Comparative Income Taxation: A Structural Analysis

by Ault, Hugh J.; Arnold, Brian J.; Gest, Guy (CON); Harris, Peter (CON); Melz, Peter (CON)

• ISBN13: 9780735551954
• ISBN10: 0735551952
• Edition: 2nd
• Format: Paperback
• Copyright: 2004-08-05
• Publisher: Wolters Kluwer Law and Business

Summary

When you want to show your students how other countries deal with issues of income tax design, this up-to-date and insightful text is your best source. Comparative Income Taxation, Second Edition, studies the different solutions to common problems adopted in nine industrialized nations, stimulates a deeper understanding of the U.S. system, and suggests possible alternatives. This impressive work is known for its: comparative analysis of the structural and design issues involved in the mature tax systems of Australia, Canada, France, Germany, Japan, The Netherlands, Sweden, The United Kingdom, And The United States suggested approaches for alternative ways of dealing with corresponding issues in a domestic setting distinguished authorship, drawing on the talents of experts in each of the national systems considered refreshingly clear and effective text coverage of recurring problems of income tax design with respect to individuals, business organizations, and international transactions, such as the taxation of fringe benefits, The treatment of unrealized appreciation at death, The classification of business entities, and expatriation to avoid taxes Fully updated to reflect the state of the law through 2003, The Second Edition: presents some differences in emphasis and organization to keep pace with recent developments includes several new sections reflecting the dramatic and widespread changes in the basic systems for corporate-shareholder transactions contains additional information on the institutional background of the European Union provides more references to electronic sources of further information in the bibliography to enrich classroom discussion of domestic problems and to set a foundation for further research and study, be sure to recommend Comparative Income Taxation: A Structural Analysis, Second Edition, To your students.

Table of Contents

Acknowledgment	p. xvii
Preface	p. ixx
Introduction	p. xxi
General Description	p. 1
Australia	p. 3
History of the income tax	p. 3
Constitutional issues	p. 4
Tax rates	p. 5
Composition of fiscal system	p. 5
Basic structure of the income tax	p. 6
Tax legislation	p. 7
Legislative process	p. 7
Statutory Style	p. 8
Statutory interpretation	p. 10
Courts Dealing with Tax Matters	p. 11
Appeal processes	p. 11
Judicial expertise	p. 13
Tax administration	p. 13
General principles	p. 15
Relation of tax and financial accounting	p. 15
Respect for legal form	p. 16
Tax avoidance and anti-avoidance legislation	p. 17
Sources of tax law	p. 20
Canada	p. 23
History of the Income Tax Act	p. 23
Constitutional Issues	p. 23
Tax Rates	p. 24
Composition of the Fiscal System	p. 24
Basic Structure of the Income Tax	p. 25
Tax Legislation	p. 27
Tax legislative process	p. 27
Statutory style	p. 27
Statutory interpretation	p. 28
Courts Dealing with Tax Matters	p. 29
Tax Administration	p. 30
General Principles	p. 32
Relationship between tax and financial accounting	p. 32
Respect for Civil or Private Law Form	p. 33
Anti-avoidance doctrines and rules	p. 33
Sources of Tax Law	p. 35
France	p. 37
History	p. 37
Constitutional Issues	p. 38
Tax Rates	p. 39
Progressive individual income tax (IR)	p. 39
Flat rate individual income taxes	p. 40
Corporate income tax	p. 40
Basic Structure of the Fiscal System	p. 41
Basic Structure of the Income Tax	p. 41
Income taxes on individuals	p. 41
Corporate income tax	p. 43
Legislation	p. 44
Legislative process	p. 44
Statutory drafting	p. 45
Statutory interpretation	p. 45
Courts Dealing with Tax Matters	p. 46
Structure of the courts	p. 46
Judicial style	p. 47
Administration	p. 48
Tax assessment, collection and auditing	p. 48
Administrative interpretations	p. 49
General Principles	p. 50
Relationship between tax and financial accounting	p. 50
Respect for civil or private law form	p. 50
Anti-avoidance doctrines and rules	p. 50
Sources of Tax Law	p. 51
Germany	p. 53
History	p. 53
Constitutional Issues	p. 53
Legislative Powers	p. 53
Sharing of tax revenue	p. 54
Impact of Basic Rights on Taxation	p. 54
Tax Rates	p. 55
Individual Income Tax	p. 55
