The University Act provides for a total of 90 ECTS for the LL.M. program. The program is divided into eight blocks of lectures and comprises the following subjects:
Tax treaty law
Taxpayers operate internationally and globally to an ever-increasing extent. Therefore, dual (or multiple) residence in more than one tax jurisdiction is an obvious issue of international tax law. This course analyzes the concept of residence in domestic and treaty tax law, including the tie-breaker mechanisms applied in dual residence situations. Specifically, the course discusses suitable options for establishing companies that are resident for tax purposes in more than one country and their applicability within the framework of international tax planning. The law on double taxation agreements plays a pivotal role in this matter. Interesting aspects to be considered in the overall design result from the interplay between tax treaties and national law. Questions arising due to the establishment of dual resident companies for tax purposes, particularly related to possible triangular cases regarding tax treaties, are discussed by looking at practical case studies.
Exchange of Information
In a globalized tax world, the national means of the tax authorities are limited and are not sufficient to realize the tax claims. An increasing number of legal sources exist to overcome the gap between the worldwide taxation and the limited territorial power of the national tax authorities: e.g. the EU Council Directives concerning mutual assistance in the field of direct taxation and for the recovery of claims, the EU Council Regulation on administrative cooperation in the field of VAT, Articles 26 and 27 OECD Model Convention as patterns for bilateral agreements of information exchange and mutual assistance in tax collection, the OECD Model 2002 for a specific bilateral Tax Information Exchange Agreement (TIEA) which has recently been used for agreements with tax haven countries, the Convention of the Council of Europe/OECD on mutual administrative assistance in tax matters of January 25, 1988, and unilateral legal sources. The OECD and EU are forcing the Automatic Exchange of Information (AEOI) Approach to deal with financial accounts, similar to what the US is implementing, in a network of Foreign Account Tax Compliance (FATCA) Agreements. The course aims to provide a systematic understanding of the content, scope, and relationship of these legal sources. Furthermore, the course will show the tension between the need for an efficient exchange of information, on the one hand, and the need of legal protection of the taxpayer against violation of his commercial or professional secrets, on the other.
Income from Employment – Concepts and Practical Implications
Articles 15 – 19 OECD Model Convention constitute the fundamental distributive rules for income from employment. The course will focus on the tax treatment of cross-border workers, on civil servants and on the taxation of pensions. It will analyze the different provisions contained in the OECD MC and in the UN MC as well as the alternative provisions common in treaty practice. A special emphasis is put on the jurisprudence of the major tax jurisdiction. In the course, the students will solve several case studies and will be advised on tax planning opportunities.
Non-Discrimination – Concepts and Practical Implications
Article 24 OECD Model Convention is a fundamental provision in every tax treaty. It contains several criteria which may not be taken as a basis for discrimination. A contracting state may not discriminate against foreign nationals, against permanent establishments of non-resident taxpayers, against payments made to non-resident enterprises, or against resident enterprises which are controlled by foreign enterprises. This course analyzes the concepts and implications of each non-discrimination clause, the interdependences of the non-discrimination clauses among themselves, and the interactions with distributive rules. While the focus of the course is on the jurisprudence in the OECD Member countries, it will also discuss whether the scope of Article 24 should be extended de lege ferenda.
OECD Developments in International Tax Policy
OECD has been playing a leading role in International Tax Policy standard setting since 1960ies when the OECD Model Convention was developed and gradually other international tax standards evolved also in other areas – such as OECD Transfer Pricing Standards and standards for exchange of information. With the creation of BEPS Inclusive Framework, the OECD has embarked on a new journey, which involves also non-OECD economies in the formulation of International Standards included in the different recommendations included in the BEPS Action plan. This lecture will provide overview of the historic evolution of the different international tax standards as well as their current status and the related ongoing international tax policy developments. Students will gain insights into the underlying tax policy issues but also dynamics and processes of the international tax standard setting.
Principles of Tax Treaty Law
The treaty models of the OECD serve as the basis for most existing tax treaties worldwide. Taking them as a starting point, the lecture aims to provide the necessary understanding for a systematic approach to the legal field of tax treaties in general. It discusses basic issues such as the scope of tax treaties, their distributive rules and the methods available to eliminate double taxation, as well as other important treaty rules, including the prohibition of discrimination, the mutual agreement procedure, and the exchange of information. On the one hand, the lecture is intended to create a basis for various, more specific lectures, and, on the other, to develop an understanding of the interrelations between individual treaty rules that are also dealt with in other lectures.
South American Tax Treaty Policy
The course provides a short introduction to doing business in general in South America, touching on the Agreements for the Protection of Foreign Investment and the Free trade initiatives in the Americas, including tax provisions in such agreements. The trend towards tax treaties in the region is analyzed, including parts of the Andean Pact and the OECD and UN Model as applied by South American countries. Some specific differences and special issues in tax treaties in the region are presented and discussed.
Special Features of the UN Model Convention and UN Tax Guidance - Issues for Developing Countries and Businesses Active in Developing Countries
The United Nations Model Double Taxation Convention between Developed and Developing Countries is widely used in the negotiation and administration of tax treaties by developing (and some developed) countries among the United Nations’ 193 nation membership. The Model’s differences from the OECD Model Convention are something that all those dealing with developing countries, or coming from such countries, should be aware of. The general reservation in the UN Model of more taxing rights to the country where economic activity occurs and less to the country of residence of the company earning returns from those activities is particularly relevant in current debates about where value is created and how the profits it creates should be taxed. This lecture will also outline current work related to the UN Model in the areas of transfer pricing, taxation of the extractive industries, and the taxation of technical services, including the new fees for technical services article due for incorporation in the 2016 update of the Model. The policy and administration issues addressed in such an article will be examined as to their immediate and broader significance.
