Oxford University Centre for Business Taxation CORPORATION TAX: BATTLING WITH THE BOUNDARIES

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1 Oxford University Centre for Business Taxation CORPORATION TAX: BATTLING WITH THE BOUNDARIES Conference June 28 th and 29 th, 2007 Said Business School, Oxford This two-day conference will explore two aspects of corporation tax that are of central importance in current policy debates in the UK. They concern the internal and external boundaries of the tax. The first considers issues in the regulation of the relationship between corporate taxpayers, government and other stakeholders through legislation, judicial developments, risk and relationship management. In the UK, the relationship between government and large businesses is developing beyond traditional compliance models. For example, we have recently seen the publication of the Varney Review, the announcement of HMRC s compliance risk assessment framework and a promise of formal consultation in Summer 2007 on new clearance procedures and advance rulings. Finding ways to deal with the uncertainties surrounding the boundaries of the law in terms of avoidance, tax planning and acceptable and unacceptable behaviour may prove to be a barrier to this development and requires further exploration and discussion. These topics will be tackled from economic, legal, policy and business perspectives in the first part of the conference. The second boundary is geographical: should the UK continue to tax dividends received by UK companies from foreign subsidiaries and seek to tax income of some subsidiaries even if not received in the UK? These have become practical questions as well as important theoretical debates in the light of various judgments made by the European Court of Justice. It was announced in 2007 Budget that the UK government will issue a consultation document in Spring 2007 which will consider in particular the taxation of

2 foreign dividends received by UK companies and associated CFC rules. This will be the topic of a second part of the conference. The conference aims to bring together experts from a variety of backgrounds, including academia, government, business and the professions. Speakers and panelists will include leading international figures from all of these groups. PROVISIONAL PROGRAMME JUNE Registration Introduction to the conference Michael Devereux, Director, Centre for Business Taxation Links between business and HMRC and managing uncertainty Dave Hartnett (HMRC) Jon Symonds (AstraZeneca) Judith Freedman, Geoffrey Loomer and John Vella Oxford University Law Faculty and Centre for Business Taxation Report on an OUCBT survey: Business Links and Managing Uncertainty Drawing up legal boundaries: a comparative review David Pickup (HMRC) Ed Liptak (Webber Wentzel Bowens) Coffee Experiences with statutory avoidance and disclosure rules Brian Arnold (Goodmans LLP, Toronto) Chris Evans (ATAX, University of New South Wales) Wolfgang Schön (Max Planck Institute, Munich) John Tiley (University of Cambridge) David Weisbach (University of Chicago)

3 Lunch Analyzing the impact of tax avoidance David Ulph (University of St Andrews) Mihir Desai (Harvard Business School) Michelle Hanlon (TBC) University of Michigan Graeme McDonald (University of Kent) Tea Beyond legal rules - tax risk, corporate governance and relationships with revenue authorities and intermediaries. Heather Self (Partner, Grant Thornton UK LLP) John Fox (BT) Chris Davidson (HMRC) Richard Happe (Tilburg University) Ross Fraser (Partner, Herbert Smith) Reuven Avi-Yonah (University of Michigan) Managing relationships and boundaries: the future Paul Morton (Reed Elsevier) Dave Hartnett (HMRC) Loughlin Hickey (KPMG) Rick Krever (Monash University) David Duff (University of Toronto) 7.00 Conference Dinner, Oriel College Speaker: Andrew Dilnot (Principal, St Hugh s College, Oxford)

4 JUNE Principles for international corporate taxation Michael Devereux (Centre for Business Taxation) Reuven Avi-Yonah (University of Michigan) Jack Mintz (University of Toronto) Coffee European Dimensions Implications of the European Court of Justice case law Stephen Bond (Centre for Business Taxation and Nuffield College, Oxford) Paul Farmer (European Commission) Philip Gillett (ICI) The Common Consolidated Corporate Tax Base Christoph Spengel (ZEW, Mannheim) Simon Loretz (Centre for Business Taxation) Lunch Experiences and lessons on alternative tax systems Coffee Harry Grubert (US Treasury) Eric Kemmeren (Tilburg University) Panel on the UK perspective Chair: Michael Devereux (Centre for Business Taxation) Malcolm Gammie, Q.C Edward Troup (HM Treasury) Ian Menzies-Conacher (Barclays) 4.0 Close

5 OUTLINE OF SESSIONS June 28 The problem of drawing a boundary between tax planning and tax avoidance, or unacceptable and acceptable taxpayer behaviour, is one that besets all tax jurisdictions. It raises fundamental questions about the nature of tax legislation, the role of the tax system and the relationship between taxpayers, intermediaries, the administration and government. This day of the conference explores the boundaries in the context of corporate taxpayers. Links between business and HMRC and managing uncertainty The UK s Varney review on links between HMRC and large business takes a new approach to risk management and compliance by large businesses. Identifying the boundary of the law and establishing more common ground on what constitutes unacceptable tax planning is at the core of this approach. This first session is opened by members of the Consultative Committee on the review of Links with Large Business, followed by a report on the initial findings of a pilot survey undertaken by the centre for Business Taxation on these issues which has included interviews with business representatives and HMRC. Drawing up legal boundaries: a comparative review David Pickup of HMRC will report on his survey of approaches to anti-avoidance legislation world-wide, undertaken for HMRC in Ed Liptak was employed by the South African Revenue Service (SARS) to advise them on the revision of their general anti-avoidance rule and produced two extensive consultative documents culminating in legislation. He is well palced to comment on the comparative work undertaken for this review and the reasons for the conclusions reached an implemented in South Africa. Experiences with statutory avoidance and disclosure rules Jurisdictions have taken very different approaches to dealing with avoidance ranging from specific anti-avoidance legislation to general anti-avoidance legislation and disclosure requirements. Expert speakers on the systems in Canada, Australia, the UK and the US will analyze the flaws and the positive aspects of the approaches taken in their jurisdictions. Analyzing the impact of tax avoidance Tax avoidance of both the acceptable and unacceptable kind may have an impact on revenue raised but it may also have other impacts on the tax system and on perceptions of investors and other taxpayers. Evidence of aggressive tax avoidance has been argued to have an impact on share price although the evidence is mixed and interacts with corporate

