increase tax, Chile responded that the treaty did not allow for such a tax hike. Bolivia suspended the tax in April 1878. In November Chile proposed a mediation and cautioned that Daza's refusal to cancel the tax would force Chile to declare null the 1874 Treaty. In December 1878 Bolivia, counting in its military alliance with Peru, challenged Chile and said the tax was unrelated to the treaty and that the claim of the CSFA should be addressed in Bolivian courts, and revived the tax. When the company
Boundary Treaty of 1874 between Chile and Bolivia
5659378
Mutual legal assistance treaty A mutual legal assistance treaty (MLAT) is an agreement between two or more countries for the purpose of gathering and exchanging information in an effort to enforce public or criminal laws. Modern states have developed mechanisms for requesting and obtaining evidence for criminal investigations and prosecutions. When evidence or other forms of legal assistance, such as witness statements or the service of documents, are needed from a foreign sovereign, states may attempt to cooperate informally through their respective police agencies or, alternatively, resort to what is typically referred to as requests for “mutual legal assistance." The
Mutual legal assistance treaty
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voter approval requirement. Special purpose districts or agencies, including school districts, have no power to levy general taxes and can only impose special taxes. This restriction is based on prior judicial interpretations of Proposition 13. As a practical matter, only a city or a county has the power to levy a majority vote general tax under Proposition 218. The voter approval requirement under Proposition 218 was unanimously upheld by a California appellate court in 1998. The voter approval requirement for taxes under Proposition 218 is triggered when a local government "imposes," "extends," or "increases" a tax. What constitutes a tax
1996 California Proposition 218
20298015
Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, sometime abbreviated BEPS multilateral instrument, is a multilateral convention of the Organisation for Economic Co-operation and Development to combat tax avoidance by multinational enterprises (MNEs) through prevention of Base Erosion and Profit Shifting (BEPS). The BEPS multilateral instrument was negotiated within the framework of the OECD G20 BEPS project and enables countries and jurisdictions to swiftly modify their bilateral tax treaties to implement some of the measures agreed. The
Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting
2572554
place of incorporation, or similar criteria. Generally, individuals are considered resident under a tax treaty and subject to taxation where they maintain their primary place of abode. However, residence for treaty purposes extends well beyond the narrow scope of primary place of abode. For example, many countries also treat persons spending more than a fixed number of days in the country as residents. The United States includes citizens and green card holders, wherever living, as subject to taxation, and therefore as residents for tax treaty purposes. Because residence is defined so broadly, most treaties recognize that a person could meet
Tax treaty
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following are the judicial doctrines: 1) "The Substance over form doctrine" This doctrine is based on the premise that if two transactions have the same economic result, they should have the same tax result. To achieve this similar tax result, it can be necessary to look at the substance of the transaction rather than the formal steps taken to implement it. 2) "The Step transaction doctrine" Similar to the substance doctrine, the step transaction doctrine treats a series of formally separate steps as a single transaction to determine what really was going on with the transaction. 3) "The Business Purpose
Tax shelter
4058019
levied by the country in which the taxpayer resides for taxes levied in the other treaty country and as a result the tax payer pays no more than the higher of the two rates. Further, some treaties provide for tax sparing credits whereby the tax credit allowed is not only with respect to tax actually paid in the other treaty country but also from tax which would have been otherwise payable had it not been for incentive measures in that other country which result in exemption or reduction of tax. If a foreign citizen is in Germany for less than
Double taxation
6882529
for the purpose of tax avoidance. In the course of its judgment, the Court said the following. Gregory v. Helvering Gregory v. Helvering, 293 U.S. 465 (1935), was a landmark decision by the United States Supreme Court concerned with U.S. income tax law. The case is cited as part of the basis for two legal doctrines: the business purpose doctrine and the doctrine of substance over form. The business purpose doctrine is essentially that if a transaction has no substantial business purpose other than the avoidance or reduction of Federal tax, the tax law will not regard the transaction. The
Gregory v. Helvering
8471075
on the Law of Treaties, no one is entitled to claim rights under a particular treaty unless otherwise authorised by the contracting state. Therefore, if a particular contracting state places a different meaning on the term 'permanent establishment' than what the taxpayer seeks to place, the taxpayer would be left with virtually no remedy within that state, other than to seek a mutual agreement to that dispute with the other contracting state to that treaty. The OECD Model Tax Convention includes a short indicative list of "prima facie" permanent establishments. These, however, are not automatically permanent establishments as the requirements
Permanent establishment
9071974
was closed by a new tax treaty in August 2010, which imposes a 20% withholding tax on distributions through such structures. More recently, it has become popular to use a tokumei kumiai together with a godo kaisha to hold a trust beneficial interest in real estate using what is known as a "TK/GK scheme." Tokumei kumiai , literally "anonymous partnerships," are a Japanese bilateral contract governed by the Commercial Code of Japan, Article 535 "et seq". In English, they are often called TK or silent partnerships. In many respects they are similar to common law limited partnerships. In a tokumei
Tokumei kumiai
1999802
Special-purpose local-option sales tax A special-purpose local-option sales tax (SPLOST) is a financing method for funding capital outlay projects in the U.S. state of Georgia. It is an optional 1% sales tax levied by any county for the purpose of funding the building of parks, schools, roads, and other public facilities. The revenue generated cannot be used towards operating expenses or most maintenance projects. Capital outlay projects are defined as major projects of a permanent, long-lived nature, such as land and structures. Among the projects explicitly included are road, street, bridges, police cars, fire trucks, ambulances and garbage trucks. Georgia
Special-purpose local-option sales tax
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establish effective exchange of information. The agreement represents the standard of effective exchange of information for the purposes of the OECD’s initiative on harmful tax practices. This agreement, which was released in April 2002, is not a binding instrument but contains two models for bilateral agreements. A number of bilateral agreements have been based on this agreement. Nearly all tax treaties provide some mechanism under which taxpayers and the countries can resolve disputes arising under the treaty. Generally, the government agency responsible for conducting dispute resolution procedures under the treaty is referred to as the “competent authority” of the country.
