INTERNATIONAL TAX SEMINAR INTRODUCTION 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. COURSE OUTLINE 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 negotiation. EVALUATION 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 email@example.com.
Pages to are hidden for
"INTERNATIONAL TAX SEMINAR"Please download to view full document