Index to Principals of International Taxation, 3rd Edition

A

Acceptable distribution policy

controlled foreign companies, and 13.15

Advance pricing agreements

contents of request 15.48

generally 15.47

stages in negotiation 15.49

Agents

permanent establishments, and

case law 8.9

generally 8.8

problem areas 8.10

Allowances

employees working abroad, and 11.8

Anti-conduit clauses

bone fide provisions 16.15

'business activity' test 16.15

channel approach 16.14

'equivalents benefits' test 16.15

exclusion approach 16.12

general motive test 16.15

generally 16.10

'look-through' approach 16.11

'stock market quotation' test 16.15

subject-to-tax approach 16.13

Anti-haven legislation

acceptable distribution policy 13.15

application of 'lower level of taxation' test 13.9

apportionment to shareholders 13.18

background 13.3

captive insurance companies 13.20

comparative law 13.3

consequences of status 13.8

'control' 13.6

country-by-country reporting 14.23

definitions 13.6

dividend paid following CFC charge 13.19

double tax relief, and 6.11

economic sanctions 14.2

EU law, and

Cadbury Schweppes case 13.22

Vodafone 2 case 13.23

exchange controls 13.1

exempt activities

generally 13.12

intermediate holding companies, and 13.14

'nature of the business' 13.13

general approach 13.4

generally 13.2

grounds for exemption

acceptable distribution policy 13.15

conditions applicable in all cases 13.12–13.16

exempt activities 13.12–13.14

introduction 13.11

motive test 13.16

special conditions for EEA-resident subsidiaries 13.17

intermediate holding companies, and 13.14

introduction 13.1

legal action against intermediaries facilitating investment

Barclays Bank plc case 14.22

generally 14.19

PayPal case 14.20

UBS case 14.21

legality 13.5

locational factor 13.10

'lower level of taxation'

application 13.9

old rules, under 13.6

meaning 13.2

motive test 13.16

overview 13.1

policy

country-by-country reporting 14.23

economic sanctions 14.2

introduction, 14.1

legal action against intermediaries facilitating investment 14.19–14.22

political sanctions 14.2

summary 14.24

tax amnesties 14.13

tax competition 14.3–14.11

tax information exchange agreements 14.12

UK voluntary disclosure programmes 14.15–14.18

US OVDP 14.14

political sanctions 14.2

protected cell companies 13.21

reform proposals and responses

Denmark 13.26

France 13.27

Germany 13.28

Italy 13.29

Spain 13.30

Sweden 13.25

UK 13.23–13.24

residence

introduction 13.1

old rules, under 13.7

summary 13.31

tax amnesties

generally 14.13

UK voluntary disclosure programmes 14.15–14.18

US OVDP 14.14

tax credits 13.18

tax competition

case of Niue, and 14.11

direct investment 14.5

EU Code of Conduct 14.8

extent of harm caused 14.7

generally 14.3

G20 intervention 14.10

OECD Forum on Harmful Tax Practices 14.6

portfolio investment 14.4

tax information exchange agreements 14.12

transfer pricing 13.1

UK legislation 13.6–13.7

UK voluntary disclosure programmes

generally 14.15

problems 14.18

UK-Liechtenstein TEA 14.16

UK-Switzerland TEA 14.17

US Offshore Voluntary Disclosure Program (OVDP) 14.14

Arm's length principle

(see and see Transfer pricing)

