INTERNATIONAL TAX SEMINAR


Albert Einstein is known to have admitted that “the hardest thing to understand in the
world is income tax”. Einstein died about fifty years ago, long before globalization led to an
increase in cross-border economic relationships. He would have had a harder time today,
when navigating through the tax consequences of economic arrangements requires an
equal understanding of domestic as well as international income tax.

This seminar explores the interplay of Indian tax treaties with the Indian Income Tax Act,
1961 (“ITA”). We will focus heavily on the theory of taxation in the course of discussions on
basic treaty provisions, international aspects of the ITA, and their applicability to common
economic arrangements. We will also briefly discuss treaty mechanics and the policy issues
to the international division of taxing rights.


The course outline is indicative and subject to change based on how class discussions move.
The objective we will chase is to be able to spot basic issues (at a structural-theoretical as
well as commercial level) in relation to international tax.

   1. Domestic law: What is the extent of India’s tax jurisdiction under domestic law?
       Section 1,4,5,6,9 of the ITA and what they mean for the taxation of residents and
       non-residents; Constitutional limits on unlimited extraterritorial jurisdiction; Nexus

   2. Tax treaties: What happens when domestic jurisdictions overlap? Why do countries
       enter into tax treaties? Which country should get the first right to tax? How do
       countries differ in their approach to tax treaty design? Why are tax treaties
       predominantly bilateral? Constitutional law issues in the Indian context.

   3. Putting treaties in effect: Section 90 of the ITA; International tax as law; Differences
       in approaches to ratification of treaties and what it means for treaty enforcement;
       Interpretation of treaties.

   4. Basic segments of a tax treaty: Residence, Permanent Establishment, Limitation on
       Benefits, Treaty shopping etc.

We can explore the possibility of discussing basic structural differences between the tax
systems of countries (continental, Commonwealth etc.) This is not strictly an international
tax issue but can come in useful in understanding the approaches of countries during treaty


   1. Class Participation: (20) The class will be divided into panels on the basis of role
       number. Each student may expect to be on panel once every two, or three hours (we
       will be able to figure this out once the final lists are in). Panel members may be
       required to discuss issues from assigned readings, comment on relevant treaty / ITA
       provisions, sum up the discussions of a previous seminar session or lead class
       discussion. Panel members may be called upon name wise, seat wise or randomly.
       Your participation grade will be determined on the basis of your performance across
       panels. Depending on class size this should be about 4 panel calls of 5 marks each.

   2. Seminar Paper / Tax Structure: (50) Seminar papers can be written on any
       international tax related topic. I will need to see a 200 word abstract and discuss the
       paper with you before we can finalise on an appropriate subject. Alternatively,
       students have the option of working in pairs to demonstrate a cross-border
      structure which results in double taxation or zero-taxation (as a consequence of
      mismatch of domestic and treaty provisions). We will discuss the details in class.

   3. Response Papers: (25) You will be expected to submit two reflection papers of about
      1500-2000 words each. One (10 marks) will deal with any reading assigned for a
      particular class and will be submitted before that class. The other (15 marks) will
      contain your thoughts on the international tax policy implications of any newspaper
      item reported during the trimester and will be submitted within a week of it being
      reported. These papers should demonstrate your ability to think issues through and
      should not require in-depth research. We may split the class in half and allocate
      deadlines for these papers accordingly.

   4. Attendance: (5)

Course Instructor: Shreya Rao
About me:           I obtained my first law degree from Nalsar and was awarded a
                    masters in law by the Harvard Law School earlier this year. My paper
                    was written under the supervision of Professors Alvin Warren and
                    Brian Arnold, and pertained to the international tax policy issues
                    arising from differences in capital gains source rules. Currently, I
                    work with the international tax practice at Nishith Desai Associates,
                    with whom I have been for about three years now. I am interested in
                    issues relating to the extent of tax jurisdiction and was awarded a
                    scholarship by the International Bar Association-Taxation Section for
                    a paper on the subject of nexus. You may reach me at

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