Corporate Income Tax	p. 55
Composition of the Fiscal System	p. 55
Revenue share of specific taxes	p. 55
Shift from direct taxes to indirect taxes	p. 57
Social security contributions	p. 57
Basic Structure of the Income Tax	p. 58
Individual Income Tax	p. 58
Principles of the Tax Base (Global or schedular approach, accrual or consumption-based approach, 'dualism' of income)	p. 58
Private Expenses	p. 59
Non-resident taxpayers	p. 60
Corporate income tax	p. 60
Taxable entities	p. 60
Tax Base	p. 60
Tax system	p. 61
Trade tax	p. 62
Tax Legislation	p. 63
Legislative Process	p. 63
Statutory style	p. 63
Statutory interpretation	p. 63
Courts dealing with tax matters	p. 64
Structure of the courts	p. 64
Judicial Style	p. 65
Tax Administration	p. 65
General	p. 66
Assessment and Audit	p. 66
Tax compliance	p. 67
Administrative Style	p. 68
General Principles	p. 69
Relationship between tax and financial accounting	p. 69
Respect for legal form	p. 69
Anti-avoidance doctrines and rules	p. 70
Sources of Tax Law	p. 70
Japan	p. 73
History	p. 73
Constitutional Issues	p. 75
Tax Rate	p. 76
Composition of the Fiscal System	p. 77
Basic Structure of the Income Tax	p. 78
On Individuals	p. 78
On Corporations	p. 79
Tax Legislation	p. 80
Legislative Process for Income Tax Measures	p. 80
Statutory Style	p. 80
Statutory Interpretation	p. 81
Courts Dealing with Tax Matters	p. 82
Structure of the Courts	p. 82
Judicial Style	p. 82
Tax Administration	p. 83
General principles	p. 85
Relation between Tax and Financial Accounting	p. 85
Respect for Legal (Civil Law) Form	p. 86
Anti-Avoidance Doctrines or Legislation	p. 86
Sources of Tax Law	p. 86
The Netherlands	p. 89
History of the Netherlands income tax system	p. 89
Constitutional issues	p. 90
In general	p. 90
Impact of human rights conventions and EC Treaty fundamental freedom provisions	p. 90
Income Tax Rates	p. 91
Composition of the Fiscal System	p. 92
Basic Structure of the Income Tax	p. 92
Individuals	p. 92
Corporations	p. 93
Tax Legislation	p. 93
Tax legislative process	p. 93
Statutory style	p. 94
Statutory interpretation	p. 94
Courts dealing with tax matters	p. 95
Tax administration	p. 96
In general	p. 96
Taxpayer bill of rights; ombudsman	p. 96
Release of Government information to taxpayers	p. 97
Advance rulings	p. 97
Assessment, administrative appeal and appeal to courts	p. 97
General Principles	p. 98
Relationship between tax and financial accounting	p. 98
Respect under tax law for the civil (private) law form of contracts	p. 99
Anti-avoidance doctrines and rules	p. 99
Sources of Tax Law	p. 100
Sweden	p. 101
History	p. 101
Constitutional Issues	p. 101
Tax Rates	p. 102
Composition of the Fiscal System	p. 103
Types of taxes	p. 103
Basic Structure of the Tax System	p. 104
Individuals	p. 104
Earned income	p. 104
Income from capital	p. 105
Corporations	p. 106
Tax Legislation	p. 107
Legislative process	p. 107
Statutory style	p. 108
Statutory interpretation	p. 109
Courts dealing with tax matters
Tax Administration	p. 110
General principles	p. 111
Relation of tax and financial accounting	p. 111
Respect for legal form	p. 112
Anti-avoidance doctrines and rules	p. 112
Sources of Tax Law	p. 112
The United Kingdom	p. 115
History - Income Tax	p. 115
Corporation Tax	p. 116
Constitutional Issues	p. 117
Rate structure and reliefs, 2003-04	p. 120
Composition of the Fiscal System	p. 121
Basic Structure of the Income Tax	p. 121
On individuals	p. 121
Capital Gains Tax (CGT)	p. 123
On corporations	p. 124
Tax Legislation	p. 124
Statutory style	p. 125
Statutory interpretation	p. 125
Courts dealing with tax matters	p. 126
Structure of the courts	p. 126
Judicial Review	p. 127
Judicial style	p. 128
Legislative history	p. 128
Precedent	p. 128
Tax Administration	p. 129
General Principles	p. 130
Relationship between tax and financial accounting	p. 130
Respect for legal form	p. 131
Anti-avoidance doctrines and rules	p. 132
Sources of Tax Law	p. 134
Legislation and materials	p. 134
Official Practice and Rulings	p. 135
Treaties	p. 135
Secondary sources	p. 135
The United States of America	p. 137
History of Federal Income Tax	p. 137
Constitutional Issues	p. 138
Tax Rates	p. 139
Composition of the Fiscal System	p. 140
Basic Structure of the Income Tax	p. 141
Individuals	p. 141
Corporations	p. 145
Tax Legislation	p. 146
Legislative process	p. 146
Statutory style	p. 147
Statutory interpretation	p. 148