Tax treaty
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Model Convention and the official commentary and member comments thereon serve as a guidance as to interpretation by each member country. Other relevant models are the UN Model Convention, in the case of treaties with developing countries and the US Model Convention, in the case of treaties negotiated by the United States. In general, the benefits of tax treaties are available only to tax residents of one of the treaty countries. In most cases, a tax resident of a country is any person that is subject to tax under the domestic laws of that country by reason of domicile, residence,
Tax treaty
20298020
jurisdictions have signed it, but not deposited their instrument of ratification. Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, sometime abbreviated BEPS multilateral instrument, is a multilateral convention of the Organisation for Economic Co-operation and Development to combat tax avoidance by multinational enterprises (MNEs) through prevention of Base Erosion and Profit Shifting (BEPS). The BEPS multilateral instrument was negotiated within the framework of the OECD G20 BEPS project and enables countries and jurisdictions to swiftly modify their
Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting
2572561
provide for collection of tax from non-residents by requiring payers of certain types of income to withhold tax from the payment and remit it to the tax authorities. Withholding arrangements may apply to interest, dividends, royalties, and payments for technical assistance. Most tax treaties reduce or eliminate the amount of tax required to be withheld with respect to residents of a treaty country. Most treaties provide mechanisms eliminating taxation of residents of one country by the other country where the amount or duration of performance of services is minimal but also taxing the income in the country performed where it
Tax treaty
19831888
excise tax and sales tax, from any activity on the reservations; this interpretation forms the basis of the Senecas' convenience store industry, which has a built-in price advantage over non-native competitors due to the tribe's assertion that they do not have to pay excise tax. (The Senecas do not extend these advantages to non-native businesses or residents; any non-native leasing space on the reservation must still pay excise, sales and property tax to state, county, city and school authorities.) Third Treaty of Buffalo Creek The Third Treaty of Buffalo Creek or Treaty with the Seneca of 1842 signed by the
Third Treaty of Buffalo Creek
19704598
"Population", "Peace" and "The Vingtième". Damilaville is believed to have coauthored Vingtieme with Diderot, his trusted associate. His treatise is largely a discussion on the nature of government, of civil society and of the economy. Like Montesquie, Damilaville makes a clear distinction between the state, as an aggregate of people in society, and government. The treatise uses this dichotomy between the state and government to rationalize the necessity of taxes; however, Damilaville also argues tax simplification or reform. What is important in his contention for tax simplification is the purpose of having or raising taxes on participants in society. According
Étienne Noël Damilaville
11882367
treachery, seized the Persian officials; once released, the Persians preferred to stay in Nisibis. In November 506, a treaty was finally agreed, but little is known of what the terms of the treaty were. Procopius states that peace was agreed for seven years, and it is likely that some payments were made to the Persians. The Roman generals blamed many of their difficulties in this war on their lack of a major base in the immediate vicinity of the frontier, a role filled for the Persians by Nisibis (which until its secession in 363 had served the same purpose for
Anastasian War
6882525
Gregory v. Helvering Gregory v. Helvering, 293 U.S. 465 (1935), was a landmark decision by the United States Supreme Court concerned with U.S. income tax law. The case is cited as part of the basis for two legal doctrines: the business purpose doctrine and the doctrine of substance over form. The business purpose doctrine is essentially that if a transaction has no substantial business purpose other than the avoidance or reduction of Federal tax, the tax law will not regard the transaction. The doctrine of substance over form is essentially that for Federal tax purposes, a taxpayer is bound by
Gregory v. Helvering
2577404
tax avoidance where the main object (or purpose), or one of the main objects (or purposes), of a transaction is to enable tax advantages to be obtained. In the United States, the Internal Revenue Service distinguishes some schemes as "abusive" and therefore illegal. The Alternative Minimum Tax was developed to reduce the impact of certain tax avoidance schemes. Furthermore, while tax avoidance is in principle legal, if the IRS in its sole judgment determines that tax avoidance is the 'principal purpose' for an expatriation attempt, 'covered expat' status will be applied to the requester, thereby forcing an expatriation tax on
Tax avoidance
20298017
than 1,400 bilateral tax treaties. It entered into force on 1 July 2018, among the first jurisdictions that ratified it. The BEPS multilateral instrument looks to "prevent treaty abuse, improve dispute resolution, prevent the artificial avoidance of permanent establishment status and neutralise the effects of hybird mismatch arrangements".The BEPS multilateral instrument does not function in the same way as an amending protocol to a single existing treaty, which would directly amend the text of the existing tax treaty. Instead, it applies alongside the existing tax treaties. As stated in the Explanatory Statement of the BEPS multilateral instrument this reflects the
Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting
1780419
Tarapacá in 1875 as the Peruvian Government expropriated the salitreras. Having surrendered its claim to the disputed territories in return for a Bolivian promise not to increase tax, Chile responded that the treaty did not allow for such a tax hike. Bolivia suspended the tax in April 1878. In November Chile proposed a mediation and cautioned that Daza's refusal to cancel the tax would force Chile to declare null the 1874 Treaty. In December 1878, Bolivia, counting in its military alliance with Peru, challenged Chile and said the tax was unrelated to the treaty and that the claim of the
War of the Pacific
10406059
do if it performed the same activity. An activity is substantially related to furthering the exempt purpose of the organization if the activity contributes importantly to accomplishing the organization's purpose, other than for the sake of producing the income itself. A university runs a pizza parlor that sells pizza to students and non-students alike. The university is a tax-exempt organization and its pizza parlor generates unrelated business income. While the tuition and fees generated by the university are tax exempt, its income from the pizza parlor is not tax-exempt because the pizza parlor is unrelated to the university's education purpose.
Unrelated Business Income Tax
2430705
what We have, at present, to say to You, wishing you at the same time the most unlimited prosperity." Article 11 has been and is a point of contention in popular culture disputes on the doctrine of separation of church and state as it applies to the founding principles of the United States. Some religious spokesmen claim that—despite unanimous ratification by the U.S. Senate of the text in English which contained —the page containing Article 11 is missing from the Arabic version of the treaty. The contemporaneous purpose of Article 11 was to make clear that the United States was
Treaty of Tripoli
2577370
through the "business purpose" and "economic substance" doctrines established in "Gregory v. Helvering" and in the UK through the "Ramsay" case. Though the specifics may vary according to jurisdiction, these rules invalidate tax avoidance which is technically legal but not for a business purpose or in violation of the spirit of the tax code. Related terms for tax avoidance include tax planning and tax sheltering. The term avoidance has also been used in the tax regulations of some jurisdictions to distinguish tax avoidance foreseen by the legislators from tax avoidance which exploits loopholes in the law such as like-kind exchanges.
Tax avoidance
5383019
the Treaty of 1763, and thus excluded West Florida from the cession in the treaty of St. Ildefonso. All documents relating to the [1801] transfer are to the same effect. Previous to May, 1803, U.S. envoy Robert Livingston had contended that West Florida formed no part of Louisiana. However, the ambiguous third article of the treaty of St. Ildefonso lent itself to his purpose, although he had to adopt an interpretation that France had not asserted nor Spain allowed. Chambers arrives at what he calls the key to Mr. Livingston's sudden change of conviction concerning West Florida: "It had been
West Florida Controversy
13548679
. there cannot be a doubt but that Russia's determination is to close up the Danube entirely, and thus to stop out growing trade with the principalities. In 1840, Russia agreed in a treaty signed with Austria at St. Petersburg to keep the Sulina Channel open; for this purpose it would be allowed to tax vessels entering the river. The Russians brought in two dredging machines. One English account said they were "worked by manual labour for one day and then laid aside forever." Another account, written about the same time, had another version: The author claimed that the Turks
Internationalization of the Danube River
1999808
prohibited from going to transportation alternatives), even though such taxes are borne by the drivers actually creating the traffic (a user fee). The three regions which voted for the tax are all in middle Georgia, including Columbus and Augusta. Still causing controversy is the fact that local government in the other nine regions will now be required to put up 30% matching funds for projects for the next two years instead of the typical 10% to 15%. Special-purpose local-option sales tax A special-purpose local-option sales tax (SPLOST) is a financing method for funding capital outlay projects in the U.S. state
Special-purpose local-option sales tax
13931858
referred to as ‘strong’ or ‘weak’. As the Court's leading purposivist Justice Stephen Breyer considers determining and interpreting the purpose of a statute paramount. An apt example of Breyer's approach might be his dissent in "Medellín v. Texas" (2008), where he faulted the court's construction of a treaty because "it looks for the wrong thing (explicit textual expression about self-execution) using the wrong standard (clarity) in the wrong place (the treaty language)"; in response, the Court "confess[ed] that we do think it rather important to look to the treaty language to see what it has to say about the issue.
