D5-International Taxation

D5-INTERNATIONAL TAXATION

This Paper introduces students to International Taxation, taking a closer look at issues such as the Global economic environment, History of international tax law, Double taxation conventions – DTC, Treatment of Income of non – residents, Treatment of Foreign income of residents, Transfer pricing and thin capitalization, International tax avoidance and Indirect taxes in international taxation.

Objectives

On completion of this paper, the student should be able to:

1. Explain the features of the global economic environment,
2. Discuss the source of international law and implications for Zambia,
3. Discuss the sources of double taxation and the reasons for double taxation conventions,
4. Calculate income tax for both residents and non- residents on worldwide income,
5. Discuss transfer pricing and thin capitalization rules,
6. Discuss the impact of international tax avoidance legislation for taxable person,
7. Apply indirect taxes to international transactions, including the role of the OECD and WTO.

Structure of the examination paper

There shall be a three hour examination consisting of four (4) compulsory questions of twentyfive (25) marks each. Candidates will be allowed fifteen minutes’ reading and planning time.

Detailed syllabus

• UNIT 1 - GLOBAL ECONOMIC ENVIRONMENT

• Element 1: Theories of international trade and objectives
• Element 2: Counter trade
• Element 3: Foreign Direct Investment
• Element 4: Multinational companies and trade agreements
• Element 5: Regional economic groupings
• Element 6: Globalization and its effects on the Zambian Economy

• UNIT 2 - HISTORY OF INTERNATIONAL TAX LAW

• Element 1: Work under the League of Nations
• Element 2: Work of the OECD
• Element 3: Work of the UN group of experts
• Element 4: Work of the EU

• UNIT 3 - DOUBLE TAXATION CONVENTIONS-DTC

• Element 1: Sources of Double Taxation (Residents & citizens)
• Element 2: Role of double taxation treaties
• Element 3: Methods of giving double taxation relief
• Element 4: Unrelieved overseas Tax
• Element 5: The OECD model

• UNIT 4 - TREATMENT OF INCOME OF NON-RESIDENTS

• Element 1: Domestic employment income of non-residents
• Element 2: Domestic Business profits of non-residents
• Element 3: Domestic Investment income of non-residents
• Element 4: Taxation of foreign income of non-residents

• UNIT 5 - TREATMENT OF FOREIGN INCOME OF RESIDENTS

• Element 1: Resident individuals receiving overseas employment income
• Element 2: Resident individuals with overseas businesses and investments
• Element 3: Calculation of income tax for residents with worldwide income

• UNIT 6 - TRANSFER PRICING AND THIN CAPITALISATION

• Element 1: Determination of profits of branches and associated enterprises
• Element 2: Consideration of examples of domestic transfer pricing legislation
• Element 3: Transfer pricing and Double Taxation Conventions (Art. 9 OECD MTC)
• Element 4: The OECD Transfer Pricing Guidelines
• Element 5: Consideration of examples of thin capitalisation legislation Element 7: Thin capitalization legislation and Double Taxation Conventions

• UNIT 7 - INTERNATIONAL TAX AVOIDANCE

• Element 1: Identification of tax havens
• Element 2: Domestic law approaches to international tax avoidance
• Element 3: Money-laundering legislation and international tax avoidance
• Element 4: Application of money-laundering legislation to foreign fiscal offences
• Element 5: Co-operation between revenue authorities
• Element 6: Conventions for administrative assistance in tax administration

• UNIT 8 - INDIRECT TAXES IN INTERNATIONAL TAXATION

• Element 1: The origin and destination bases for indirect taxes
• Element 2: GATT rules and the limitation on border tax adjustment
• Element 3: WTO rules and taxes – the WTO dispute resolution regime and taxation
• Element 4: Cross-border mergers
• Element 5: The OECD Model Double Taxation Convention on Estates and Inheritances
• Element 6: Taxation and international human rights instruments
• Element 7: The European/international Convention on Human Rights and taxation
• Element 8: The International Covenant on Civil and Political Rights and taxation
• Element 9: Tax Treatment of Foreign Missions