International Taxation of Income from Services Under Double Taxation Conventions ― Development, Practice and Policy

The provision of international services has increased enormously, mainly due to the precipitous growth of the digital economy. Accordingly, the interpretation and application of double taxation conventions (DTCs) to income from services has become a dominant focus in the international taxation. This multiple-award-winning book is an indispensable tool for practitioners and 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.

It also offers the rst in-depth analysis of the taxation of income from services vis-à-vis the multilateral instrument (MLI) resulting from the OECD’s Base Erosion and Pro t Shifting (BEPS) initiative.

With the thorough analysis of the international taxation of income from services over the last 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.

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 MLI, the Model DTCs, and speci c 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 labour, the secondment of employees, and the engagement of contract and toll manufacturers;
• – practical questions about the taxation of different distribution models – from fully edged 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 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 ‘BEPS package’ and its subsequent MLI.

This book is poised to become one of the key practice resources for tax lawyers, in-house counsel, and policymakers in the coming years. Interested academics too will bene t from the author’s skill in recognizing the ongoing role of taxation fundamentals in the major revolution currently underway.