alternative approach 15.53

best method rule 15.13

comparable profits method 15.18

comparable uncontrolled price 15.14

cost plus 15.16

factors determining comparability

contractual terms 15.9

economic conditions 15.11

identification of functions performed 15.8

introduction 15.7

property or services 15.12

risks 15.10

generally 15.4

legislative history 15.5

net margin method 15.18

OECD's role 15.6–15.7

other profit based methods 15.21

problem areas 15.52

profits split method 15.19

resale price minus 15.15

transaction based methods

best method rule 15.13

comparable uncontrolled price 15.14

cost plus 15.16

generally 15.13

introduction 15.7

resale price minus 15.15

transactional profits based methods

comparable profits method 15.18

generally 15.17

introduction 15.7

net margin method 15.18

profits split method 15.19

Artistes

double tax treaties, and 7.33

Auxiliary activities

permanent establishments, and 8.7

Avoidance

anti-haven legislation

apportionment to shareholders 13.18–13.19

captive insurance companies 13.20

controlled foreign companies 13.2–13.17

EU law, and 13.22–13.30

introduction 13.1

protected cell companies 13.21

summary 13.31

generally 1.19

B

Berry ratio

transfer pricing, and 15.21

Best method rule

transfer pricing, and 15.13

Bilateral treaties

generally 2.3

introduction 2.2

Branches

inward investment into UK, and 10.6

outward investment by UK company, and 10.10

thin capitalisation, and 15.37

C

Capital

double tax treaties, and 7.38

Capital export neutrality

double tax relief, and 5.5

Capital gains

double tax treaties, and 7.28

generally 1.12

Captive insurance companies

generally 13.20

Carousel fraud

approaches to tackling 19.26

generally 19.23

involving non-EU country 19.25

Central management and control

Bullock v Unit Construction decision 4.5

consequences 4.11

De Beers decision 4.4

finance and dividend policy 4.7

introduction 4.3

News Datacom decision 4.10

R v Dimsey decision 4.8

shareholders' role 4.6

summary 4.12

Wood v Holden decision 4.9

Collection of taxes

double tax treaties, and 7.45

Coming to UK to work

becoming ordinarily resident 11.11

becoming resident 11.10

generally 11.9

national insurance contributions 11.26

resident but not ordinarily resident in UK 11.12

Commissionaire structures

permanent establishments, and 8.12

Common consolidated corporate tax base (CCCTB)

accounting issues 18.19

administrative saving 18.17

allocation between different countries 18.22

anti-abuse rules 18.27

cross-border loss relief 18.20

effects on intra-EU cross-border tax planning 18.18

example 18.16

feasibility 18.23

fiscal sovereignty issue 18.25

introduction 18.15

loss relief 18.20

potential benefits 18.26

reaction of member states 18.24

subsidiarity principle 18.25

transfer pricing issues 18.21

Comparable profits method

transfer pricing, and 15.18

Comparable uncontrolled price method

transfer pricing, and 15.14

Comparative taxation

generally, 1.20

Compliance

generally 1.17

Conduit companies

Treaty shopping, and 16.2

Consumption taxes

generally 1.9

Controlled foreign companies

acceptable distribution policy 13.15

application of 'lower level of taxation' test 13.9

apportionment to shareholders 13.18

background 13.3

captive insurance companies 13.20

comparative law 13.3

consequences of status 13.8

'control' 13.6

definitions 13.6

dividend paid following CFC charge 13.19

double tax relief, and 6.11

EU law, and

Cadbury Schweppes case 13.22

Vodafone 2 case 13.23

exchange controls 13.1

exempt activities

generally 13.12

intermediate holding companies, and 13.14

'nature of the business' 13.13

general approach 13.4

generally 13.2

grounds for exemption

acceptable distribution policy 13.15

conditions applicable in all cases 13.12–13.16

exempt activities 13.12–13.14

introduction 13.11

motive test 13.16

special conditions for EEA-resident subsidiaries 13.17

intermediate holding companies, and 13.14

introduction 13.1

legality 13.5

locational factor 13.10

'lower level of taxation'

