Wildy logo
(020) 7242 5778

Wildy’s Book News

Book News cover photo

Vol 21 No 9 Sept/Oct 2016

Book of the Month

Cover of Goode on Commercial Law

Goode on Commercial Law

Edited by: Ewan McKendrick
Price: £170.00

Pupillage & Student Offers

Special Discounts for Pupils, Newly Called & Students

Read More ...

Secondhand & Out of Print

Browse Secondhand Online


Taxing Cross-Border Services: Current Worldwide Practices and the Need for Change

Image not available lge

ISBN13: 9789087223496
Published: March 2016
Publisher: IBFD Publications BV
Country of Publication: The Netherlands
Format: Hardback
Price: £123.00

Low stock.

The tradability of services cross border has increased vastly since the provisions in the OECD and UN Model Tax Conventions were first developed. This book examines the factors used in these Models to connect an enterprise with the tax jurisdiction of a state for the purposes of allocating the tax base arising from cross-border enterprise services. It questions whether these factors produce an allocation of taxing rights which is acceptable to both multinational enterprises and tax authorities, in terms of satisfying any debt of economic allegiance and limiting base erosion. The connecting factors used, such as permanent establishment and location of the customer, are examined from theoretical and empirical standpoints: if they are considered acceptable, they should be found to be in widespread use, both in the domestic laws of states and in the network of bilateral double tax treaties.

The work commences with a review of the developments in international trade in services since the 1920s. It then moves on to consider the theoretical basis for host state taxation of non-resident service providers. The extent to which the connecting factors adopted in the Models are followed is analysed by means of a review of domestic law in a selection of states and by a comprehensive survey of provisions concerning cross-border services in existing double tax treaties.

The analysis reveals that most treaties do not follow the OECD Model with respect to cross-border enterprise services. Whilst many follow the UN Model in some respects, the provisions adopted lack a sound theoretical basis, and the use of a time threshold for source state taxation is a poor proxy, both for measuring any debt of economic allegiance to the source state and for measuring the degree of base erosion suffered by the source state. These two findings suggest that a fresh approach is needed. A proposal is offered which uses a better proxy for establishing the right of the source state to tax and which strives to produce an equitable division of the tax base. The proposal suggests an administrative mechanism which can be used even by states with poorly developed tax administrations.

Image not available lge