The effect of the distributive articles of a tax treaty, which allocate taxing rights between the contracting states, depends on the specific factual situation under consideration. The impact of these articles may change over time if the material facts change and it is therefore imperative to know at which time the effect of a specific distributive article should be determined. A change in the substance of these articles also makes it necessary to know at which time the treaty should be applied to a specific set of facts. Yet the answer to this question is still far from clear, even though this is a fundamental, systemic issue. This article aims to fill this gap. It draws on the basic principles of tax treaty interpretation expressed in the Commentaries to the Model treaties, OECD reports, case law and academic writing to develop a timing framework for the distributive articles. In doing so, it concludes that the traditional classification of the distributive articles as covering “active” or “passive” income is not useful. It proposes an alternative classification, based on the nexus requirements in the model treaties for source-state taxation, that is relevant well beyond the question discussed here.

While theoretical studies suggest that capital income tax (CIT) has positive effects on economic growth, empirical research yields mixed results. This study aims to bridge the gap in existing literature by investigating the role of net taxes in explaining the impact of CIT on economic growth, focusing on the Central African Economic and Monetary Community (CEMAC) countries. Using a recursive dynamic computable general equilibrium (CGE) model and 2015 social accounting matrices (SAMs), simulations are conducted for the period 2023-2030. The findings reveal that most CEMAC countries experience a positive impact from indirect tax on commodities, but only Chad and Gabon exhibit positive effects from CIT. Notably, these countries have negative net taxes, leading to public deficits, which are offset by increases in CIT. The results highlight the potential for targeted investments in key sectors to leverage the positive impact of net tax on economic growth. Therefore, policymakers should consider granting more subsidies to firms to boost productivity and drive higher economic growth.

This article analyses the necessity to adapt the OECD Model Tax Convention (OECD Model) for remote work. It argues that a legally binding agreement must be reached on two fundamental aspects: tax liability criteria for remote workers’ earnings and conditions determining when an employee’s remote work creates a permanent establishment (PE) for the employer. The article investigates the current regulation of these issues in the OECD Model, identifies problem areas and proposes reforms. In particular, it suggests a reformulation of tax liability determination for income from remote-working employment based on a reconsideration of the “source state” concept. Additionally, the article proposes creating an ad hoc decision tree to provide a clear and efficient method for verifying the potential existence of a PE due to an employee’s remote work.

This article provides a theoretical foundation with potential for direct practical implementation on the use of arbitral powers within international tax dispute resolution for the benefit of arbitrators and competent authorities. First, it introduces the notion of inherent and implied powers as a means to show how the characteristics of panels and interpretation can be used for the purposes of achieving faster the “right” solution to a dispute. Second, it shows how value created by disputes should be measured – through returns on investment of the dispute. The work shows that the measure can be used to compare the possible impact on the creation of value of different decisions of competent authorities in terms of drafting the legal framework of the dispute and arbitrators. Third, it gives an example on how arbitral powers can be used, making a case for the use of bifurcation within the context of international tax dispute resolution showing how further analysis of panel power is useful to enhance the system as is, without further reform. The work therefore raises awareness on how the current system can benefit from a broader discretion of arbitrators in managing international tax disputes especially if competent authorities expressly allow it and shows how such benefits can be measured. The article concludes with a practical example on the use of bifurcation to limit costs of a dispute and consequently enhance value.

Taxes are acknowledged by the United Nations to play a vital role in achieving the Sustainable Development Goals by 2030, and, according to the World Economic Forum, stakeholders’ increasing interest in societal impact and greater demand for transparency are encouraging firms to go beyond simply “playing by the rules”. Moving from this data, the article assesses what role has been played in developing the discourse about tax and sustainability by private entities (standard setters, certification bodies, advocacy groups), soft law authorities, and policy makers, focusing on the EU legislation. On a practical level, the article tackles the topic of how a company should deal with the challenge of implementing tax policies aligned with its sustainability goals, through the analysis of the latest achievements in the matters of tax risk assessment and management, internal control system, and sustainability reporting.