Purposive approach
6456587
be taken as a tax-free lump sum, and the rest can be drawn as taxable cash, used to buy an annuity, used to buy a flexible income drawdown product or any combination of these. Before making a choice, everyone has a new right to free and impartial guidance at retirement to help them make an informed decision on what is right for them. Personal pension scheme A personal pension scheme (PPS), sometimes called a personal pension plan (PPP), is a UK tax-privileged individual investment vehicle, with the primary purpose of building a capital sum to provide retirement benefits, although it
Personal pension scheme
8017525
continuing to hold the U.S. blameless for actions taken before the establishment of the Republic of Cuba in 1902. One lease that accomplished what the treaty contemplated had been executed earlier in the year and a second lease was executed later in the year. The lease treaty agreed to from February 16-23, 1903 stipulates that the Republic of Cuba lease to the United States specific lands in Cuba, notably the land that surrounds Guantánamo Bay, for the purpose of coaling and naval stations, for as long as necessary. The lease stipulates that the United States "shall exercise complete jurisdiction and
Cuban–American Treaty of Relations (1903)
4740219
requiring taxpayer identification for the purpose of payment of employment taxes. The provision was first enacted as part of the revision of the Tax Code in 1954. This authority was broadened in 1961 by 26 USC 6109. An EIN is usually written in the form 00-0000000 whereas a Social Security Number is usually written in the form 000-00-0000 in order to differentiate between the two. There are EIN Decoders on the web that can identify in what state the company registered the EIN. A business needs an EIN in order to pay employees and to file business tax returns. To
Employer Identification Number
2577405
worldwide assets to be paid as a condition of expatriation. The IRS presumes a principal purpose of tax avoidance if a taxpayer requesting expatriation has a net worth of $622,000 or more, or has had more than $124,000 in average annual net income tax over the 5 tax years ending before the date of expatriation. In the UK, judicial doctrines to prevent tax avoidance began in "IRC v Ramsay" (1981) which decided that where a transaction has pre-arranged artificial steps that serve no commercial purpose other than to save tax, the proper approach is to tax the effect of the
Tax avoidance
1911470
fixed periods...for the purpose of consulting on their common interests" which were the "prosperity of the Nations, and the maintenance of peace in Europe". A problem with the wording of of the treaty is that it did not specify what these "fixed periods" were to be and there were no provisions in the treaty for a permanent commission to arrange and organise the conferences. This meant that the first conference in 1818 dealt with remaining issues of the French wars, but after that instead of meeting at "fixed periods" the meetings were arranged on an ad hoc basis, to address
Concert of Europe
7063408
a treaty should be interpreted according to the plain meaning of its language, in the context of its purpose, and in good faith. This prevents much squabbling and unnecessary nit-picking. It also makes treaty authors spell out what they are trying to accomplish, to make interpretation easier, in a non-binding "preamble." In the modern world, international law is contested for its inability to enforce its rulings. History of international law The history of international law examines the evolution and development of public international law in both state practice and conceptual understanding. Modern international law developed out of Renaissance Europe and
History of international law
14415085
without discrimination, although all activity is subject to Norwegian legislation. The treaty limits Norway's right to collect taxes to that of providing services on Svalbard. Therefore, Svalbard has a lower income tax than mainland Norway, and there is no value added tax. There is a separate budget for Svalbard to ensure compliance. Svalbard is a demilitarized zone, as the treaty prohibits the establishment of military installations. Norwegian military activity is limited to fisheries surveillance by the Norwegian Coast Guard. The treaty requires Norway to protect the natural environment. Since the resettlement of Svalbard in the early 20th century, coal mining
Economy of Svalbard
6610206
for a transaction to be respected. The transaction must change, in a "meaningful way", the taxpayer’s economic position apart from the Federal income tax effects, and (B) the taxpayer must have a "substantial purpose" for entering into such transaction, apart from its Federal income tax effects. Under the Code, the term "economic substance doctrine" is defined as the common law doctrine under which Federal income tax benefits with respect to a transaction are not allowable if the transaction does not have economic substance or lacks a business purpose. The step transaction doctrine is incorporated into the codification. Tax shelter Tax
Tax shelter
1817748
totaling $134.5 billion. The bonds were in $500 million and $1 billion denominations, although the highest denomination ever issued by the US Treasury was $10,000. It was unclear what the purpose of the fake bonds was; the two men carrying them were not detained after the bonds were seized. In the United States, the "Tax Equity and Fiscal Responsibility Act of 1982" substantially curtailed the issue of debt in bearer form. The act disallowed a tax-deduction of interest paid on any such bonds issued after 1982 by the issuer in the case of corporate bonds, and removed the tax-exemption of
Bearer bond
14606214