application 13.9

old rules, under 13.6

meaning 13.2

motive test 13.16

overview 13.1

protected cell companies 13.21

reform proposals and responses

Denmark 13.26

France 13.27

Germany 13.28

Italy 13.29

Spain 13.30

Sweden 13.25

UK 13.23–13.24

residence

introduction 13.1

old rules, under 13.7

summary 13.31

tax credits 13.18

transfer pricing 13.1

UK legislation 13.6–13.7

Corporation tax

Administration Cooperation in the Field of Taxation Directive 18.10

agreements between states

EEA Agreement 18.14

EU-Swiss Agreement 18.13

case decisions

Avoir Fiscal 18.41

Bosal Holding 18.44

Cadbury Schweppes 18.51

Commerzbank 18.42

Denkavit 18.45

Deutsche Shell 18.56

ELISA 18.59

entitlement to payments or deductions from tax authority 18.41–18.47

Etablissements Rimbaud 18.60

Futura Participations 1.52

Gilly 18.48

interaction between EU law and bilateral treaties 18.48–18.49

introduction 18.40

Lankhorst 18.50

Lidl Belgium 18.57

Manninen 18.46

Marks & Spencer 18.53

Metallgesellschaft/Hoechst 18.43

mutual assistance 18.59–18.60

Oy AA 18.54

Papillon 18.55

Philips Electronics UK Ltd 18.58

Saint-Gobain 18.49

set-off of losses cross border 18.52–18.58

tax avoidance 18.50–18.51

Truck Center 18.47

common consolidated corporate tax base (CCCTB)

