Naeem Noorbakhsh; Hassan Vakilian; Javid Laknahur
Abstract
Over the past years, "arbitration" as a means of settling international disputes has gained popularity, but compared to international tax disputes, the possibility of applying the arbitration clause is disputed. After the successful use of arbitration to resolve tax disputes in EU arbitration convention, ...
Read More
Over the past years, "arbitration" as a means of settling international disputes has gained popularity, but compared to international tax disputes, the possibility of applying the arbitration clause is disputed. After the successful use of arbitration to resolve tax disputes in EU arbitration convention, The Organization for Economic Cooperation and Development (OECD) in 2008 and the United Nations (UN) in 2011 were convinced to insert an arbitration clause in their model treaties. Skepticism to Arbitrability of international tax disputes due to its link to the sovereignty rights of states, resulted in utilizing such clauses by few countries in their tax treaties. Shortcomings in current methods of dealing with disputes between Contracting states (bilateral agreement procedure) on avoidance of double taxation agreements and lack of a binding mechanism for resolving disputes through direct negotiations between the two countries, has justified the need for an arbitration clause in these treaties. Regarding the nature of possible disputes arising from double taxation treaties, seems there’s no obstacle to use arbitration clause in Iran’s bilateral tax treaties and in order to draft a proper clause, it is recommended to use one of the model clauses of UN or OECD.
Gholam Nabi Feyzi Chekab; Naeem Noorbakhsh
Abstract
Bilateral tax treaties in the world are significantly spreading as a tool for
waiver of double taxation, which is an obstacle in the way of expansion of
international trade. In the text of the such treaties, the concept of "permanent
establishment" is predicted, which means a fixed place for doing ...
Read More
Bilateral tax treaties in the world are significantly spreading as a tool for
waiver of double taxation, which is an obstacle in the way of expansion of
international trade. In the text of the such treaties, the concept of "permanent
establishment" is predicted, which means a fixed place for doing business by the
companies residing in Contracting States in order to clarify tax liability of
entrepreneurs in both countries. Determination of the question of tax residence
has critical importance for recognizing tax liability of a tax payer and in
bilateral tax treaties, having a permanent establishment means residency and
tax liability in relation to the profit attributable to this unit. However, it has been
seen that transnational companies attempt to take fraudulently measures
through bilateral tax treaties to reduce their tax liability by abusing the concept
of permanent establishment. Organization for Economic Cooperation and
Development has introduced and published solutions and amendments to deal
with transnational corporations’ tax avoidance and tax evasion strategies the
application of which in Iran’s tax law system will be useful to determine the
competent tax jurisdiction and encountering ‘treaty shopping’ by transnational
corporations.
