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Diamond Graduate School of Law LL.M. Program Syllabus
for Tax
Treaties Fall
Semester only – 16 weeks and an exam week October
1st week until last week January I. COURSE
DESCRIPTION
Tax
Treaties provides an in-depth study of the bi-lateral and multi-lateral treaties
that are the cornerstone of global tax planning, the avoidance of international
double juridical taxation, and the relationship between the tax authorities of
jurisdictions. The course addresses
the system of treaties as a tool of tax avoidance for tax planners and as a tool
for tax compliance, enforcement, and information collection by revenue
authorities. The OECD, UN and US model tax treaties are primarily used as the
teaching tools due to their overwhelming effect on international treaty policy,
however numerous specific treaties are studied from both a case law and case
study perspective. Topics include: interpretation and definitions of articles
and terms; effective application; taxation of investment income (i.e. interest,
dividends, and capital gains); taxation of license fees and royalties; treaty
shopping; limitation of benefits; and indepth approach to the permanent
establishment; taxation of the income of natural persons (i.e. personal
services, pensions); allocation of income between related parties;
non-discrimination toward foreigners; the 1992 United States-Netherlands treaty
as an anti-avoidance model; and new treaty developments, such as the recently
negotiated 2002 US-UK tax treaty eliminating dividend withholding tax in certain
situations between cross border repatriation. This course has been prepared and is taught by a combination of faculty, starting the initial six weeks with Michael Edwardes-Ker, the renown author of The Tax Treaty Service and The Tax Treaty Interpretation Service; Professor William Byrnes; John Avery Jones, Professor Emeritus Klaus Vogel (Munich), Professor Maarten Ellis (Rotterdam); David Ward and Professor Claudia Gramaccia (American University of Rome). The final examination has included writing a client memo based on fact questions, multiple choice with explanations, and short answers questions. The first six weeks of the course each contain multiple choice tests this course uses common law case examination, complex case studies, personal and group assignments to assess the students. Generally this course is taken concurrently with Principles of International Taxation. II. PURPOSE An LLM executive level course. This course will be taught at the executive level and will employ case studies as well as global case analysis. Generally, this course is taken concurrently with Principles of International Taxation.
1. familiarize you with the construction of tax treaties 2. present the model tax treaties that control the parameters of modern treaty negotiation 3. introduce you to the definitions and law in relation to the model treaty articles 5. develop analytical planning skills using tax treaty 6. explain the methodology of treaty interpretation 7. present the general legal principles applicable to all treaties 8. present the parameters that guide the taxation of persons, income, and objects pursuant to treaties 9. present various treaty tax planning tools
10. comparison of numerous OECD and other important jurisdictions Dear Student, The first time that I sat in a tax treaties course, I discovered that my previous law studies had not prepared me to decipher the variety of issues concerning a tax treaty, such as application and planning. I did not even know what a treaty really was, meaning - how a treaty is formed, by whom is it formed, what rights and obligations flow and are demanded pursuant to a treaty in general, what are the enforcement procedures and who has standing to enforce a treaty. In fact, with a US education, I had a very myopic view of what constituted international law. Through years of teaching in many different regions, I realize that for 80% of the persons in the room – they are just like me that first day of treaties class in 1992 – confounded, but feeling as a tax practitioner, they should know something about this area. Treaties is generally taken in conjunction with Principles of International Tax (PIT) because PIT is a softer, gentler course whereas Treaties throws you immediately into realms of case law and jurisprudential thought from around the globe. The two courses together produce an educational balance. If you feel lost at first – well, most do. It is around week eight that most see the light. III.
COURSE PROCEDURE
This course will involve fourteen weekly modules that are delivered
through on-line instruction pursuant to current program specifications.
Each module will contain text material, study guide instruction, and
weekly interactive participation. Text
material may contain a combination of code sections, cases, and commentary
materials. Study guides will
contain commentary materials upon the text materials with imbedded exercises and
assignments to be completed either independently or within a group of two to
five persons. Assignments may be
submitted directly to the Instructor or submitted to the classroom.
Each module, selected students may be called upon to deliver answers in the
Internet based classroom to questions posed by the instructor.
Questions may be posed in case study form or in issue form.
Answers may be short (one page) form or long form (five page analysis).
During the semester, module based audio and videotape lecture construction will
be explored as well as the provision to students through streaming technology.