accounting issues 18.19

administrative saving 18.17

allocation between different countries 18.22

anti-abuse rules 18.27

cross-border loss relief 18.20

effects on intra-EU cross-border tax planning 18.18

example 18.16

feasibility 18.23

fiscal sovereignty issue 18.25

introduction 18.15

loss relief 18.20

potential benefits 18.26

reaction of member states 18.24

subsidiarity principle 18.25

transfer pricing issues 18.21

constitutional issues 18.3

Directives

Administration Cooperation in the Field of Taxation 18.10

introduction 18.4

Merger 18.5–18.6

Mutual Assistance for Recovery of Tax Claims 18.9

Parent/Subsidiary 18.7

Royalties 18.8

Savings 18.11–18.12

EEA Agreement 18.14

EU principles

constitutional issues 18.3

fundamental freedoms 18.2

EU Savings Directive 18.11–18.12

EU-Swiss Agreement 18.13

European Corporate Income Tax (EUCIT) 18.37

fundamental freedoms 18.2

generally 1.13

group litigation 18.61

harmonisation of direct taxation

common consolidated corporate tax base 18.15–18.27

European corporate income tax 18.37

home state taxation 18.28–18.35

home state taxation

administrative issues 18.35

apportionment issue 18.29

constitutional issues 18.30

discrimination, and 18.34

double tax treaties, and 18.33

enforcement 18.31

example 18.37

generally 18.28

'group' 18.32

practical issues 18.35

Interest and Royalties Directive 18.8

introduction 18.1

Merger Directive 18.5–18.6

Mutual Assistance for Recovery of Tax Claims Directive 18.9

Parent/Subsidiary Directive 18.7

Royalties Directive 18.8

Savings Directive 18.11–18.12

Societas Europaea

generally 18.38

tax treatment 18.39

summary 18.63

Cost plus method

transfer pricing, and 15.16

Cost sharing arrangements

transfer pricing, and 15.22–15.23

Credit method of double tax relief

choice 5.4–5.6

complexity 5.7

generally 5.3

Cross-border enforcement of taxes

generally 2.9

Cross-border services

construction permanent establishments, in 9.8

deemed services permanent establishments

OECD Model Tax Convention 9.11–9.12

UN Model Tax Convention 9.10

insurance services 9.9

introduction 9.1

OECD Model Tax Convention

construction permanent establishments 9.8

deemed services permanent establishments 9.11–9.12

generally 9.7

insurance services 9.9

interaction of articles in other treaties 9.14

introduction 9.1

royalties 9.13

scale of trade 9.2

summary 9.15

tax treatment

GATS Modes 1 and 2 9.4

GATS Mode 3 9.5

GATS Mode 4 9.6

technical service fees 9.13

types 9.3

UN Model Tax Convention 9.10

Cross border tax arbitrage

different treatment of same entity for tax purposes 10.32

double dipping

creditable foreign tax payment 10.29

deductible interest payment 10.29

generally 10.28

lease payments 10.30

dual resident company losses 10.33

'entity classification' 10.31

hybrid financial instruments

generally 10.26

OECD guidance on treatment 10.27

interest deduction restrictions

generally 10.35

reference to global tax liabilities, by 10.36

introduction 10.25

repos 10.34

Customs duties

EU Customs Union 19.41

GATT, and 19.43

generally 19.40

introduction 19.39

meaning 19.39

smuggling 19.47

summary 19.48

suspension arrangements 19.45

time of payment 19.44

transit procedures 19.45

warehousing, and 19.46

D

Deduction method

double tax relief, and 5.3

Development

administration of incentives 20.5

attracting foreign direct investment

introduction 20.2

investment allowances and credits 20.4

purpose 20.6

reduced corporate tax rates 20.3

tax holidays 20.3

classification of countries 20.1

effect of 2008 financial crisis 20.8

home country dilution of incentives 20.7

introduction 20.1

investment allowances and credits 20.4

reduced corporate tax rates 20.3

summary 20.10

tax competition 20.9

tax holidays 20.3

tax incentives

administration 20.5

home country dilution 20.7

introduction 20.2

investment allowances and credits 20.4

purpose 20.6

reduced corporate tax rates 20.3

tax holidays 20.3

UNCTAD 20.1

Directors' fees

double tax treaties, and 7.32

Dividends

double tax relief, and

anti-avoidance rules 6.22

background 6.9–6.12

banks 6.23

controlled companies, and 6.17

effect of new rules 6.25

insurance companies 6.23

non-redeemable ordinary shares, and 6.18

exempt payments 6.15–6.21

generally 6.13

portfolio holdings, and 6.18

shares account, and 6.21

small companies 6.14

transactions not designed to reduce tax, and 6.20

double tax treaties, and 7.25

multinational groups of companies, and 10.15

Domicile

choice, of 3.25

deemed 3.26

introduction 3.24

origin, of 3.24

Double dipping

creditable foreign tax payment 10.29

deductible interest payment 10.29

generally 10.28

lease payments 10.30

Double tax

basic position 5.2

concepts of international tax, and

cross-border enforcement 2.9

federal taxes 2.4

generally 2.3

introduction 2.2

local taxes 2.4

supra-national organisations 2.8

cross-border enforcement, and 2.9

federal taxes, and 2.4

introduction 5.1

local taxes, and 2.4

relief

(see and see Double tax relief)

generally 5.3–5.8

practice, in 6.1–6.27

summary 5.10

supra-national organisations, and 2.8

treaties

(see and see Double tax treaties)

