International and EU Tax Law Master's Course 2024/2025 PDF

# INTERNATIONAL and EU TAX LAW Master's degree in International Accounting and Management Prof. Antonio Marinello (University of Siena) A.Y. 2024/2025 ## General Introduction to the Course ### Objectives of the Course - The course aims to provide the students with an introductory analysis of t...

# INTERNATIONAL and EU TAX LAW Master's degree in International Accounting and Management Prof. Antonio Marinello (University of Siena) A.Y. 2024/2025 ## General Introduction to the Course ### Objectives of the Course - The course aims to provide the students with an introductory analysis of the major issues that a country must confront in designing its “international tax rules” and in coordinating those rules with the tax systems of other countries. ### Background - At one time, international tax issues were important only to a rather small circle of tax specialists, primarily the tax advisers of large multinational corporations and their antagonists in the Tax Departments of some Governments. - As the countries of the world have become increasingly integrated economically, the importance of these issues has grown up. ### Relevance of Int'l Tax for Business - Many small and medium size firms now engage in cross-border transactions that cause them and their tax advisers to face international tax issues rather regularly. ### Relevance of Int'l Tax for Individuals - Moreover, digital tax economy has extended some international tax issues even to individuals (physical persons). ### Relevance of Int'l Tax for Governments - Most national governments and tax authorities must care about international tax, both to present a hospitable environment for foreign investments and to protect their revenue base from risks of erosion, abuse of law, tax fraud. ### Job opportunities arising from International Tax Law - Auditing and Consulting Firms (such as DELOITTE, PWC, ERNST and YOUNG, KPMG), especially in the fields of: - Transfer Pricing; - Consolidated Financial Statements; - Transnational Taxation of items of income (such as Dividends, Interests, Royalties); - Double Taxation and International Tax Planning, both for natural persons and for legal entities. - Multinational Groups of Companies: - Establishing Branches, Subsidiaries, Permanent Establishments abroad; - Allocation of goods and services in single markets, or in the digital market; - Transfer Pricing; - Consolidated Financial Statements; - Transnational Taxation of specific items of income (Dividends, Interests, Royalties); - Double Taxation and International Tax Planning. - International or even National Law Firms (no matter you're not lawyers, they’re often looking for international accountants with a general knowledge of International Tax Law). Same fields as before: - Transfer Pricing; - Consolidated Financial Statements; - Transnational Taxation of items of income (Dividends, Interests, Royalties); - Double Taxation and International Tax Planning. - and, also, Tax residence Issues, both for natural persons and for legal entities - Governments and internal institutions: - National Tax Authorities (such as Internal Revenue Service), working to prevent international tax evasion and international tax fraud. - International Institutions and International Organizations (such as EU Institutions, OECD, UN, International Monetary Fund, World Bank): - Surveys on International or EU taxation; - Studies; - Analyses; - Reform Projects. ### General Organization of the Course - Lectures, supported by slides presentation. - Slides will be uploaded on moodle. - Intermediate self-evaluation is written and consists in open questions and multiple choice questions. - The final exam is written and consists in a test, based on 5 (five) multiple choice questions and 2 (two) open questions. The test has the task to cover all the different contents included in the course, verifying the learning of the students on the different areas. - Office Time: on Wednesdays, from 4 p.m. to 6 p.m. ### Basic bibliography of reference materials (optional): - R. Avi-Yonah, Advanced Introduction to International Tax Law, Elgar, latest edition (in English); - Lang, Pistone, Schuch, Staringer, Introduction to European Tax Law: Direct