With the closing of many domestic tax loopholes, the deregulation and meshing of the Australia economy with the world economy, international tax has moved out of the esoteric domain and become part of day to day practice. Fundamental changes were introduced by the Foreign Tax Credit System, the 'controlled' Foreign Corporation measures and the foreign investment fund rules. The Tax Office is in the process of strengthening its complex audit and information gathering capacity to challenge many arrangements. These changes must be linked to existing law and the double tax treaties.
Topics include: Basic criteria for evaluation of international tax regimes; capital flow neutrality; structure of Australian law for taxation of foreign source income and nonresidents. Transnational companies; mechanisms for shifting taxable income. Structure of double tax treaties. Source, Residence and Permanent Establishment Rules (including 'tiebreaker' rules in double tax treaties). Foreign tax credit system. Framework of US Double Tax Treaty and critical evaluation of its policy premises. Problems with US Treaty. Trusts, companies after imputation. Passive income; anti avoidance provisions; jurisdictional limits, enforcement limits, shifting residence or source, information reporting, double dipping schemes, tax haven measures. Evaluation of Tax Office audit strategies, impact of electronic commerce.
This subject may be offered in conjunction with the following: ATAX 0304/0404 International Comparative Tax or ATAX 0309/0409 International Tax: Anti-Avoidance.