Limitation on Benefits Clauses in Double Taxation Conventions, Second Edition

EUCOTAX Series on European Taxation Volume 12

Limitation on Benefits Clauses in Double Taxation Conventions analyses the legal framework and application of limitation on benefits clauses (LOB) in double taxation conventions (DTC), including detailed coverage of major recent developments such as the recent tax treaties concluded between the United States (US) and European Union (EU) Member States, the last version of the US Model Tax Convention (2016), the OECD/G20 project on Base Erosion and Profit Shifting, and relevant new rulings handed down by the European Court of Justice. Upfront planning for international structures is crucial to ensure coverage under bilateral tax treaties. However, as treaty shopping – whereby a third-party national or a corporation sets up a shell company in order to minimize or eliminate income tax – can potentially be facilitated by taking advantage of DTC, companies must carefully scrutinize and comply with requirements found in the LOB clauses in tax treaties. This book studies the specific rules laid down in tax treaties against treaty shopping and, in particular, one type of rule, the LOB.

What’s in this book:

Among the subjects and topics covered are the following:

• definition of the concepts of person and residence provided in the OECD model;
• concept of beneficial owner;
• application of domestic anti-avoidance rules;
• adoption of specific provisions to counter the phenomenon of treaty shopping;
• determination of sufficient nexus with the state of residence or a real business purpose; and
• possible consequences of the incompatibility of LOB clauses with EU law.

How this will help you:

This new edition will continue to provide tax attorneys, tax professionals, and government officials with the perspective needed for effective decision-making in this realm of international taxation. This book deals exclusively with a subject matter of real importance to international tax professionals and their clients. Academics and researchers in taxation will also appreciate the in-depth and up-to-date coverage of this important subject.