Section – A

This section is not country specific and focuses on key issues such as principles of international tax law, residence, double taxation and treaty interpretation, transfer pricing, the work of OECD and international tax avoidance of direct and indirect taxes.

  • A) Basic principles of international tax law

    • Jurisdiction to tax, including limits to tax jurisdiction arising from public international law, and cross-border enforcement of taxes
    • Taxes and tax systems
    • State practice in exercising tax jurisdiction
    • Causes of international double taxation
    • Methods of relief from international double taxation
    • The history of international tax law
    • Tax and international human rights instruments
    • State responsibility in international tax – the development of the concept of harmful tax competition

  • B) Double taxation conventions (DTCs), focusing on the current version of the OECD Model Tax Convention (MTC)

    • Types of DTCs (limited, multilateral etc.) and negotiation of DTCs
    • DTCs and domestic law
        i) Incorporation of DTCs into domestic law
        ii) Treaty override
    • Format and structure of a DTC
        i) OECD MTC and the Commentaries to the OECD MTC – the work of the OECD Committee on Fiscal Affairs
        ii) UN MTC
        iii) Specific states’ models: the US MTC; the Dutch MTC
    • Approach to the application of a DTC: applying a DTC to a concrete scenario
    • Interpretation of DTCs
        i) General approach to interpretation
        ii) Vienna Convention on the Law of Treaties
        iii) Use of external aids for interpretation – the status and use of the OECD Commentaries
        iv) Application of Article 3(2), OECD MTC
        v) Resolving interpretation issues by competent authority proceedings – Article 25(3), OECD MTC
      • Provisions relating to the scope of a DTC: Articles. 1, 2, 29, 30, 31 and 32
          i) Article 1: Persons covered
          ii) Article 2: Taxes covered
          iii) Article 29: Entitlement to benefits
          iv) Articles 30, 31 and 32: Territorial extension, entry into force and termination
        • Key definitional provisions
            i) Meaning of “resident” and resolution of cases of dual residence – Article 4, OECD MTC
            ii) Permanent establishment concept: determining the existence of a permanent establishment – Article 5, OECD MTC
            iii) Base erosion and profit shifting (BEPS) Action 7: Preventing the artificial avoidance of a permanent establishment
        • DTC provisions relating to various types of tax payers and incomes
        • The resolution of disputes under DTCs
            i) Competent authority/mutual agreement procedures – Article 25, OECD MTC
            ii) Alternative means of resolving international tax disputes
            iii) BEPS Action 14: Making dispute resolution mechanisms more effective
            iv) BEPS Action 15: Developing a multilateral instrument to modify bilateral tax treaties
        • The application of DTCs to electronic commerce
            i) The work of the OECD Taxation Advisory Group
            ii) E-commerce and permanent establishments
        • The digital economy
            i) BEPS Action 1: Tax challenges of the digital economy
            ii) VAT/GST issues
            iii) Nexus issues
            iv) Definition of permanent establishments

          C) Transfer pricing and thin capitalisation rules

        • Various approaches to the determination of profits of branches and associated enterprises
            i) Unitary taxation/global formulary apportionment
            ii) Arm’s length approaches
        • State practice with respect to transfer pricing
            i) Consideration of examples of domestic transfer pricing legislation (US, UK, Germany, Australia)
        • Transfer pricing and DTCs – Article 9, OECD MTC 3 D Advanced pricing agreements
        • The OECD Transfer Pricing Guidelines 2017
          • Background to the introduction of the 2017 guidelines
          • Major amendments to the 1995 guidelines
          • Transfer pricing methodologies
          • Special topics: Hard to value intangibles; low value adding intra-group services; cost contribution/sharing agreements; revised safe harbor guidance; documentation
          • Resolution of transfer pricing disputes and advance pricing agreements
          • Attribution of profits to permanent establishments
        • State practice with respect to thin capitalisation
        • Thin capitalisation legislation and DTCs
          • Base erosion and profit shifting (BEPS)
          • Interest Deductions
        • International tax avoidance
        • Tax havens
          • Approaches to the identification of tax havens – black lists, white lists, grey lists – work of the OECD Forum on Harmful Tax Practices
          • Features of the most commonly used tax havens
        • Domestic law approaches to international tax avoidance
          • CFC and other controlled foreign entity legislation – examples from state practice
          • Foreign personal holding company legislation – examples from state practice
          • CFC and equivalent legislation and DTCs
        • Money-laundering legislation and international tax avoidance
          • Application of money-laundering legislation to foreign fiscal offences
        • Co-operation between revenue authorities
          • Exchange of information – Article 26, OECD MTC
          • Tax information exchange agreement
          • Joint investigations of taxpayers
          • Co-operation in the enforcement of tax liabilities/assistance in the collection of taxes – Article 27, OECD MTC
          • Conventions for administrative assistance in tax administration
          • The OECD/Council of Europe Convention
          • Regional arrangements for cooperation in tax administration

        Section – B

        Candidates are expected to be aware of the key features of the tax system of one of the various tax regimes and be able to answer questions on international tax in relation to a secondary jurisdiction without being expected to offer expert advice on that jurisdiction’s tax system.

        Students are expected to have knowledge of the following aspects of the taxation of the chosen tax jurisdiction:

        1. Income Tax
        2. Jurisdiction to tax
        3. Taxation of individuals
        4. Taxation of companies and other entities
        5. Ascertainment of chargeable income and tax liability
        6. Tax planning
        7. Tax administration
        8. Relief from international double taxation
        9. Goods and Services Tax
        10. The charge to tax
        11. Scope of charge: supply; consideration; taxable person; in the course of furtherance
          of business
        12. Value of supply and time of supply
        13. Ascertainment of tax liability
        14. International services and taxation of the digital economy
          1. Business-to-business supplies of imported services under the reverse charge mechanism regime
          1. Business-to-consumer supplies made to non-GST registered persons
        15. Anti-avoidance
        16. Tax planning
        17. Tax administration

        Candidates may opt to sit in exam for paper CTA4 or write a thesis in place of an exam.

        CTA4 – Thesis Option

        Candidates may write a research thesis in place of sitting in examination for CTA4 (after attending advanced research methodology webinar) consisting of 5,000 to 7,500 words on any topic from each section of CAT4 after seeking approval from the Board of Studies.