Judicial Structure and Style	p. 149
Administrative, Taxpayer, and Judicial Style	p. 150
Administrative style	p. 150
Taxpayer style	p. 151
General Principles	p. 152
Relationship between tax and financial accounting	p. 152
Respect for legal form	p. 153
Anti-avoidance	p. 153
Sources of Tax Law	p. 154
The European Union	p. 157
Introduction	p. 157
Organs of the European Community	p. 158
Taxes - The Commission	p. 159
Taxes - The EC Court of Justice	p. 160
Basic Income Taxation	p. 165
Global Versus Schedular Design of Income Tax	p. 167
Inclusions in the Tax Base	p. 169
Employee Fringe Benefits	p. 170
General	p. 170
Employer-Provided Pension Benefits	p. 176
Imputed Income from Owner-Occupied Housing	p. 181
Gifts	p. 183
Gifts outside a business setting ('personal' gifts)	p. 184
Gifts in a business or employment context	p. 184
Prizes and awards	p. 186
Scholarships and grants	p. 187
Cancellation of indebtedness	p. 188
Gambling	p. 190
Illegal income	p. 191
Windfalls	p. 192
Subsidies	p. 193
Realization and recognition of gain	p. 194
Capital gains and losses	p. 198
Deductions	p. 205
Mixed business and personal expenses	p. 206
Commuting	p. 207
Moving expenses	p. 209
Clothing	p. 211
Business travel	p. 212
Business entertainment	p. 214
Child care	p. 216
'Hobby losses' and the criteria for determining business versus personal activities	p. 218
Capital costs and recovery methods	p. 221
Determining capital costs	p. 221
Capital cost recovery systems	p. 222
Educational costs	p. 227
Deduction of personal costs	p. 228
Interest	p. 228
Personal losses	p. 230
Medical expenses	p. 231
Charitable donations	p. 233
Limitations on deductions and losses	p. 234
Illegal payments, fines, penalties	p. 234
Expenses associated with tax-exempt income	p. 236
Quarantining' and other limits or restrictions on certain categories of expenses	p. 237
Accounting	p. 243
Basic accounting methods	p. 243
Inclusion of advance payments	p. 248
Income treatment of deferred payments	p. 249
Original issue discount obligations and other complex financial instruments	p. 251
Attribution of Income	p. 259
Definition of taxable unit	p. 259
Alimony and child support	p. 264
Limitations on assignment of income	p. 266
Taxation of Business organizations	p. 271
Corporate-Shareholder Taxation	p. 273
Overview of corporate tax systems	p. 273
Defining entities subject to tax	p. 277
Issues in corporate formation	p. 279
Issues involving capital structure	p. 283
Taxation of corporate distributions	p. 287
Basic structure of distribution rules	p. 287
Relating distributions to corporate earnings	p. 289
Constructive dividends	p. 290
Intercorporate dividends and capital gains	p. 291
Distributions of appreciated or depreciated property	p. 294
Distributions involving changes in corporate capital structure	p. 296
General	p. 296
Stock dividends	p. 297
Redemptions	p. 299
Liquidations	p. 301
Corporate reorganizations and restructuring	p. 304
General	p. 304
Merger transactions	p. 305
Share exchanges	p. 309
Non-merger asset reorganizations	p. 312
Corporate divisions: 'Demergers'	p. 313
Transfer and limitations on transfer of corporate tax attributes	p. 317
Consolidated corporate taxation	p. 320
Special tax regimes for closely-held corporations	p. 324
Integration of corporate and shareholder taxes	p. 327
General	p. 327
Treatment of capital gains on shares	p. 330
Partnership Taxation	p. 335
Qualification for pass-through taxation	p. 336
Basic structure of pass-through taxation	p. 337
Liabilities, tax cost and losses	p. 339
Transactions between partner and partnership	p. 341
Disposition of a partnership interest	p. 342
Liquidation of the partnership	p. 343
International Taxation	p. 345
Residence Taxation	p. 347
Bases for the assertion of personal taxing jurisdiction	p. 347
Individuals	p. 347
Corporations	p. 349
Change of status	p. 351
Change of status of individuals	p. 351
Change of status of corporations	p. 353
Dual residence	p. 355
Mechanisms for relief of double taxation	p. 357
Issues in the structure of a foreign tax credit system	p. 360
Creditable taxes	p. 360
Limitations on the credit	p. 362
Allocation of expenses to foreign-source income	p. 365
Treatment of losses in the credit computation	p. 367
Carryover of excess credits or limitation	p. 368
Indirect credit for foreign taxes paid by foreign subsidiaries	p. 369
Share ownership requirements	p. 369
Tier limitations	p. 370
