Principles of International Taxation

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1 Overview and Learning Objectives This course is designed to provide participants with the essentials of international taxation. The first three days are dedicated to the fundamental concepts relevant to the interpretation and application of international tax treaties. This introduction provides participants with the conceptual tools to fully grasp issues discussed on Day 4 and Day 5. Day 4 deals with the principles of transfer pricing and how these principles apply to intra-group services. Day 5 provides an overview of basic tax planning structures and an insight into the application of the most common antiavoidance provisions. This is an interactive course with a maximum of 30 participants. Prior to the course, participants will be given access to a documentation platform which provides them with additional pre-reading material and supplementary material (e.g. legal documentation, case law and related articles/literature). During the course, participants will be provided with a course binder containing documents relevant to the course. Who Should Attend? The course is suitable for practitioners in tax advisory firms, tax specialists in commerce and industry, government officials who regularly encounter issues related to cross-border taxation, and anyone who desires to deepen or develop a comprehensive understanding of international taxation principles. While the course is suitable for practising professionals, it may also be considered a useful starting point in the preparation for the CIOT examination Advanced Diploma in International Taxation (ADIT Paper I). Further information about this qualification can be found at Course Level and Prerequisites This is an introductory-level course. Participants should have a basic knowledge of the domestic law of at least one country as it relates to corporate taxation (taxation of foreign income derived by resident companies and domestic-source income received by non-resident companies). In addition, a very basic understanding of the function of double tax treaties would be helpful, but the course will proceed on the basis that course participants are new to dealing with treaties, so that they can get a full grasp of transfer pricing and tax planning issues on Day 4 and Day 5. Pre-Course Preparation In order to participate in this particular course, no advance preparation is necessary. However, for some courses, suggested reading materials may be made available on our documentation platform a few weeks before the start of the course.

2 Day 1 Basic Principles of International Tax Law Registration Welcome and IBFD Overview Introduction to International Tax Law (Tigran Mkrtchyan, E&Y, the Netherlands) Role of comprehensive tax treaties Relationship between tax treaties, domestic law and EU law The format and structure of a tax treaty (OECD and UN Models) Scopes of tax treaties Types of allocation rules in treaties Double tax reliefs Break Refreshments Residence (Tigran Mkrtchyan) The concept of residence individuals corporations US savings clause Treaty tiebreaker rules Dual residence issues Income from Immovable Property (Luis Nouel, IBFD, the Netherlands) Article 6 of OECD/UN Model What is income from immovable property? Immovable property company and associated issues (Tigran Mkrtchyan and Luis Nouel)

3 Day 2 Double Taxation Convention Focusing on the Current Version of the OECD Model Tax Convention Permanent Establishment Concept (Andreas Perdelwitz, IBFD, the Netherlands) Basic rules for the permanent establishment (PE) Concept Auxiliary and preparatory activities Construction site PEs Agency PEs Service PEs E-commerce Break Refreshments Permanent Establishment Concept (continued) (Andreas Perdelwitz) Taxation of Cross-Border Business Activities (Luis Nouel) Business Profits (Luis Nouel) Allocation of taxing rights over cross-border business activities under tax treaties articles 7, 8, 9, 14 and 21 Profits from shipping, inland waterways transport and air transport Income from independent personal services Taxation of technical services fees Article 7 OECD MTC Determination of business profits Arm's length principle Allocation of expenses Further developments Case study (Luis Nouel & Andreas Perdelwitz)

4 Day 3 Double Taxation Convention Focusing on the Current Version of the OECD Model Tax Convention Employment Income (Vanessa Arruda Ferreira, IBFD, the Netherlands) Taxation of dependent personal services General rules International hiring-out of labour Directors' fees Artistes and sportsmen Break Refreshments Passive Income (Ridha Hamzaoui, IBFD, the Netherlands) Taxation of cross-border dividends, interest and royalties Capital gains Article 21 OECD MTC Concept of beneficial ownership Non Discrimination and Triangular Cases (Carlos Gutiérrez Puente, IBFD, the Netherlands) Article 24 OECD MTC Non-discrimination and taxation of business profits Triangular cases involving PEs Non-discrimination and double taxation reliefs (Carlos Gutiérrez Puente and Vanessa Arruda Ferreira)

5 Day 4 Transfer Pricing Introduction to Transfer Pricing (Roberto Bernales, IBFD, the Netherlands) Significance of transfer pricing Legal framework associated enterprises arm's length principle Comparability Break Refreshments Introduction to Transfer Pricing (continued) (Roberto Bernales) Transfer pricing methodologies comparable uncontrolled price (CUP) cost-plus method resale price method profit split method transactional net margin method (TNMM) other methods Documentation Advanced pricing agreements Latest developments Case study Transfer Pricing and Intra-Group Services (Shee Boon Law, IBFD, the Netherlands) Introduction Identification of intra-group services Transfer pricing methods Service charge computation (Roberto Bernales and Shee Boon Law)

6 Day 5 Double Tax Treaties and International Tax Avoidance Double Tax Relief Methods (Richard Resch, IBFD, the Netherlands) Double tax relief methods Credit and exemption Losses and double tax relief Limitations on relief Conditions for relief Tax sparing credits Break Refreshments Basic Tax Planning Schemes (Harry Tonino, IBFD, the Netherlands and Ania Loniewska, IBFD, the Netherlands) Holding companies, hybrid entities and hybrid financial instruments Debt push-down and acquisition financing Double dips Withholding tax planning Financing structures Basic Tax Planning Schemes (continued) (Harry Tonino and Ania Loniewska) Break Refreshments Anti-Avoidance Rules (Shee Boon Law) GAAR Controlled foreign companies Anti-tax haven provisions LOB 1 Excluding: Money-laundering legislation and international tax avoidance (Paper I, Module IV, Part C); Co-operation between revenue authorities (Paper I, Module IV, Part D); Miscellaneous Topics (Paper I, Module V).