6 governance and accounting issues. This session examines economic, financial and accounting analysis of these issues.. Beyond legal rules - tax risk, corporate governance and relationships with revenue authorities and intermediaries The law appears to have been inadequate to tackle these issues of boundaries in the past although as discussed above, new methods may assist. Revenue authorities are also using new methods of risk management with, for example, enforcement covenants in the Netherlands and new arrangements for links between business and HMRC in the UK. Revenue authorities are stressing that tax is a corporate governance issue and some argue for companies to consider fairness and corporate social responsibility. Others argue that companies have a duty to pay only what is due under the law (having taken into account costs and risks of challenge, etc). But a middle ground needs to be found to create a workable tax system. How can this agenda be progressed? What light is being thrown on these issues by the current OECD Seoul initiative? Panel: Managing relationships and boundaries- the future This session will consist of short statements on future directions by the panel and time for discussion from the floor. June 29 Drawing a geographic boundary for taxing corporate profit has become increasingly problematic. Defining the location in which profit is generated is not only very difficult in practice, it is also open to question conceptually. Corporation tax rates have fallen significantly as governments seek to attract mobile capital and profit. And the European Court of Justice has made a number of decisions which limit the ability of member states to design their taxes. All of these issues bring into question the taxation of foreign source income, and of controlled foreign companies. Principles for international corporate taxation What does economic and legal theory say about the nature of the international taxation of corporate income? How far can clear distinctions be made between types of income and the place where income arises? Are there clear prescriptions in favour of one form of taxation over others? What are the implications for the taxation of foreign source income, and the allocation of expenses? Implications of the European Court of Justice Clearly the judgments of the ECJ have been important drivers of reform in the UK and elsewhere in the EU. What are the implications of these judgments for member states tax systems, including taxing income arising outside a country, either through the taxation of

7 dividends or through CFC legislation, and the treatment of interest? Do the ECJ judgments deliver a consistent set of principles for the design of country tax systems? How does uncertainty of the course taken by the Court affect policy options? The Common Consolidated Corporate Tax Base The major policy initiative on taxing international corporate income in the EU is the proposal for a common consolidated corporate tax base. What are the implications of such a reform? Would there be an improvement in economic efficiency, either through lower compliance costs or a more efficient allocation of capital? What would be the disadvantages and revenue implications of such a reform? Experiences and lessons on alternative tax systems A variety of tax systems have been, and continue to be, used in the EU and elsewhere. This session will review experiences elsewhere with alternative methods of taxing international income, and responding to tax systems elsewhere. It will include a discussion of the systems in the USA, the Netherlands and Ireland. Panel on the UK perspective The panel will address the specific policy issues facing the UK, and in particular, will comment on the consultation paper issued by the UK government. Each speaker will present a brief view; the remainder of the time would be devoted to discussion.

8 LIST OF SPEAKERS Brian Arnold (Goodmans LLP, Toronto) Reuven Avi-Yonah (University of Michigan) Stephen Bond (Centre for Business Taxation and Nuffield College, Oxford) Chris Davidson (HMRC) Mihir Desai (Harvard Business School) Michael Devereux (Centre for Business Taxation) Andrew Dilnot (Principal, St Hugh s College, Oxford) David Duff (University of Toronto) Chris Evans (ATAX, University of New South Wales) Paul Farmer (European Commission) John Fox (BT) Ross Fraser (Partner, Herbert Smith) Judith Freedman (Oxford University Law Faculty and Centre for Business Taxation) Malcolm Gammie, Q.C. Philip Gillett (ICI) Harry Grubert (US Treasury) Michelle Hanlon (University of Michigan) Richard Happe (Tilburg University) Dave Hartnett (HMRC) Loughlin Hickey (KPMG) Eric Kemmeren (Tilburg University) Rick Krever (Monash University) Ed Liptak (Webber Wentzel Bowens) Geoffrey Loomer (Oxford University Law Faculty and Centre for Business Taxation) Simon Loretz (Centre for Business Taxation, Oxford) Graeme McDonald (University of Kent) Ian Menzies-Conacher (Barclays) Jack Mintz (University of Toronto) Paul Morton (Reed Elsevier) David Pickup (HMRC) Wolfgang Schön (Max Planck Institute, Munich) Heather Self (Partner, Grant Thornton UK LLP) Christoph Spengel (ZEW, Mannheim) Jon Symonds (AstraZeneca) John Tiley (University of Cambridge) Edward Troup (HM Treasury) John Vella (Oxford University Law Faculty and Centre for Business Taxation) David Ulph (University of St Andrews) David Weisbach (University of Chicago)

ANNUAL SYMPOSIUM, 2013 Oxford, June SAID BUSINESS SCHOOL

ANNUAL SYMPOSIUM, 2013 Oxford, June 24 26 SAID BUSINESS SCHOOL PROGRAMME Monday June 24 2.00pm 2.45pm Registration and Chair: MICHAEL DEVEREUX (Centre for Business Taxation) 2.45pm 3.30pm JENNIFER BLOUIN