working group. It has submitted several reports suggesting new measures on deepening integration of the NAFTA region including a Regulatory Cooperation Framework and a trilateral tax treaty to "provide clear rules governing tax matters affecting trade and investment between the three countries". Several advocates of integration saw the SPP as being insufficient. One criticism was that the governments lacked a "vision of what North America might become" and as such did not provide the proper context that would allow the initiative to deal with barriers to deeper integration. Another problem seen with the dialogue was that it operated from a
North American integration
20298019
standards which were agreed as part of the Final BEPS package . Given, however, that each of those minimum standards can be satisfied in multiple different ways, and given the broad range of countries and jurisdictions involved in the development of the BEPS multilateral instrument, the BEPS multilateral instrument gives flexibilities with respect to ways of meeting it while remaining consistent with its purpose. The BEPS multilateral instrument also provides flexibility by allowing to opt out of provisions which do not reflect a BEPS minimum standard. A list of parties to the convention is shown below. Including these parties, 83
Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting
14632861
from OFCs than major IFCs/RFCs. There is evidence that OFCs have faster approval times, even 24 hours, for approval of new legal structures and special purpose vehicles, however critics highlight this aspect as a sign of weaker regulation and oversight in OFCs (e.g. brass plate company). One of the most important service lines for OFCs is in providing legal structures for global securitisation transactions for all types of asset classes, including aircraft finance, shipping finance, equipment finance, and collateralised loan vehicles. OFCs provide what are called "tax neutral" special purpose vehicles ("SPVs") where no taxes, VAT, levies or duties are
Offshore financial centre
11299313
and tax payments. They are usually more limited to the expected costs of running the aforementioned government operations through tax income as opposed to describing the status of any government fixed assets and investment wealth. A CAFR is a report of the complete overall financial results not just for the year but what has accumulated since the inception of that local government of both those "specific groupings" of government agencies that appear in the current fiscal year General Purpose Budget and all other agencies and departments. These can be autonomous, enterprise (for example government or city owned golf courses), recycling,
Comprehensive annual financial report
2572556
specified in a treaty, which may enhance or override local law. It is possible under most treaties for an entity to be resident in both countries, particularly where a treaty is between two countries that use different standards for residence under their domestic law. Some treaties provide “tie breaker” rules for entity residency, some do not. Residency is irrelevant in the case of some entities and/or types of income, as members of the entity rather than the entity are subject to tax. The OECD has moved away from place of effective mangement to a case-by-case resolution using Mutual Agreement Procedure
Tax treaty
20655109
what they referred to as a special tax arrangement between Apple and Ireland which allowed Apple to pay a corporate tax rate of less than 2%. In June 2014, an investigation was opened by the European Commissioner for Competition on behalf of the EU Commission (SA 38373). The Ireland case was opened in conjunction with two other similar cases; involving Starbucks (Netherlands) and Fiat (Luxembourg). The Commissioner noted concerns that discretion in transfer pricing rules had been used to give Apple selective advantage. They believed that this violated Article 107(1) of the Treaty on the Functioning of the European Union
EU illegal State aid case against Apple in Ireland
1854954
higher tariffs on Portuguese goods, and the Irish Volunteers' 1782 Dungannon resolutions included calls for a boycott of its wines. The 1786 Eden Agreement between Britain and France caused Portugal to relent in 1787 and allow Ireland low tariffs. Methuen Treaty The Methuen Treaty was a military and commercial treaty between England and Portugal that was signed in 1703 as part of the War of the Spanish Succession. The treaty stipulated that no tax higher than the tax charged for an equal amount of French wines could be charged for Portuguese wines "(but see below)" exported to England, and that
Methuen Treaty
1854945
Methuen Treaty The Methuen Treaty was a military and commercial treaty between England and Portugal that was signed in 1703 as part of the War of the Spanish Succession. The treaty stipulated that no tax higher than the tax charged for an equal amount of French wines could be charged for Portuguese wines "(but see below)" exported to England, and that no English textiles exported to Portugal would be charged any taxes, regardless of the geopolitical situation in each of the two nations (to ensure England would still accept Portuguese wine in periods when not at war with France). Results
Methuen Treaty
201950
new energy efficiency tax credit, a ban on incandescent bulbs from January 2009, a tax scheme incentivising commuters' purchases of bicycles and a new scale of vehicle registration tax based on carbon emissions. At a special convention on whether to support the Treaty of Lisbon on 19 January 2008, the party voted 63.5% in favour of supporting the Treaty; this fell short of the party's two-third majority requirement for policy issues. As a result, the Green Party did not have an official campaign in the first Lisbon Treaty referendum, although individual members were involved on different sides. The referendum did
Green Party (Ireland)
2572565