Computation of the indirect credit	p. 370
Interaction between indirect credit and limitation system	p. 371
Issues in the structure of an exemption for foreign income	p. 372
Structure of the exemption	p. 372
Classes of exempt income	p. 372
Allocation of deductions to tax-exempt income	p. 375
Treatment of foreign losses	p. 376
Limitations on exemption or deferral of income of foreign corporations	p. 377
Limitations on exemption for shareholders in foreign corporations with significant domestic share ownership	p. 378
Limitations on deferral for shareholders of foreign corporations with significant domestic share ownership	p. 380
Special provisions dealing with domestic portfolio investment in foreign investment companies	p. 386
Outbound transfers to foreign branches or subsidiaries	p. 389
Source Taxation	p. 395
Issues in the structure of net basis taxation of business income	p. 395
Threshold of activity	p. 395
Attribution of business income for net basis taxation	p. 397
Determination of deductions in the net basis taxation of business income	p. 401
Taxation of employment income	p. 403
Other situations involving net basis taxation	p. 405
Issues in the structure of gross basis taxation	p. 406
Branch profits tax	p. 410
Limitations on base-eroding payments to non-residents	p. 411
Restrictions on source-based taxation of non-residents within the European Union	p. 414
Additional International Topics	p. 419
Special international avoidance rules	p. 419
Selected intercompany pricing issues	p. 420
Corporate-shareholder taxation in the international context	p. 425
General	p. 425
International aspects of capital gains	p. 427
Selected treaty issues	p. 428
Relation between domestic law and treaties; treaty override	p. 428
Approach to treaty interpretation	p. 430
Anti-treaty shopping policy	p. 432
Non-discrimination	p. 434
'Model' tax treaties	p. 435
Tax sparing by treaty	p. 437
Selected Bibliography	p. 439
General Description	p. 440
Australia	p. 440
Canada	p. 440
France	p. 440
Germany	p. 441
Japan	p. 441
The Netherlands	p. 441
Sweden	p. 442
The United Kingdom	p. 442
The United States of America	p. 442
Basic Income Taxation	p. 443
Inclusions in the tax base	p. 443
Employee Fringe Benefits	p. 443
Imputed Income	p. 443
Gifts	p. 444
Prizes and awards	p. 444
Scholarships and grants	p. 444
Cancellation of indebtedness	p. 444
Gambling	p. 445
Illegal income	p. 445
Subsidies	p. 445
Realization and recognition of gain	p. 446
Capital gains and losses	p. 446
Deductions	p. 447
Mixed business and personal expenses	p. 447
'Hobby losses' and the criteria for determining business versus personal activities	p. 448
Capital costs and recovery methods	p. 448
Educational costs	p. 449
Deduction of personal costs	p. 449
Limitations on deductions and losses	p. 450
Accounting	p. 451
General	p. 451
Advanced/Deferred Payment	p. 452
Accounting for original issue discount and complex financial instruments	p. 452
Attribution of Income	p. 453
Definition of taxable unit	p. 453
Alimony and child support	p. 454
Limitations on assignment of income	p. 455
Taxation of Business Organizations	p. 455
Corporate-Shareholder Taxation	p. 455
Overview of corporate tax systems	p. 455
Defining entities subject to tax	p. 457
Issues in corporate formation	p. 457
Issues involving capital structure	p. 458
Taxation of corporate distributions	p. 458
Liquidations	p. 459
Corporate reorganizations and restructing	p. 460
Transfer and limitations on transfer of corporate tax attributes	p. 460
Consolidated corporate taxation	p. 460
Special tax regimes for closely held corporations	p. 461
Partnership Taxation	p. 461
International Taxation	p. 462
General Descriptive Material by Country	p. 462
Residence Taxation	p. 463
Bases for the assertion of personal taxing jurisdiction	p. 463
Change of status	p. 463
Mechanisms for relief of double taxation	p. 464
Limitations on exemption or deferral of income of foreign corporations	p. 465
Outbound transfers to foreign branches or subsidiaries	p. 466
Source Taxation	p. 466
Issues in the structure of net basis taxation of business income	p. 466
Issues in the structure of gross basis taxation	p. 467
Branch profits tax	p. 467
Additional International Topics	p. 468
Special international avoidance rules	p. 468
Selected intercompany pricing issues	p. 468
Selected treaty issues	p. 469
Index	p. 473
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