generally 7.1–7.28

relief, and 5.3

withholding tax 5.9

protocols 7.11

purposes 7.1

ratification 7.1

relationship with domestic law 7.2–7.4

relationship with EU law 7.5–7.6

relief, and 5.3

resident 7.20

royalties 7.27

signing 7.8

sportspersons 7.33

stages in life

effective date 7.10

entry into force 7.9

introduction 7.7

protocols 7.11

signing 7.8

stock options 7.31

students 7.36

summary 7.55

tax sparing 7.40

treaty override, and 7.4

UK practice 7.54

use limitations 7.52

Vienna Convention 1980, and 7.48

E

E-commerce

case law 17.6

electronic tax administration 17.8

introduction 17.1

permanent establishments

automated machines 17.3

generally 17.2

TAG reform proposals 17.5

UK position 17.4

summary 17.9

transfer pricing, and 17.7

Economic efficiency

evaluation of taxes, and 1.7

tax principles, and 2.5

Employee stock options

double tax treaties, and 7.31

Employees working abroad

allowances 11.8

duties partly carried out in UK 11.7

general principles 11.2

hiring out of labour 11.4

individuals coming to UK to work

becoming ordinarily resident 11.11

becoming resident 11.10

generally 11.9

national insurance contributions 11.26

individuals resident but not ordinarily resident in UK 11.12

individuals with foreign domicile and work for non-resident employer 11.19

international hiring out of labour 11.4

introduction 11.11

national insurance contributions

individuals coming to UK to work 11.26

UK residents going abroad to work 11.25

OECD Model Tax Convention 11.3

pension contributions 11.29

seafarers 11.24

share incentives, and 11.5

statutory residence test, and

conclusive non-residence in the UK 11.14

conclusive residence in the UK 11.15

introduction 11.13

not conclusively non-resident or resident in the UK 11.16–11.18

summary 11.30

tax equalisation arrangements 11.27

tax planning

generally 11.28

pension contributions 11.29

travelling expenses

family visits 11.22

generally 11.21

non-domiciled employees 11.23

UK residents going abroad to work

allowances 11.8

duties partly carried out in UK 11.7

generally 11.6

national insurance contributions 11.25

tax planning 11.28

Employment income

double tax treaties, and 7.30–7.31

Entertainers

double tax treaties, and 7.33

'Entity classification'

cross border tax arbitrage, and 10.31

Eurobond market

(see and see Tax havens)

generally 12.13

European Corporate Income Tax (EUCIT)

generally 18.37

European corporate taxation

Administration Cooperation in the Field of Taxation Directive 18.10

agreements between states

EEA Agreement 18.14

EU-Swiss Agreement 18.13

case decisions

Avoir Fiscal 18.41

Bosal Holding 18.44

Cadbury Schweppes 18.51

Commerzbank 18.42

Denkavit 18.45

Deutsche Shell 18.56

ELISA 18.59

entitlement to payments or deductions from tax authority 18.41–18.47

Etablissements Rimbaud 18.60

Futura Participations 1.52

Gilly 18.48

interaction between EU law and bilateral treaties 18.48–18.49

introduction 18.40

Lankhorst 18.50

Lidl Belgium 18.57

Manninen 18.46

Marks & Spencer 18.53

Metallgesellschaft/Hoechst 18.43

mutual assistance 18.59–18.60

Oy AA 18.54

Papillon 18.55

Philips Electronics UK Ltd 18.58

Saint-Gobain 18.49

set-off of losses cross border 18.52–18.58

tax avoidance 18.50–18.51

Truck Center 18.47

common consolidated corporate tax base (CCCTB)