tangible movable property situated in the taxing country at the time of transfer (often excluding ships and aircraft operated internationally), and certain other items. Most treaties permit the estate or donor to claim certain deductions, exemptions, or credits in calculating the tax that might not otherwise be allowed to non-domiciliaries. Nearly all tax treaties provide a specific mechanism for eliminating it, but the risk of double taxation is still potentially present. This mechanism usually requires that each country grant a credit for the taxes of the other country to reduce the taxes of a resident of the country. The treaty
Tax treaty
657264
regime". Through their "chartered regime", these communities are allowed to levy and collect all so-called "contracted taxes", including income tax and corporate tax, and they have much more flexibility to lower or raise them. This "chartered" or "foral" contract entails true financial autonomy. Since they collect almost all taxes, they send to the central government a pre-arranged amount known as "cupo", "quota" or "aportación", "contribution", and the treaty whereby this system is recognized is known as "concierto", "treaty", or "convenio", "pact". Hence they are also said to have "concierto económico", an "economic treaty". Since they collect all taxes themselves and
Autonomous communities of Spain
12253836
taxpayer must have had a "substantial purpose" for entering into the transaction, apart from the Federal income tax effects. References to the Economic Substance Doctrine were enacted as subsection (o) of section 7701 of the Internal Revenue Code by section 1409 of the Health Care and Education Reconciliation Act of 2010. Economic substance Economic substance is a doctrine in the tax law of the United States under which a transaction must have both a substantial purpose aside from reduction of tax liability and an economic effect aside from the tax effect in order to be considered valid. This doctrine is
Economic substance
15712222
Tägerwilen but only the property tax to the canton of Thurgau. Property owners living in Thurgau do pay income tax, but are exempt from the Swiss property tax. Legal historian Hans-Wolfgang Strätz holds the view that the treaty makes the City of Constance de jure a municipality in Thurgau, with all the rights and obligations this entails, even if the City does not itself carry out some of the responsibilities. In February 2006, the municipalities of Constance, Kreuzlingen and Tägerwilen announced that they will seek to have the 175-year-old treaty revised. Since the legal successors of the treaty signatories, the
Tägermoos
778323
on mortgages. Barbados has several bilateral tax treaties, mostly aimed at removing double taxation on companies that operate in the Barbados economy. Since Barbados is at times considered an expensive place to conduct business, the treaties are mainly a measure to provide some savings to international businesses that operate in Barbados. Countries that Barbados has taxation agreements with include: "Source:" Barbados Government website containing the text of the majority of the above tax treaties The bilateral tax treaty negotiated with Canada in particular has been a political-football for the government of that country. The treaty was made to allow the
Economy of Barbados
6108938
Ramsay principle "Ramsay principle" is the shorthand name given to the decision of the House of Lords in two important cases in the field of UK tax, reported in 1982: In summary, companies that had made substantial capital gains had entered into complex and self-cancelling series of transactions that had generated artificial capital losses, for the purpose of avoiding capital gains tax. The House of Lords decided that where a transaction has pre-arranged artificial steps that serve no commercial purpose other than to save tax, the proper approach is to tax the effect of the transaction as a whole. The
Ramsay principle
20627577
and taxation wappers (i.e. Section 110 SPVs) for money to get into, and out of, the Sink OFCs. Irish Section 110 Special Purpose Vehicle (SPV) An Irish Section 110 special purpose vehicle (SPV) or section 110 company, is an Irish tax resident company, which qualifies under "Section 110" of the "Irish Taxes Consolidation Act 1997" (TCA) for a special tax regime that enables the SPV to attain "tax neutrality": i.e. the SPV pays no Irish taxes, VAT, or duties. Section 110 was created in 1997 to help International Financial Services Centre (IFSC) legal and accounting firms compete for the administration
Irish Section 110 Special Purpose Vehicle (SPV)
20627539
Irish Section 110 Special Purpose Vehicle (SPV) An Irish Section 110 special purpose vehicle (SPV) or section 110 company, is an Irish tax resident company, which qualifies under "Section 110" of the "Irish Taxes Consolidation Act 1997" (TCA) for a special tax regime that enables the SPV to attain "tax neutrality": i.e. the SPV pays no Irish taxes, VAT, or duties. Section 110 was created in 1997 to help International Financial Services Centre (IFSC) legal and accounting firms compete for the administration of global securitisation deals, and by 2017 was the largest structured finance vehicle in EU securitisation. Section 110
Irish Section 110 Special Purpose Vehicle (SPV)
4063260
we'll come out $100,000 ahead." Although many Rochdale founders viewed its education program as a form of tax avoidance, those who were dedicated to Rochdale as an educational institution did not let that deter them from pursuing what they viewed as a more noble purpose. Dennis Lee, the creative talent of the operation, notes plans like the tax avoidance scheme were, "primarily in the thinking of people like Howard who were involved in the planning, they did a good job of keeping their cards fairly close to their chest. It was not something that was being passed around generally, [...]
