2-Scope税收协定适用范围教学课件

2Scope税收协定适用范围21、静念园林好，人间良可辞。22、步步寻往迹，有处特依依。23、望云惭高鸟，临木愧游鱼。24、结庐在人境，而无车马喧；问君何能尔？心远地自偏。25、人生归有道，衣食固其端。2Scope税收协定适用范围2Scope税收协定适用范围21、静念园林好，人间良可辞。22、步步寻往迹，有处特依依。23、望云惭高鸟，临木愧游鱼。24、结庐在人境，而无车马喧；问君何能尔？心远地自偏。25、人生归有道，衣食固其端。2021/3/232LawofDoubleTaxationConventions中央财经大学张京萍2021/3/233Chap.2Scopeoftheconvention2.1Personscovered2.2Taxescovered2.1PersonscoveredArticle1ThisConventionshallapplytopersonswhoareresidentsofoneorbothoftheContractingStates.Twoconditions：A“person”withinthemeaningofthetreatyThatthispersonisa“resident”atleastofoneofthecontractingstates2023/7/2062.1PersonscoveredTheconventionshouldapplyto:Persons(Art.3(1)OECDModel)IndividualsCompanies(anybodycorporateoranyentitythatistreatedasabodycorporatefortaxpurposes)AnyotherbodyofpersonsResidentsofacontractingstate(Art.4(1)OECDModel)(Subjecttotaxunderdomesticlaw)DomicileResidencePlaceofmanagementAnyothercriteriaofsimilarnature2023/7/2072.1PersonscoveredFulltaxliabilityasaprerequisitefortheapplicationoftheDTCsFulltaxliabilityatleastinonecontractingstateApersoncouldnotbeconsideredasa“residentofacontractingstate”(taxtreatypurposes)PersonsubjecttotaxationonlyonincomefromsourcesSpecialprovisions(Art.24-Art.27OECDModel)arenotrestrictedbyArt.12023/7/2082.1PersonscoveredTheDTCsignedbetweentwostatesisnotapplicableincasesoflimitedtaxliabilityinbothstates.Case1:AnindividualisresidentinSwitzerland.Shereceivesdividendsfromacorporation

incorporatedinFrancewithitsplaceofeffectivemanagementinGermany.BothGermanyandFrancetaxthedividendspaidtotheindividual.However,theFrance-GermanyDTCdoesnotapplysincetheindividualissubjectonlytolimitedtaxliabilityinbothstates.DoubletaxationcanonlybeavoidedbytheapplicationoftheFrance-SwitzerlandDTCandtheGermany-SwitzerlandDTC.(p66)2023/7/2092.1PersonscoveredTreatyentitlementofcorporateentitiesthataresubjecttolimitedtaxliabilityPubliclawcorporations(e.g.PublicInstitutions)YesorNo?Corporateentitiesexemptedfromfulltaxliability.(i.e.exemptorganizations)YesorNo?TreatyentitlementofPartnershipsand/orpartners“persons”?YesFulltaxliability?ItdependsSpecialprovisionforpartnershipsinsomeDTCs2023/7/2010Treatyentitlementofpartnerships

Case2:ApartnershipwithaheadofficeinStatePreceivesdividendsfromacompanyresidentinStateS.thepartnersofthepartnershipareresidentinStateR.StateSandStateRtreatthepartnershipasataxableentitywhileStatePtreatsitastransparent.AccordingtotheopinionsetoutintheOECDPartnershipReport,theP-SDTCisnotapplicablebecausethepartnershipisnotaresidentofStatePsinceStatePtreatsitastransparent.ThepartnersareresidentinStateRbutsinceStateRconsidertheincometobeearnedbythepartnershipandnotthepartners,theR-SDTCcannotapply.Therefore,thetaxinStateSisnotrestrictedsinceneitherDTCapplies.If,however,thecharacterizationinthesourcestatewerefollowed,theP-SDTCcouldapply.Admittedly,thepartnershipisnotresidentinStateP;however,thenecessaryconnectionforpurposesofresidency(headoffice)existsinP.(P75)2023/7/20112.1PersonscoveredDualresidenceThissituationmaybetheresultofdifferentcriteriafortheclassificationasresidentsTaxtreatyrequiresonlyoneresidentstateinorderfortheallocationrulesandmethodarticletoapplyproperlyOnlyoneresidentshouldbedeterminefortaxtreatypurposes2023/7/20122.1PersonscoveredDualresidence–IndividualsTie-breakerrule(Art.4(2)OECDModel)PermanenthomeCentreofvitalinterestHabitualabodeNationalityMutualagreementprocedure2023/7/20132.1Personscovereddualresidence–IndividualsCase3:

AnindividualwithapermanenthomeinGermanyhashishabitualabodeinAustria.ThetaxtreatyconcludedbetweenGermanyandAustriafollowstheOECDModel.Undertheapplicabletaxtreaty,theindividualisdeemedtobetaxresidentinGermany.Consequently,Germanyhastherighttotaxtheindividual’sworldwideincomewhileAustriamayonlytaxincomethatarisesinitsterritory.2023/7/20142.1Personscovereddualresidence–IndividualsCase4:

Anindividual,whoisresidentbothofFinlandandofSwitzerland,receivesdividendsfromsourcesinSwitzerland.PursuanttoArt.10(2)oftheFinland-SwitzerlandDTC，thetaxatsourceisrestrictedto10%.However,theapplicationofArt.10ofthatDTCrequiresthatthecompanypayingthedividendsandthepersonreceivingthedividendsareresidentsofdifferentcontractingstates.Inotherwords,Art.10Finland-SwitzerlandDTCappliesonlyiftheapplicationofthetiebreakerrulesofArt.4(2)oftheFinland-SwitzerlandDTCleadstotherecipientofthedividendsbeingaresidentofFinland.(p77)2023/7/20152.1Personscovereddualresidence–IndividualsCase5:AnindividualhashomesinbothGermanyandCanada.Thepersonearnsincomefromsourcesinbothstates.Theperson’sspouseandchildrenresideprimarilyintheGermanyhomeandtheindividual’ssocialandculturalactivitiesarecenteredinGermany.AccordingtoaCanadajudgment,thepersonisaresidentofGermanyforpurposeoftheCanada-GermanyDTCsincehiscenterofvitalinterestisinGermany.(p79)2023/7/20162.1PersonscoveredDualresidence–CompaniesPlaceofeffectivemanagement(Art.4(3)OECDModel)Case6:

AcompanywithitsseatinSpainiseffectivelymanagedinFrance.Here,thecompanyisdeemedtobearesidentfromFrancefortaxtreatypurposes.Accordingly,Francehastherighttotaxtheworldwideincomeofthecompany,whereasSpainmayonlytaxedincomethatissourcedinSpain.2023/7/20172.1PersonscoveredDualresidence–CompaniesCase7:

AcorporationincorporatedinGreeceandmanagedinRomaniareceivesroyaltiesfromRomania.ThecorporationisconsideredaresidentofbothGreeceandRomaniaundertheapplicabledomesticlaws.UnderArt.25oftheGreece-RomaniaDTC(methodarticle),thestateofresidenceoftherecipientoftheroyaltiesmustgrantadeductionfromtaxonincomewithrespecttotaxpaidintheothercontractingstate.IfArt.25oftheDTCwereappliedonthebasisofthedomesticdefinitionofresidence,GreecewouldbeboundtograntsuchadeductionforthetaxespaidinRomania.However,underArt.4(3)oftheDTC,thecorporationisdeemedtobearesidentofRomaniasinceitsplaceeffectivemanagementisinRomania.SinceGreeceisnotthestateofresidenceofthecorporationundertheDTC,itisnotrequiredtograntadeductionfortaxpaidwithrespecttotheroyaltiesearnedinRomania.

（p78)2023/7/20182.1PersonscoveredSwitzerlandDividendsPlaceofeffectivemanagementCompanySeat–LegalincorporationGermanyFranceCase8:

2023/7/20192.1PersonscoveredBothGermanyandFrancetaxthedividendspaidtotheindividual.However,Germany-Francetaxtreatydoesnotapplysincetheindividualissubjecttolimitedtaxationinbothstates.Doubletaxationcanonlybeavoidedbytheapplicationof:France-SwitzerlandtaxtreatyGermany-Switzerlandtaxtreaty2023/7/20202.1PersonscoveredTheapplicabilityofacertainDTCmightbeinfluencedbyaDTCconcludedbyonecontractingstatewithanotherstatebecauseoftheresidencetiebreakerrules