accounting issues 18.19

administrative saving 18.17

allocation between different countries 18.22

anti-abuse rules 18.27

cross-border loss relief 18.20

effects on intra-EU cross-border tax planning 18.18

example 18.16

feasibility 18.23

fiscal sovereignty issue 18.25

introduction 18.15

loss relief 18.20

potential benefits 18.26

reaction of member states 18.24

subsidiarity principle 18.25

transfer pricing issues 18.21

constitutional issues 18.3

Directives

Administration Cooperation in the Field of Taxation 18.10

introduction 18.4

Merger 18.5–18.6

Mutual Assistance for Recovery of Tax Claims 18.9

Parent/Subsidiary 18.7

Royalties 18.8

Savings 18.11–18.12

EEA Agreement 18.14

EU principles

constitutional issues 18.3

fundamental freedoms 18.2

EU Savings Directive 18.11–18.12

EU-Swiss Agreement 18.13

European Corporate Income Tax (EUCIT) 18.37

fundamental freedoms 18.2

generally 1.13

group litigation 18.61

harmonisation of direct taxation

common consolidated corporate tax base 18.15–18.27

European corporate income tax 18.37

home state taxation 18.28–18.35

home state taxation

administrative issues 18.35

apportionment issue 18.29

constitutional issues 18.30

discrimination, and 18.34

double tax treaties, and 18.33

enforcement 18.31

example 18.37

generally 18.28

'group' 18.32

practical issues 18.35

Interest and Royalties Directive 18.8

introduction 18.1

Merger Directive 18.5–18.6

Mutual Assistance for Recovery of Tax Claims Directive 18.9

Parent/Subsidiary Directive 18.7

Royalties Directive 18.8

Savings Directive 18.11–18.12

Societas Europaea

generally 18.38

tax treatment 18.39

summary 18.63

Exchange controls

anti-haven legislation, and 13.1

Exchange of information

double tax treaties, and 7.44

Excise duties

GATT, and 19.43

generally 19.42

introduction 19.39

meaning 19.39

smuggling 19.47

suspension arrangements 19.45

time of payment 19.44

transit procedures 19.45

warehousing, and 19.46

Exemption method

double tax relief, and 5.3

Expenditures

generally 1.4

F

Federal taxes

generally 2.4

Fixed place of business

degree of permanence 8.5

'from which the business of the enterprise is wholly or partly carried on' 8.4

generally 8.3

UN Model Convention, and 8.25

Force of attraction principle

permanent establishments, and 8.27

Flat tax

generally 1.14

Foreign branches

permanent establishments, and 8.1

Foreign direct investment

administration of incentives 20.5

attracting foreign direct investment

introduction 20.2

investment allowances and credits 20.4

purpose 20.6

reduced corporate tax rates 20.3

tax holidays 20.3

classification of countries 20.1

effect of 2008 financial crisis 20.8

home country dilution of incentives 20.7

introduction 20.1

investment allowances and credits 20.4

reduced corporate tax rates 20.3

summary 20.10

tax competition 20.9

tax holidays 20.3

tax incentives

administration 20.5

home country dilution 20.7

introduction 20.2

investment allowances and credits 20.4

purpose 20.6

reduced corporate tax rates 20.3

tax holidays 20.3

UNCTAD 20.1

Foreign exchange exposure

multinational groups of companies, and 10.20

Foreign expansion

branch, via

generally 10.2

inward investment into UK 10.6

outward investment by UK company 10.10

conversion of branch into subsidiary

generally 10.4

inward investment into UK 10.8

outward investment by UK company 10.12

corporate inversions 10.5

introduction 10.1

inward investment into UK

branch, via 10.6

conversion of branch into subsidiary 10.8

UK subsidiary, via 10.7

outward investment by UK company

branch, via 10.10

conversion of branch into foreign subsidiary 10.12

foreign subsidiary, via 10.11

introduction 10.9

reporting international movements of capital 10.13

subsidiary, via

generally 10.3

inward investment into UK 10.7

outward investment by UK company 10.11

summary 10.37

tax sparing 10.14

Foreign legal entities

generally 2.11

Formulary apportionment

transfer pricing, and 15.53

Fundamental freedoms

corporation tax, and 18.2

G

General anti-avoidance rule (GAAR)

treaty shopping, and 16.5

General Agreement on Tariffs and Trade (GATT)

customs and excise duties, and 19.43

Government service

double tax treaties, and 7.35

Groups of companies

(see and see Multinational groups)