Rochdale College
4058041
standard withholding tax rate of interest and royalty under domestic law is both 20%. According to the newest tax treaty China signed with Russia, the withholding tax rate of interest is 0 and the withholding tax rate of royalty is 6%. This can obviously reduce the tax cost of enterprises, increase the willing of "going global" and the competitiveness of domestic enterprises, and bring the goodness. Though signing double taxation avoidance agreement is a way to solve the tax problems, there still can be other problems led out, or we can call it "side effect". The intention of tax treaties
Double taxation
3616354
included in income by the shareholder resident in the United Kingdom or certain treaty countries, and treated as a payment of tax by the shareholder. To the extent that deemed tax payment exceeded taxes otherwise due, it was refundable to the shareholder. Many jurisdictions incorporate some sort of alternative tax computation. These computations may be based on assets, capital, wages, or some alternative measure of taxable income. Often the alternative tax functions as a minimum tax. United States federal income tax incorporates an alternative minimum tax. This tax is computed at a lower tax rate (20% for corporations), and imposed
Corporate tax
2031603
input credit. Some systems allow the excess of input credits over VAT obligations to be refunded after a period of time. Income tax systems that impose tax on residents on their worldwide income tend to grant a foreign tax credit for foreign income taxes paid on the same income. The credit often is limited based on the amount of foreign income. The credit may be granted under domestic law and/or tax treaty. The credit is generally granted to individuals and entities, and is generally nonrefundable. See Foreign tax credit for more comprehensive information on this complex subject. Several tax systems
Tax credit
11248501
what is required for an activity to rise to the level of a "trade or business" for tax purposes. The particular question presented in this case was whether a full-time gambler who made wagers for his own account was engaged in a "trade or business." In the absence of an all-purpose definition by statute or regulation, the Court decided not to create a specific test to determine what qualifies as a trade or business. Instead, the Court found that such a decision requires an examination of the facts in each case. As for gambling in particular, the Court concluded that
Commissioner v. Groetzinger
2394922
often perceived as onerous, governments have struggled with tax noncompliance since the earliest of times. The use of the terms tax avoidance and tax evasion can vary depending on the jurisdiction. In general, the term "evasion" applies to illegal actions and "avoidance" to actions within the law. The term "mitigation" is also used in some jurisdictions to further distinguish actions within the original purpose of the relevant provision from those actions that are within the letter of the law, but do not achieve its purpose. As the difference between the two concepts is currently becoming less clear, law professor Allison
Tax noncompliance
14156133
a tax, were an active topic of speculation in the financial community, which expected them to follow Basel III definitions with further refinements. Although every financial transaction tax (FTT) proposal has its own specific intended purpose, there are some general intended purposes which are common to most of them. Below are some of those general commonalities. The intended purpose may or may not be achieved. In 1936, when Keynes first proposed a financial transaction tax, he wrote, "Speculators may do no harm as bubbles on a steady stream of enterprise. But the situation is serious when enterprise becomes the bubble
Financial transaction tax
9739541
parties to the treaty. This principle is codified in international law by article 20(2) of the Vienna Convention on the Law of Treaties: When it appears from the limited number of the negotiating states and the object and purpose of a treaty that the application of the treaty in its entirety between all the parties is an essential condition of the consent of each one to be bound by the treaty, a reservation requires acceptance by all the parties. An example of a plurilateral treaty is the Antarctic Treaty, signed on 1 December 1959. Multilateral treaty A multilateral treaty is
Multilateral treaty
8685928
Tax Justice Network The Tax Justice Network (or TJN), is an independent advocacy group consisting of a coalition of international researchers and activists with a shared concern about tax avoidance, tax competition, tax evasion, and tax havens. It has a particular focus on offshore financial centres that behave as corporate tax havens. The Tax Justice Network gathers organizations, social movements, and advocates for international tax cooperation, and against tax evasion and tax competition. TJN's goal is to achieve progressive, democratic, and socially just tax systems. It carries out campaigns from an internationalist perspective whose purpose is to develop a fiscal
Tax Justice Network
6443128
These treaties reduce the chance of double taxation by allowing each country to fully tax its citizens and residents and reducing the amount the other country can tax them. Generally the treaties provide for reduced rates of tax on investment income and limits as to which business income can be taxed. The treaties each define which taxpayers can benefit from the treaty. The United States social insurance system is funded by a tax similar to an income tax. Social Security tax of 6.2% is imposed on wages paid to employees. The tax is imposed on both the employer and the
Income tax in the United States
13548683
