International Taxation of Income from Services under Double Taxation Conventions: Development, Practice and Policy

International Taxation of Income from Services under Double Taxation Conventions: Development, Practice and Policy provides an overview of the taxation of income from services under double taxation conventions (DTCs) in major jurisdictions across the world. Especially due to the precipitous growth of the digital economy and thus the increased internationalization of services provisions, the international taxation of services has become a dominant focus in international taxation. This multiple-award-winning book is a major contribution to the debate about tax reform. It responds to the need for a comprehensive overview of the tax opportunities and risks relating to the provision of international services.

With a thorough analysis of the international taxation of income from services over the past two centuries, the author sheds new light on present tax policy debates and develops workable proposals for bringing brick-and-mortar DTCs into the digital reality.

What’s in this book:

With an abundance of case studies, treaty interpretations, appraisals of policy discussions, and practical solutions, the author examines every aspect of the subject, including the following:

the Model DTCs of the OECD, the United Nations, Germany, and the United States, their similarities and differences;
relationships among the multilateral instrument (MLI), the Model DTCs, and specific DTCs;
development of the provisions dealing with services in the DTCs;
how tax authorities and courts of different countries (e.g., the United States, Germany, Brazil, India, and China) apply DTC provisions on the taxation of international services;
opportunities and risks relating to different business practices, such as the subcontracting of services provisions, the hiring-out of labor, the secondment of employees, and the engagement of contract and toll manufacturers;
practical questions about the taxation of different distribution models – from fully fledged distributors to commissionaires;
challenges and proposals relating to the differentiation between various types of services under DTCs;
the permanent establishment concept;
to what extent the structure, purposes, and scope of DTCs differ from those of the General Agreement on Trade in Services (GATS);
how changes in the US Model DTC of 2016 affect international service provisions; and
proposed changes to amending the OECD and UN Model DTCs.

Viable proposals to simplify DTC provisions dealing with service income and to align them with current challenges such as the digital economy and the increasing volume of remote services are offered, particularly in light of the likely impact of the Base Erosion and Profit Shifting (BEPS) package and its subsequent MLI.