permanent establishments, and

commissionaire arrangements 8.12

generally 8.11

H

High inflation countries

multinational groups of companies, and 10.24

Home state taxation

administrative issues 18.35

apportionment issue 18.29

constitutional issues 18.30

discrimination, and 18.34

double tax treaties, and 18.33

enforcement 18.31

example 18.37

generally 18.28

'group' 18.32

practical issues 18.35

Hybrid financial instruments

generally 10.26

OECD guidance on treatment 10.27

I

Immovable property, income from

double tax treaties, and 7.22

Income tax

corporations 1.13

personal 1.11

Independent personal services

double tax treaties, and 7.29

Interest

corporation tax, and 18.8

double tax treaties, and 7.26

multinational groups of companies, and

generally 10.15

maximising value of deduction 10.21–10.23

offset restrictions 10.23

special regimes 10.22

tax incentives 10.22

tax rates 10.21

variations in treatment 10.16

withholding tax 10.17

Interest and Royalties Directive

corporation tax, and 18.8

International taxation

administration 2.7

cross-border enforcement of taxes 2.9

essential concepts

federal taxes 2.4

generally 2.3

international tax principles 2.5

introduction 2.1

jurisdiction to tax 2.2

private international law, and 2.10

public international law, and 2.2

recognition of foreign legal entities 2.11

summary 2.12

supra-national organisations, and 2.8

tax planning 2.6

tax principles 2.5

International transport

double tax treaties, and 7.23

Investment abroad

branch, via

generally 10.2

inward investment into UK 10.6

outward investment by UK company 10.10

conversion of branch into subsidiary

generally 10.4

inward investment into UK 10.8

outward investment by UK company 10.12

corporate inversions 10.5

introduction 10.1

inward investment into UK

branch, via 10.6

conversion of branch into subsidiary 10.8

UK subsidiary, via 10.7

outward investment by UK company

branch, via 10.10

conversion of branch into foreign subsidiary 10.12

foreign subsidiary, via 10.11

introduction 10.9

reporting international movements of capital 10.13

subsidiary, via

generally 10.3

inward investment into UK 10.7

outward investment by UK company 10.11

summary 10.37

tax sparing 10.14

Inward investment into UK

branch, via 10.6

conversion of branch into subsidiary 10.8

introduction 10.1

UK subsidiary, via 10.7

J

Jurisdiction

concepts of international tax, and 2.2

double tax, and 5.2

l

Limitation of benefits clauses

'active business' test 16.23

'derivative benefits' test 16.22

double tax treaties, and 7.46

generally 16.16

introduction 16.2

'multinational corporate group headquarters' test 16.24

not-for-profit organisations 16.20

'ownership/base erosion' test 16.21

pension funds 16.20

'publicly traded' test 16.19

'qualifying persons' approach 16.17

US-style structure 16.18

Loan interest

multinational groups of companies, and 10.15

Lower level of taxation

application of test 13.9

meaning 13.6

M

Merger Directive

corporation tax, and 18.5–18.6

Missing trader intra-community (MTIC) fraud

approaches to tackling 19.26

carousel fraud involving non-EU country 19.25

generally 19.23

simple acquisition fraud 19.24

Most favoured nation clauses

double tax treaties, and 7.47

Motive test

controlled foreign companies, and 13.16

MTIC fraud

approaches to tackling 19.26

carousel fraud involving non-EU country 19.25

generally 19.23

simple acquisition fraud 19.24

Multilateral treaties

double tax treaties, and 7.53

Multinational groups of companies

cross border tax arbitrage

double dipping 10.28–10.30

dual resident company losses 10.33

'entity classification' 10.31

hybrid financial instruments 10.26–10.27

interest deduction restrictions 10.35–10.36

introduction 10.25

repos 10.34

dividends 10.15

double dipping

creditable foreign tax payment 10.29

deductible interest payment 10.29

generally 10.28

lease payments 10.30

dual resident company losses 10.33

'entity classification' 10.31

financing investment

cross border tax arbitrage 10.25–10.34

high inflation countries 10.24

interest 10.21–10.23

introduction 10.15–10.16

treasury management 10.18–10.20

withholding tax 10.17

foreign exchange exposure 10.20

high inflation countries 10.24

hybrid financial instruments

generally 10.26

OECD guidance on treatment 10.27

interest

generally 10.15

maximising value of deduction 10.21–10.23

offset restrictions 10.23

special regimes 10.22

tax incentives 10.22

tax rates 10.21

variations in treatment 10.16

withholding tax 10.17

interest deduction restrictions

generally 10.35

reference to global tax liabilities, by 10.36

introduction 10.15

loan interest 10.15

repos 10.34

tax planning, and 2.6

treasury management 10.18–10.20

withholding tax 10.17

Mutual agreement procedure

double tax treaties, and 7.43

N

National insurance contributions

employees working abroad, and

individuals coming to UK to work 11.26

UK residents going abroad to work 11.25

Net margin method

transfer pricing, and 15.18

Non-discrimination

double tax treaties, and 7.42

O

OECD Guidelines

(see and see Transfer pricing)