for the purpose of hindering commerce on the Danube and increasing that of Odessa." Meanwhile, Russia continued to levy its taxes (it was estimated that the total tax burden amounted to 50 percent of the produce), and the channel remained clogged. Even the Austrians were upset with this, and the Treaty of St. Petersburg was renewed only once before they allowed it to lapse. It was Napoleonic France at the Congress of Rastatt in 1798 that made the first public governmental proposal for internationalizing the great river, but "it was doomed to failure for political reasons," meeting with resistance from
Internationalization of the Danube River
5418600
to retire from politics not to run for reelection in 1920, due to his failing hearing, which prevented him from hearing what was said on the Senate floor. He served as chairman of the Committee on the District of Columbia during the Sixty-sixth Congress. As one of the group of senators known as the "irreconcilables" or the "bitter-enders", Sherman opposed the ratification of the Treaty of Versailles and of U.S. involvement in the League of Nations, and according to Historian Aaron Chandler, played a key role in its defeat. He characterized the treaty as "humanitarian in purpose, but impracticable in
Lawrence Yates Sherman
6980429
Chambers of Reunion The Chambers of Reunion ("Chambres des Réunions") were French courts established by King Louis XIV in the early 1680s. The purpose of these courts was to increase French territory. Louis had been expanding the borders of France in a series of wars. Territory was gained in the Treaty of Nijmegen in 1679 and the Treaty of Aix-la-Chapelle in 1668. The courts' job was to determine what dependencies, if any, had belonged to the areas incorporated into France by these treaties. In doing so, places such as Saarbrücken, Luxembourg, Zweibrücken and Strasbourg were annexed to France. Louis based
Chambers of Reunion
6980426
Chambers of Reunion The Chambers of Reunion ("Chambres des Réunions") were French courts established by King Louis XIV in the early 1680s. The purpose of these courts was to increase French territory. Louis had been expanding the borders of France in a series of wars. Territory was gained in the Treaty of Nijmegen in 1679 and the Treaty of Aix-la-Chapelle in 1668. The courts' job was to determine what dependencies, if any, had belonged to the areas incorporated into France by these treaties. In doing so, places such as Saarbrücken, Luxembourg, Zweibrücken and Strasbourg were annexed to France. Louis based
Chambers of Reunion
6382345
income tax on certain enumerated types of U.S. source income, generally collected as a withholding tax. The rate of tax is 30% of the gross income, unless reduced by a tax treaty. Nonresident aliens are subject to U.S. federal income tax on some, but not all capital gains. Wages may be treated as effectively connected income, or may be subject to the flat 30% tax, depending on the facts and circumstances. Standard US tax texts: US IRS materials: Scholarly Writing: Gross income Gross income is all a person's receipts and gains from all sources, before any deductions. The adjective "gross",
Gross income
12448366
subject to a different regime for estate tax than U.S. citizens and residents. The estate tax is imposed only on the part of the gross non-resident alien's estate that at the time of death is situated in the United States. These rules may be ameliorated by an estate tax treaty. The U.S. does not maintain as many estate tax treaties as income tax treaties, but there are estate tax treaties in place with many of the major European countries, Australia, and Japan. U.S. real estate owned by a non-resident alien through a foreign corporation is not included in a non-resident
Estate tax in the United States
6911316
authorities, the Greek beneficial owner will be entitled to a refund for the difference between the anticipatory tax (500*0.35=175) and the maximum tax under the double tax treaty (500*0.10=50), which is 175-50=125. So, the actual tax burden in Switzerland after the application of the refund procedure is EUR 50. Now if the Greek domestic tax on the inbound interest income is 10%, it would in principle be levied on a gross basis, i.e. the tax base would be the full amount of interest income received (EUR 500). The Greek tax liability would be 500*0.10=50. However, under Art. 22 of the
European Union withholding tax
4590637
services, interest, dividends, rents, royalties, annuities, and certain other payments. Tax is withheld at 30% of the gross amount of the payment. This withholding rate may be reduced under a tax treaty. This tax withheld is usually considered a final determination and payment of tax, requiring no further action or tax return by the foreign person. In addition, partnerships are required to make tax payments (referred to as withholding) on behalf of foreign partners. These payments are required regardless of whether income is actually distributed to the partner. Payments are also required quarterly or at year end for business income
Tax withholding in the United States
2394921
technically legal but not for a business purpose or in violation of the spirit of the tax code. Related terms for tax avoidance include tax planning and tax sheltering. Individuals that do not comply with tax payment include tax protesters and tax resisters. Tax protesters attempt to evade the payment of taxes using alternative interpretations of the tax law, while tax resisters refuse to pay a tax for conscientious reasons. Tax protesters believe that taxation under the Federal Reserve is unconstitutional, while tax resisters are more concerned with not paying for particular government policies that they oppose. Because taxation is
Tax noncompliance