Tax Treaties – Case Studies and Specific Interpretation Issues
Tax treaties are very important tools in international tax planning. Parallel to the increase of cross-border transactions, more and more questions about the interpretation of specific tax treaty provisions are being raised. When attending this course, students will already have dealt with principles of tax treaty law and with many more issues of international tax law. With that knowledge in mind, they will deal with even more sophisticated issues of international tax law that play an important role in international tax planning.
Tax Treaty Developments: Source versus Residence Principle
Current tax treaty practice has been based on the residence principle for a long period. This practice is rooted in reports of the League of Nations published in the 1920s. A question that can be raised is whether the concepts of the 1920s are still valid nowadays. The course aims at a better understanding of flaws in double tax conventions because of the application of the principle of residence, and of opportunities which the application of the principle of source or the principle of origin offers to mitigate such flaws. The principle of residence offers opportunities for tax planning without really affecting the way income is produced. It may even cause tax treaty abuse. These phenomena trigger reactions by contracting states in order to protect source state tax jurisdiction under double tax conventions. Developments in these fields will be discussed not only from the perspective of legal and economic principles, but they will also be illustrated with practical examples of tax planning and counter-reactions in order to better understand the functioning and the non-functioning of current double tax conventions. Furthermore, developments of EU law affecting double tax conventions will also be discussed. One development is that EU law reduces the dominant position of the principle of residence in favor of the source principle. Finally, alternative tax treaty systems based on the principle of source or origin will also be discussed.
Tax Treaty Interpretation
Tax treaties are international treaties which must be interpreted according to international rules, as laid down in the Vienna Convention on the Law of Treaties. Furthermore, tax treaties, which are drawn up in line with the OECD Model Double Taxation Convention, contain separate interpretation guidelines in Article 3 paragraph 2 of the Model Convention. Both the content of the Vienna Convention on the Law of Treaties and the special interpretation rules of Article 3 paragraph 2 of the OECD Model Double Taxation Convention leave some room for interpretation. The course covers these problems, as well as the importance and implications of the OECD Commentary on the interpretation of bilateral tax treaties.
Tax Treaty Negotiation
This course will allow students to examine the main policy and technical issues involved in the negotiation of tax treaties. It will first explore the main elements that determine a country's tax treaty policies, including the relevant features of its domestic tax system and economic factors. It will then focus on the identification of the main issues involved during the negotiation of each article of a typical tax treaty. The course will also examine the various steps for the conclusion of a tax treaty and the process of negotiation, taking into account the role of model conventions and previously concluded treaties.
Taxation of Artistes and Athletes
The OECD Model Tax Convention devotes a separate Article 17 to income derived from the activities of entertainers and sportspersons. Article 17 assigns the primary taxing right in relation to income derived by artistes and athletes to the state of performance, regardless of whether the income is of a business or employment nature. The purpose of this lecture is to discuss the tax treatment of artistic and sports performances under Article 17. In particular, the lecture will explain the reason behind the introduction of this exceptional rule, the scope of income that falls within this provision, income attribution rules, the allocation of taxing rights in relation to income from artistic and sporting activities as well as its anti-avoidance purpose. Examples and case studies will offer an insight into advanced problems arising in connection with the application of double tax treaties to internationally performing artistes and athletes.
The Effects of the MLI on Tax Treaties
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) is a new phenomenon in international taxation which has been developed to swiftly change, by way of a single instrument, the existing tax treaties in order to include in them measures recommended by the BEPS project aimed at preventing tax treaty abuse. The MLI has been described in every ways from a game-changer in international taxation that “makes tax treaty history” to a conservative instrument which preserves the inherent bilateral nature of tax treaties. The lecture examines the actual effect that the MLI has on tax treaties focusing on its flexible nature which offers many possibilities to the parties for reservations, opt-ins and alternatives making it fit for various bilateral relations. We will also discuss the mechanism through which the MLI modifies existing tax treaties, all with the aim of understanding how the MLI changes the application of tax treaties as we currently know it.
The Relevance of OECD Documents for the Interpretation of Bilateral Tax Treaties
Since its foundation in 1948/1961 and the publication of its first Model Double Taxation Convention in 1963, the OEEC/OECD has gained undisputed leadership, authority, and expertise in the field of tax treaties. The course reflects on the early days of OECD and tries to mark the decisive steps in the evolution of what has now become a highly sophisticated network of rules and reports, customs, and institutions on international taxation. The idea is that understanding the historical background of a rule and of its travaux préparatoires (cf. Article 32 of the Vienna Convention on the Law of Treaties) is a valuable means of interpretation – both on the level of the OECD Model and its regular Updates, its official Commentary, the OECD Reports and the 2017 Multilateral Instrument (MLI). Likewise, such understanding is also helpful for any future reformatting of tax treaty law in Europe and worldwide. Through role-playing and the in-depth analysis of archive material, participants will learn to utilize OECD archive material, assess its historic relevance, and connect it to up-to-date issues of bilateral and multilateral tax treaty law.
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