generally 15.6

recommendations 15.7

OECD Model Tax Convention

artistes and entertainers 7.33

associated enterprises 7.24

background 7.13

capital 7.38

capital gains 7.28

collection of taxes 7.45

cross-border services

construction permanent establishments 9.8

deemed services permanent establishments 9.11–9.12

generally 9.7

insurance services 9.9

interaction of articles in other treaties 9.14

introduction 9.1

definitions 7.19

developing countries 7.40

directors' fees 7.32

dividends 7.25

double tax relief

developing countries, and 7.40

generally 7.39

'saving clause' 7.41

tax sparing 7.40

US treaties 7.41

employee stock options 7.31

employees working abroad, and 11.3

employment income

generally 7.30

stock options 7.31

entertainers 7.33

exchange of information 7.44

generally 2.3

government service 7.35

income from immovable property 7.22

independent personal services 7.29

interest 7.26

international transport 7.23

introduction 7.16

limitation of benefits, and 16.3

mutual agreement procedure 7.43

non-discrimination 7.42

other income 7.37

pensions 7.34

permanent establishment 7.21

persons covered 7.17

resident

generally 7.20

individuals 3.1

royalties 7.27

'saving clause' 7.41

sportspersons 7.33

stock options 7.31

students 7.36

tax sparing 7.40

taxes covered 7.18

Treaty shopping, and 16.3

US treaties 7.41

Offshore banking centres

(see and see Tax havens)

generally 12.12

Outward investment by UK company

branch, via 10.10

conversion of branch into foreign subsidiary 10.12

foreign subsidiary, via 10.11

generally 10.9

introduction 10.1

P

Parent/Subsidiary Directive

corporation tax, and 18.7

Penalties

transfer pricing, and 15.46

Pensions

double tax treaties, and 7.34

Percentage turnover method

transfer pricing, and 15.5

Permanent establishments

activities which are 'preparatory or auxiliary' 8.7

agents, and

case law 8.9

generally 8.8

problem areas 8.10

attribution of profits

authorised OECD approach 8.15–8.22

generally 8.14

UN Model Convention 8.27

authorised OECD approach

allocation of profits 8.17–8.22

deductions for interest, 8.19

dependent agent PEs, 8.22

functional and factual analysis 8.16

generally 8.15

increase of profits by PE state 8.21

recognition of transactions between head office and PE 8.20

auxiliary activities 8.7

commissionaire arrangements 8.12

computer servers, and 8.1

concept 8.2

current views 8.31

degree of permanence 8.5

dependent agents, and

authorised OECD approach, 8.22

UN Model Convention 8.26

domestic laws, under 8.29

e-commerce, and

automated machines 17.3

generally 17.2

TAG reform proposals 17.5

UK position 17.4

exposure to tax in state where located

authorised OECD approach 8.15–8.22

generally 8.14

'fixed place of business'

degree of permanence 8.5

'from which the business of the enterprise is wholly or partly carried on' 8.4

generally 8.3

UN Model Convention, and 8.25

'force of attraction' principle 8.27

foreign branches, and 8.1

group companies

commissionaire arrangements 8.12

generally 8.11

India, and 8.30

introduction 8.1

OECD Model Tax Convention, and 7.21

preparatory activities 8.7

'services' permanent establishment 8.6

summary 8.32

UK domestic law 8.13

UN Model Convention, and

attribution of profits 8.27

deduction of expenses 8.28

definition of PE 8.24–8.28

dependent agent 8.26

'fixed place of business' 8.25

'force of attraction' principle 8.27

introduction 8.23

use of agents 8.8–8.10

Personal income tax

generally 1.11

Personal services

double tax treaties, and 7.29

Pharmaceutical industry

transfer pricing, and

introduction 15.30

marketing expenses 15.32

research and development 15.31

Place of effective management

domestic law in other countries 4.15

generally 4.14

introduction 4.2

Preparatory activities

permanent establishments, and 8.7

Private international law

generally, and 2.10

Profits split method

transfer pricing, and 15.19

Protected cell companies

generally 13.21

Public international law

generally, and 2.2

R

Rate of return method

transfer pricing, and 15.21

Recognition of foreign legal entities

generally 2.11

Record keeping

transfer pricing, and 15.50

Repos

cross border tax arbitrage, and 10.34

Resale price minus method

transfer pricing, and 15.15

Residence

companies, of

(see and see below)

generally 4.1–4.17

controlled foreign companies, and

introduction 13.1

old rules, under 13.7

double tax, and 5.2

double tax treaties, and 7.20

generally 2.3

individuals, of

(see and see below)

generally 3.1–3.28