Objectives

Recognition for the preparatory modules of the Swiss Certified Tax Expert Diploma

Students having successfully passed both the exam of this course and that of Advanced Issues in International and European Tax Law (Prof. R. Danon) are eligible to obtain a waiver of the preparatory module relating to Intercantonal and International Tax Law of the Swiss Certified Tax Expert Diploma

Background and reasons for the course

International tax policy may be loosely defined as the set of principles shaping the taxation of returns from international trade and investment, the allocation of these returns between countries. Traditional international tax principles were initially developed in the 1920s by the League of Nations. Bilateral double taxation conventions (DTCs) seeking to prevent international double taxation have played and continue to play a key role in the development of cross-border exchanges with a view to promote economic growth. Other non-tax instruments such as International Investment Agreements (IIAs) also aim at encouraging foreign investment.

The 2008 financial crisis, however, led to a major reconsideration of traditional international tax principles. First, from an institutional perspective, international tax policy became a key priority for G20 countries. There was then a growing perception that international tax rules designed in the 1920s had not kept pace with the internationalization of business relations. This led to the emergence of the OECD/G20 Base Erosion and Profit Shifting” 1.0 (BEPS) initiative. The BEPS project was designed to “fix” the international tax system and represented the first milestone of what would quickly become a new multilateral vision of international tax policy. The so-called “Inclusive Framework” (IF) bringing together over 130 countries (including Switzerland) was then created in 2016. Yet, after the delivery of the OECD BEPS outcome in 2015, the pressure on international tax policy continued with more fundamental fiscal challenges such as those triggered by the digitalization of the economy, the allocation of taxing rights between “residence” and “market” countries and tax competition. As the outcome of the BEPS 1.0 initiative is been digested, a new global reform is on its way: a revolutionary system designed to allocate a portion of the residual profits of MNE groups to market countries (Pillar 1) and the introduction of a global minimum tax (Pillar 2) designed to curve tax competition (Pillar 2).

Objectives of the course

This course aims at exploring international tax policy in a holistic fashion and, to that end, bridges its institutional, strategic and political dimension. The topic is approached from the perspective of all stakeholders involved. In particular, the course discusses how international consensus is negotiated and formed at the level for example of the G20, the OECD and the Inclusive Framework. From a substantive perspective, the students also explore tax treaty policy and application as well as the resolution of international tax disputes. Dispute resolution under double taxation conventions (DTC) is in this regard also contrasted with that under International Investment Agreements (IIAs). Moreover, the emphasis is placed simultaneously on the global and Swiss landscape.

Contents

Content structure and content

The course is comprised of the following two parts with several sub-blocks

Part I: From the League of Nations to the BEPS world (21 September to 26 October)

Block 1 will be devoted to the evolution of international tax policy. Next, block 2 will be dedicated to the role of tax treaties and will explore their policy, negotiation, the challenges raised by their application, their dispute resolution mechanism and, finally, their relation with International Investment Agreements (IIAs).

Part II: The new world: the global tax agreement and the taxation of MNE groups (Pillar 1 and Pillar 2) (2 November)

This session will be dedicated to the new global reform currently shaped at the level of the “Inclusive Framework” (IF) and designed to allocate a portion of the residual profits of MNE groups to market countries (Pillar 1) and the introduction of a global minimum tax aimed at curving tax competition (Pillar 2). The topic will be approached both from an institutional, political and substantive perspective. Moreover, the impact of the reform will be also considered from a global regional perspective (i.e. inter alia impact for developed and developing countries) and from a Swiss perspective. The relation with US international tax policy will also be addressed.

References

All relevant materials relating to the course shall be available on Moodle

Evaluation

First attempt

Exam:

Written 2h00 hours

Documentation:

Allowed with restrictions

Calculator:

Not allowed

Evaluation:

Examen: écrit 2h00 heures

Documentation: autorisée avec restrictions

Cours donné en anglais

Retake

Exam:

Written 2h00 hours

Documentation:

Allowed with restrictions

Calculator:

Not allowed

Evaluation:

Examen: écrit 2h00 heures

Documentation: autorisée avec restrictions

Cours donné en anglais