On 20 April 2021, the UN Tax Committee approved the final version of the new article 12B to be incorporated into the 2021 version of the UN Model. In the absence of a permanent establishment or physical presence of the service provider in the source state, article 12B allows a contracting state to tax income from automated digital services (ADS) paid to a resident of the other contracting state on a gross basis at the rate negotiated bilaterally, with an option to the taxpayer to pay tax on a net profit basis. This article analyses the new article from a critical perspective and argues that, first, the new article is unnecessary, as the alleged need for the new article is only the result of the restrictive and incorrect reading of article 12A of the UN Model (2017) made by the Commentaries on the Model. Second, the new article is not only unnecessary but also counterproductive, as it jeopardizes the institutional prestige of the Committee on Fiscal Affairs, extraordinarily and unnecessarily reduces the scope of application of article 12A, exacerbates the already severe problems of conceptual delimitation between fees for technical services and ADS and, therefore, between articles 12A and 12B and, finally, introduces serious asymmetries in the treatment of these two types of services. The article closes with some advice for those states that have negotiated conventions containing article 12A or similar provisions and intend to retain their taxing rights on ADS without the need to renegotiate their conventions.

The author contends that taxation should be a regulatory currency for the free collection, mining and sale of personal data and connected activities (knowledge discovery and data mining business (KDDM), also called consumer-facing business (CFB)) that is similar to a royalty on natural resources and independent of the urgently needed international tax system reform.Taxing the enormous profits accruing to CFB as a regulatory currency would be an example of a public utility measure contributing to regulating the stateless power of digital giants by gaining back sovereignty so that liberal states would be able to protect privacy and their democracies. Earmarked taxes raised by market states on CFB are recommended as a means to achieve this purpose.With the aim of demonstrating her thesis, the author critically examines the OECD discussions about the allocation of taxing rights in the digital economy; explains the KDDM business model underlying the use of social networks and other internet sites, its lack of transparency, and the insufficient consent models to guarantee data protection; and considers the meaning of privacy as a fundamental right and a condition to free speech, the public sphere and democracy, and the constraints that KDDM causes them.

The OECD seeks to align transfer pricing and profit taxation with value creation. This article argues that taking this objective seriously requires profit splitting. This is shown by applying Shapley value theory to the problem of allocating a firm’s profit tax base to the jurisdictions in which the firm is active. The application of cooperative game theory is justified with the argument that interjurisdictional cooperation on legal issues is a necessary condition for firms earning profit abroad. The profit tax base should therefore be allocated to jurisdictions according to standards generally considered as equitable when distributing the gains of cooperation. At least, this should be the primary objective, which finds its limitations only in the consideration of information and efficiency-related costs. This insight provides the basis for arguing for a two-step approach to profit taxation that has similarities to residual profit allocation but is conceptually and practically different.

The digital revolution raises the question as to whether the international tax rules remain fit for purpose in an increasingly changing environment. The relationship between the digital economy and the existing categories of international taxation is usually approached assuming the existence of a conflict. Is that the right approach to address the question? Although the term “digital economy” is widely used, it relates only to the digital space while it suggests the exclusion of the physical one. The author of this article has a different standpoint and proposes to develop a model of taxation of the internet that goes beyond the narrowest scope of the digital economy and better reflects the modern economy where the virtual and physical worlds are closely interdependent and interconnected. The study contributes to develop a concept of internet community by establishing why it is likely to be a new qualitative key indicator in the coming decades both for purpose of defining the “sufficient economic presence” and allocating profits.

This article examines the compatibility of the OECD’s proposed rules on GloBE (pillar II) with EU law, covering both primary law and secondary law. In addition, it discusses the amendments required by the implementation of this initiative within the internal market. In what concerns compatibility with primary law, this article suggests extending some of the measures to domestic scenarios (avoiding potential issues of discrimination or restriction). In what concerns secondary law, it suggests altering some of the provision of the directives. Furthermore, in the author’s view, the European Union would benefit from aligning some of its tax directives to the outcomes of OECD’s GloBE.