Researching the ‘International’ in International Tax Law Céline Braumann Department of European, International and Comparative Law, University of Vienna Sour urce ce:H :H. Armstr trong ng R Roberts ts, engraving ng 1 16 Decembe mber 1773 1773, Alamy my Stock P Photo to
Overview 1. 1. The e Gener eneral I l Idea ea 2. 2. Theore oretic ical Fo Foundations ns a. Customary international law (CIL) in int‘l tax law (ITL) b. General principles of law (GP) in ITL 3. 3. Method odology 4. 4. Pr Preli elimina nary Fi Findings 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 2
Theoretical Foundations Page 3 Source: Alamy Stock Photo
International Tax Law State A State B (residence) (source) 3000 bilateral doub uble e tax ax trea eatie ies highly similar/identical OECD or UN Model Tax Conventions 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 4
Customary International Law = ‘unwritten law deriving from practice accepted as law.’ (ILC definition) • 2018 ILC Conclusions on the Identification of CIL • two-element approach: State practice + opinio juris 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 5
Types of Evidence for State practice (Conclusion 6) 1. Practice may take a wide range of forms. It includes both ph physical a and d verb rbal a acts ts. It may, under certain circumstances, includ ude i inaction. 2. Forms of State practice include, but are not limited to: diplomat atic acts ts and correspond ndenc ence; conduct ct in co conn nnection wi with r resolutions adopted by an international organization or at an intergovernmental conference; conduct i t in connection w with th tre treaties; executive conduct, including operational conduct “on the ground”; leg legisla lative a ve and nd administrative ve acts; and decision ons o of national court rts. 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 6
Types of Evidence for Opinio Juris (Conclusion 10) 2. Forms of evidence of acceptance as law ( opinio juris ) include, but are not limited to: public statements made on behalf of States; official al p publications; gover vernm nment ent leg legal o l opini nions ns; diplomatic correspondence; decision ons o of nat atio ional al c cou ourts; tre treaty ty p pro rovisions; and co cond nduct i in co connect ction w n with resolut utions adopted by an international organization or at an intergovernmental conference. 3. Failure to to re react ct over time to a practice may serve as evidence of acceptance as law ( opinio juris ), provided that States were in a position t to react and the circ re rcumstances c called fo for so r some re reacti tion. 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 7
Treaties as Historic Evidence for CIL (Conclusion 11) 1. A rule set forth in a tre reaty m may ay re reflect a rule of customary international law if it is established that the treaty rule: (a) codifi fied a rule o of customary ary intern rnat ational al l law existing at the time when the treaty was concluded; (b) has led to to the the c crystallization o of a rule o of customary i inte ternati tional l law that had started to emerge prior to the conclusion of the treaty; or (c) has given ri rise to a g a genera ral prac ractice that at is acc accepted as as l law aw (opinio juris), thus generat ating a a new ru rule of customary international law. 2. The fact that a rule is set forth i in a numb mber o of trea eaties m es may, , but d does es not nece cessari rily, i indicat cate that the treaty rule refl flect cts a a rule o of customary ry i intern rnat ational al law. w. 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 8
Treaties as Historic Evidence for CIL • Baxt xter er Paradox • Int‘l tax law lopsided: OECD OECD/B /BRICS S States dominate the field Selection b bias in data 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 9
General Principles of Law ‘General principles of law recognized by [civilized] nations’ (Art 38 ICJ Statute) • require comparative legal analysis • of domestic rules applied by most States in their international relations (eg. proceedings against foreigners) 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 10
Methodology 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 11 Source: Pieter Brueghel, The Tax-Collector’s Office, ca. 1615.
Empirical Part: Inductive, Mixed-Method Approach Type pes o of Ev Evide idence f for CIL: 1. conduct in connection with trea reaties es 2. 2. dom omesti tic p practi ctice: domestic court decisions, administrative and legislative acts 3. 3. st stat atements b by st stat ates (eg. model DTTs, Mutual Agreement Procedures [?], diplomatic acts and correspondence [?]) 4. State conduct within int interna nationa nal o organi nizations ns (esp. League of Nations, OECD and UN Tax Committee) Ev Evid idenc nce fo for Ge General al Pr Princ incipl ples: ◦ dom omesti tic p practi ctice: domestic court decisions, administrative and legislative acts 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 12
1 st Stage: Comparative analysis • Legal families of tax law (Thuronyi): 1. Commonwealth: UK 2. US American: USA 3. French: France 4. Latin American: Mexico 5. Northern Europe: Austria 6. Southern Europe: Spain 7. “Transition countries”: Russia; China 8. Japan/Korea: South Korea 9. Misc.: Iran, Indonesia 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 13
2 nd Stage: ‘Traditional’ Analysis of Evidence for CIL ◦ conduct in connection with trea reaties es ◦ state tements ts by st stat ates (eg. model DTTs, Mutual Agreement Procedures [?], diplomatic acts and correspondence [?]) ◦ State conduct within int interna nationa nal o organi nizations ns (esp. League of Nations, OECD and UN Tax Committee) mostly secondary literature 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 14
Anticipated Obstacles • Data collection (confidentiality issues, accessibility, etc) • Language barrier • Comparability for the coding of convergence 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 15
Testing the Normative Quality of: Customary I y Internat ational L Law: ◦ Empirics of jurisdiction to tax – truly only source/residence? ◦ Prim imac acy of of s sour ource-based ed taxation for - business profits - or all types of active income - or all types of income ◦ Definition of source ce/perm rmanent esta stablishment Gener eneral l Pr Principles es o of La Law: w: ◦ Abuse of rights/process 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 17
Th Than ank y k you ou - I I am am look ooking f for orwar ard to o your our f feedbac ack! k! 26/11/2019 Céline Braumann - celine.braumann@univie.ac.at Page 19
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