(Art.4(2)(3)OECDModel

）whicharecontainedinthelaterDTC.Case9:Acompany(“CompanyAB”).isincorporatedunderthelawofStateAandhasitsplaceeffectivemanagementinStateB.CompanyABisaresidentofbothstatesunderdomesticlaw.Thecompanyownsa51%participationinacompanywhichisaresidentofStateC(“CompanyC”).ThereisnoDTCbetweenStateBandStateC,whileOECD-patternedDTCsexistbetweenStateAandStateC,andStateAandStateB.UnderStateC’sdomesticlaw,a30%withholdingtaxappliestooutbounddividends.In2010,dividendsarepaidbyCompanyCtoCompanyAB.StateCdoesnotgrantareductioninwithholdingtaxassetoutintheA-CDTC(5%).AccordingtoStateC,CompanyABcannotclaimthebenefitsoftheA-CDTCsinceitisnotaresidentofStateAunderArt.4(1)oftheA-CDTC.Thiswouldbeduetothefactthat,notwithstandingthatCompanyABisaresidentofStateAunderdomesticlaw,itisnotconsideredtobearesidentofstateAundertheA-BDTC.(P73)However,thisconclusionisquestionablefromalegalstandpoint.2023/7/20212.1PersonscoveredEffectsoftheDTCnon-discriminationrulesCase10:AcompanyresidentinSwitzerlandhasaPEinFrance.InterestfromHungariansourcesisattributabletothisPE.TheFrance-HungaryDTCisinapplicablesincethecompanyisnotaresidenceofeithercontractingstate.However,Art.26(3)oftheFrance-SwitzerlandDTC(non-discrimination)providesthatataxationofaPE,whichanenterprisefromSwitzerlandhasinFrance,shallnotbelessfavorablytreatedinFrancethanthetaxationleviedonenterprisesofFrancecarryingonthesameactivities.Accordingly,intaxingthebusinessprofitsofthePE,FrancemustallowthePEacreditforthetaxpaidtoHungary.

(P72)2023/7/20222.1PersonscoveredTreatyentitlementandtreatyabuseAnti-abuseprovisionsLook-throughapproachExclusionapproachSubject-to-taxChannelApproachBonafideprovisionsTheconceptofbeneficialownershipLimitationofBenefits(LOB)–USModel2023/7/20232.2TaxescoveredArt.2OECDModel2023/7/20242.2TaxescoveredTaxtreatyisapplicablewithrespecttotaxesonincomeoroncapitalimposedonbehalfofacontractingstateoritspoliticalsubdivisionorlocalauthorities.TheConventionshallapplyalsotoanyidenticalorsubstantiallysimilartaxes.DisregardthemannerleviedThearticlesetsoutalistoftaxesinforceatthetimethetreatywasconcludedtowhichtheDTCapplies.AdjustmentclauseSpecialprovisions(Art.24-Art.27OECDModel)arenotrestrictedbyArt.22023/7/2025Glossarycorporatebodytie-breakerrulespermanenthomecenterofvitalinterestshabitualabodeplaceofeffectivemanagementnon-discriminationrulesregardingPElegalentityhybridentitytransparententitycompetentauthoritytheblanketclause2023/7/2026Attached:Article1&4

OECDModelConventionArticle1PersonscoveredThisConventionshallapplytopersonswhoareresidentsofoneorbothoftheContractingStates.Article4Resident1.ForthepurposesofthisConvention,theterm“residentofaContractingState”meansanypersonwho,underthelawsofthatState,isliabletotaxthereinbyreasonofhisdomicile,residence,placeofmanagementoranyothercriterionofasimilarnature,andalsoincludesthatStateandanypoliticalsubdivisionorlocalauthoritythereof.Thisterm,however,doesnotincludeanypersonwhoisliabletotaxinthatStateinrespectonlyofincomefromsourcesinthatStateorcapitalsituatedtherein.2023/7/2027Attached:Article4

Resident2.Wherebyreasonoftheprovisionsofparagraph1anindividualisaresidentofbothContractingStates,thenhisstatusshallbedeterminedasfollows:

a)heshallbedeemedtobearesidentonlyoftheStateinwhichhehasapermanenthomeavailabletohim;ifhehasapermanenthomeavailabletohiminbothStates,heshallbedeemedtobearesidentonlyoftheStatewithwhichhispersonalandeconomicrelationsarecloser(centreofvitalinterests);

b)iftheStateinwhichhehashiscentreofvitalinterestscannotbedetermined,orifhehasnotapermanenthomeavailabletohimineitherState,heshallbedeemedtobearesidentonlyoftheStateinwhichhehasanhabitualabode;c)ifhehasanhabitualabodeinbothStatesorinneitherofthem,heshallbedeemedtobearesidentonlyoftheStateofwhichheisanational;d)ifheisanationalofbothStatesorofneitherofthem,thecompetentauthoritiesoftheContractingStatesshallsettlethequestionbymutualagreement.3.Wherebyreasonoftheprovisionsofparagraph1apersonotherthananindividualisaresidentofbothContractingStates,thenitshallbedeemedtobearesidentonlyoftheStateinwhichitsplaceofeffectivemanagementissituated.2023/7/2028Attached:Article2

Taxescovered1.ThisConventionshallapplytotaxesonincomeandoncapitalimposedonbehalfofaContractingStateorofitspoliticalsubdivisionsorlocalauthorities,irrespectiveofthemannerinwhichtheyarelevied.

2.The