Taxation, Spiramus Press, latest edition (in English); - P. Pistone, Diritto Tributario Internazionale, Giappichelli, 2021 (in Italian) - P. Pistone, Diritto Tributario Europeo, Giappichelli, 2022 (in Italian); - A. Marinello, Sovranità dello Stato e global minimum tax, Pacini, 2023 (in Italian). - OECD MODEL TAX CONVENTION may be found here: - https://www.oecd.org/ctp/treaties/model-tax-convention-on-income-and-on-capital-condensed-version-20745419.htm - OECD BEPS PROJECT (Base Erosion and Profit Shifting) may be found here: - https://www.oecd.org/ctp/beps-reports.htm ### International Tax Law and National Tax Law - A good knowledge of (at least) one national tax system is recommended to the students, in order to fully understand the contents of this course. - Therefore, students should preferably have attended a Tax Law course, or a Business Tax Law course in their own countries. - Anyway, the first lessons will resume some basic concepts and principles, concerning taxation as a general phenomenon and the general framework of Italian tax system, as an example of a (rather) typical OECD national tax system. ## Lesson n. 1 ### Introduction to Tax Law - General Framework and Basic Concepts ### TAX LAW vs. Economics and Social Sciences - What does TAX LAW deal with? - What does NOT TAX LAW deal with? ### Basic Concepts and Classification of Taxes - The legal concept of TAX - Amount of Money due (paid) to the Government, that is based on your income, property, the cost of goods or services you have bought, etc. - A difference may arise if the amount is paid in order to get a specific benefit from the State, or not (in this second case, the amount is paid only as a consequence of one's wealth, and not to get a specific benefit). Many countries adopt this distinction in their national tax law (Es. Italian Tax Law with the concepts of “tassa” and “imposta”). - Up to now, the legal concept of TAX requires a necessary Link with the concepts of WEALTH and of ABILITY-TO-PAY - What about the next future? Let’s think about: - ENVIRONMENTAL TAXES (GREEN Taxes), such as Plastic taxes, Carbon taxes, etc.; - JUNK FOOD TAXES and SUGAR TAXES, etc.; - *“ETHICAL”* TAXES, levied on specific products (es. weapons, alcohol, tobacco....and maybe in the next future, on robots…) - Any other kind of tax not directly related to an ability-to-pay. Are they Taxes? Are they Penalties? It will be necessary to re-write many national and international legal definitions, starting from Constitutional principles concerning taxation. ### Direct/Indirect Taxes - Direct: Taxes on Income and Property - Wealth is taxed directly at its source, when produced or owned - Indirect: Consumption Tax (VAT) and Transfer Taxes (Registration Fee, Inheritance Tax, Grants Tax, Custom Duties, etc.) - Wealth is taxed indirectly, when consumpted or transferred, due to the fact that, in these situations, one or some persons or entities increase their own wealth - Other specific Taxes may be applied only on certain kinds of income as a *“Discrimination-on-income”*, and are to be considered as Direct taxes (es. Italian IRAP, Regional Tax on Productive Activities; German Gewerbesteuer; the previous French Tax Professionelle, etc.) ### Personal /Non-Personal Taxes - Personal: Es., Personal Income Tax and Corporate Income Tax - Non-Personal: Es., Real Property Taxes and other Taxes on a Real Basis - Corporate Income Tax may have a Personal/Non Personal nature, as it applies to a wide number of subjects, but on a real basis (Companies, Non-commercial bodies, Non-resident bodies, Trusts) ### Proportional/Progressive Taxes - Proportional (fixed, constant) Rate (es. VAT, Registration Fee) - Progressive Tax Rate (Personal Income Tax), with arising tax brackets - An example of Progressive Tax - IRPEF: Italian Tax on Personal Income - The present tax rates are the following: - Up to 28.000 euros - 23% - 28.001 up to 50.000 euros - 35% - More than 50.000 euros - 43% - So, for example, with a Personal Income of 60.000 euros, IRPEF will be: - 23%(28.000), first income bracket = 6.440 euros - 35%(22.000), second income bracket = 7.700 euros - 43%(10.000), third income bracket = 4.300 euros - TOTAL AMOUNT of TAX due will be = (6.440 + 7.700 + 4.300) = 18.440 euros