The interaction of domestic anti-avoidance rules with tax treaties
Author(s)
Editor(s)
Publisher
Neuchâtel
Date issued
2016
Subjects
tax avoidance treaty shopping rule shopping base erosion profit shifting transfer of residence tax deferral domestic anti-avoidance rules judicial doctrines sham substance over form economic substance step transaction business purpose abuse of law fraus legis statutory GAAR statutory SAAR anti-treaty shopping anti-rule shopping thin capitalization interest limitation anti base erosion rules controlled foreign company switch over clause exit taxes extended tax liability domestic law tax treaty treaty override abuse of tax treaties abuse of domestic law base erosion and profit shifting limitation of benefits clause guiding principle principal purpose test saving clause fundamental freedoms directives safeguard clause
Abstract
L’évasion fiscale, y compris les montages abusifs transfrontaliers, est contrecarrée au niveau du droit interne par l’application de règles anti-abus internes, telles que des règles jurisprudentielles ou des règles légales générales ou spécifiques anti-abus. La question se pose alors de connaître l’impact des conventions fiscales sur de telles règles anti-abus internes. Il est en général admis que les conventions fiscales constituent des règles limitant le droit interne, et que, en cas de conflit entre le droit interne et une convention fiscale, c’est celle-ci qui primera. Cependant, la question de savoir si cette position est correcte en ce qui concerne les règles anti-abus internes est très discutable, en particulier à la lumière de la mise à jour 2003 controversée du commentaire OCDE, de la mise à jour 2011 du Commentaire ONU et des résultats BEPS attendus de l’OCDE et du G20. Ainsi, l’auteur analyse dans sa thèse l’interaction entre des règles anti-abus internes et les conventions fiscales, et examine en particulier la question de savoir si les conséquences de l’application de règles anti-abus internes, que ce soit du point de vue de l’Etat de source ou de résidence, peuvent être limitées par des conventions fiscales. L’analyse prend en compte les divers changements proposés dans le domaine interne et conventionnel par le Plan d’Action BEPS, en particulier par l’action 6 concernant utilisation abusive des conventions fiscales. En outre, des recommandations de principe sont faites dans la thèse, sous la forme de dispositions conventionnelles pouvant être intégrées par les Etats dans leur réseau de conventions fiscales afin d’éviter que des conflits ne surgissent entre des règles anti-abus internes et des conventions fiscales.
Tax avoidance schemes, including cross-border tax avoidance schemes, are counteracted at the domestic law level through the application of domestic anti-avoidance rules such as judicial doctrines; statutory general anti-avoidance rules or statutory specific anti-avoidance rules. The issue then arises as to what is the impact of tax treaties on such domestic anti-avoidance rules. In general, it is accepted that tax treaties are rules that limit domestic law and if a conflict arises between the domestic law and tax treaty – the latter prevails. However, whether this position is correct with respect to domestic anti-avoidance rules is highly questionable, especially, in light of the 2003 controversial update to the OECD Commentary, the update to the UN Commentary in 2011 and the OECD/G20 BEPS deliverables. Accordingly, in the thesis, the author analyses the interaction of domestic anti-avoidance rules with tax treaties, in particular, the question of whether the effects of applying domestic anti-avoidance rules, from a source or residence States perspective, can be curtailed by tax treaties? The analysis takes into consideration the various domestic and tax treaty related changes proposed by the BEPS Action Plan, notably, Action 6 on preventing treaty abuse. Moreover, the thesis makes policy recommendations in the form of treaty provisions that States can incorporate in their tax treaty network in order to ensure that conflicts do not arise between domestic anti-avoidance rules and tax treaties.
Tax avoidance schemes, including cross-border tax avoidance schemes, are counteracted at the domestic law level through the application of domestic anti-avoidance rules such as judicial doctrines; statutory general anti-avoidance rules or statutory specific anti-avoidance rules. The issue then arises as to what is the impact of tax treaties on such domestic anti-avoidance rules. In general, it is accepted that tax treaties are rules that limit domestic law and if a conflict arises between the domestic law and tax treaty – the latter prevails. However, whether this position is correct with respect to domestic anti-avoidance rules is highly questionable, especially, in light of the 2003 controversial update to the OECD Commentary, the update to the UN Commentary in 2011 and the OECD/G20 BEPS deliverables. Accordingly, in the thesis, the author analyses the interaction of domestic anti-avoidance rules with tax treaties, in particular, the question of whether the effects of applying domestic anti-avoidance rules, from a source or residence States perspective, can be curtailed by tax treaties? The analysis takes into consideration the various domestic and tax treaty related changes proposed by the BEPS Action Plan, notably, Action 6 on preventing treaty abuse. Moreover, the thesis makes policy recommendations in the form of treaty provisions that States can incorporate in their tax treaty network in order to ensure that conflicts do not arise between domestic anti-avoidance rules and tax treaties.
Notes
Doctorat, Université de Neuchâtel, Faculté de droiit
Publication type
doctoral thesis
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