During the semester, each student will receive at least two detailed
feedback sessions from the Instructor through the detailed marking of
his/her/group study guide assignments and/or class participation.
Separately, the Instructor is available for office hour private
counseling through email, telephone, and perhaps by residential office
appointment.
Other assignments may receive feedback and will receive a grade, recorded in the
online grade book that students may assess their performance. IV. ATTENDANCE AND
PARTICIPATION
This
online course requires attendance which is measured by (1) the modular-weekly
interactive participation opportunities in the classroom, (2) mandatory weekly
participation through being called upon to address the class for certain modules
as well as (3) modular study guide assignments.
Missing mandatory weekly participation assignments is the equivalent of
being not prepared in class and will result in a zero for that assignment.
Not turning in study guide assignments will result in a zero for that
assignment.
Grades will be determined through a combination of factors, as follows: final exam – 50%; weekly
study guide assignments – 25% weekly
participation – 25% VI. REQUIRED TEXTS
Electronic
texts edited and authored by the Instructor, supplemented by reference
materials. Reference materials will
include source materials and secondary materials. VII.
REFERENCE MATERIAL
Research is conducted using the Internet WWW as well as, and most importantly, value added databases, such as
Also, the student should use the electronic book libraries and research the titles available. Finally, the student is encouraged to use online legal research resources or university library or another library through a University library exchange program. VIII.
WEEKLY SYLLABUS MODULE
1 :
What is a (tax) treaty? Module 1 covers the distinction and relationship between public and private international law, the incorporation of treaties into domestic law, tax treaty overrides, Arts. 27 (Diplomatic Agents), 29 (Entry into Force) and 30 (Termination) and the impact of the foregoing on tax treaty interpretation.
MODULE
2 :
Module 2 describes the three main bases for taxation (source/situs, residence and citizenship), explains the need to avoid double/multiple taxation, and outlines the purposes of tax treaties (with brief references to Arts. 24 and 26). It then describes how tax treaties avoid double taxation (by allocating he right to tax and requiring exemption/ credit to be given); covers Arts. 22 (Capital) and 23 (Exemption/Credit Methods), and illustrates when a tax treaty might fail to avoid double taxation, might create double non-taxation, and/or might impose tax.
MODULE
3 :
Comparison of Model Tax Conventions. Module 3 covers the provenance of OECD, US and UN Income tax Models, outlining their differences and different tax allocations. It also covers OECD Estate And Gift Tax Models.
MODULE
4 :
The role of The Vienna Convention and Model Commentaries in tax treaty interpretation.
MODULE
5 : The scope of tax treaties. Module 5 covers Arts. 1 (Personal Scope), 2 (Taxes Covered), 3 (General Definitions), 28 (Territorial Extension), Who can rely on a treaty for protection? Residents of third States (with brief references to Arts. 10, 11, 24 and 26), the US saving clause, tax treaty problems of trusts, partnerships, etc. and Art. 3(2)'s reference to domestic law.
MODULE
6 :
Art. 4 (Resident) plus Art. 8 (Shipping etc.).
MODULE
7 :
Art. 5 (P.E.), Art. 7 (Business Profits) and Art. 14 (Independent Personal Services).
MODULE
8:
Art. 10 (Dividends), including branch tax and EC Parent-Sub Directive.
MODULE
9 :
Art. 11 (Interest) including tax sparing, proposed EC rules and triangular cases.
MODULE
10 :
Arts. 12 (Royalties) and 13 (Capital gains) including proposed EC rules.
MODULE
11:
Art. 15 (Dependent Personal Services), Art. 16 (Directors' fees), Art. 18 (Pensions) and Art. 20 (Students).
MODULE
12 :
Art. 6 (Immovable Property), Art. 17 (Artistes and Athletes), Art. 19 (Government Service) and Art. 21 (Other Income).
MODULE
13:
Treaty Abuse and Limitation on Benefits.
MODULE
14:
Art.
24 (Non-discrimination) including EC law.
Module:
15 Art. 9 (Associated Enterprises), Art. 25 (Competent Authority) and Art. 26 (Exchange of information).
Module:
16 Back to the future? A wrap-up the Modules highlighting points which need further analysis, illustrating the importance of the first Models, giving example(s) of treaty research and forecasting likely developments. |