ADITextra – the blog for ADIT International Tax. Choosing the right international tax course for you is key to your success.
ADITextra tells you more about Extratax Training’s online international tax courses to help you make this important decision.
Read on to learn about the topics covered in this week’s online classes. The spotlight for this edition of ADITextra is on Principles of International Taxation.
1. Transfer Pricing
In Tuesday’s session, James (Jimmy) Ryan started the class by looking at recharacterisation issues. Tax authorities can recharacterise a transaction when they feel it should be disregarded, setting aside the contractual terms of a transaction. A tax authority can do this in one of two ways:
- Disregard the actual transaction; or
- Impose another transaction which is closer in substance to what independent entities would have entered into.
Tax authorities typically use domestic anti-avoidance legislation to achieve this outcome, for example, a GAAR (General Anti-Avoidance Rule).
Jimmy moved on to discuss Permanent Establishments in the context of transfer pricing. Firstly considering the creation of a Permanent Establishment, then the attribution of profits to a PE. In answering PE questions in your exam, you should be comfortable discussing case law on PEs, including:
Online Transfer Pricing Course
If you regularly read ADITextra, you’ll have heard us talking about the importance of practising past paper questions. There are no Transfer Pricing classes for the next two weeks, so it’s the perfect time for our students to consolidate their knowledge and work on their exam technique.
Jimmy had planned to release a ‘test’ mock exam for completion over the break, before the full mock takes place at the beginning of May. But then he mentioned to the students that he’s always happy to give them more exam-style questions. And guess what? He’d barely finished speaking before the students said yes, great idea, please give us two mock papers to do! It’s fantastic to see such dedication and enthusiasm from our students.
We’re no longer accepting bookings for this semester’s Transfer Pricing course. If you would like to express your interest in joining us for the December 2021 course, please use the contact form below or email email@example.com.
2. Principles of International Tax
In Wednesday’s Principles of International Tax course, Jimmy discussed the following key topics from the ADIT syllabus:
Hybrid entities and hybrid mismatches
Tax havens and harmful tax competition
Controlled foreign company (CFC) anti-avoidance legislation
Check out the Spotlight section below to learn more about entity classification.
Online Principles of International Tax Course
One of the benefits of joining live classes in small groups is asking questions and chatting with the tutor & other students. In this week’s class, the lively discussion covered a range of topics including digital services tax, withholding taxes, work of the OECD on the digital economy and double taxation.
We’re no longer accepting bookings for this semester’s Principles of International Taxation course. If you would like to express your interest in joining us for the December 2021 course, please use the contact form below or email firstname.lastname@example.org.
3. UK Tax
The UK tax course is currently on a two week break. This gives the students time to review what they’ve learnt so far, revisit any challenging areas and work on past exam questions. Plus some relaxation time, of course!
ADIT UK Tax – Distance Learning Course
Although we’re no longer accepting bookings for this semester’s United Kingdom Advanced International Tax course, you can still benefit from our expertise. We have compiled a comprehensive set of online study materials for the ADIT UK paper. We’re launching a limited edition beta-testing version of these materials as part of our distance learning course this week.
The UK distance learning course was written by Catriona Loughran FCA CTA ADIT and other experienced tax professionals, including:
- Lorraine Nelson, International Tax Director at Grant Thornton
- James Heathcote, Private Client Director at Lancaster Knox
- Jane Lee, Head of Employer Solutions at Grant Thornton
- Hannah Hurley, Corporate Tax at Blick Rothenberg
- Ciaran McGee, VAT Specialist and Founder at CJM Chartered Tax Advisers
- Sarah Blakelock, international tax and dispute resolution advisor
If you are interested in joining the distance learning course for the June 2021 exam, please email email@example.com.
4. US Tax
In Thursday’s US Taxation course, Ishali Patel shared her international tax expertise, discussing:
Whether a US trade or business exists
Safe harbours for US investment activity
Effectively connected income
US branch taxes
US International Tax Course
It’s great to see students from across the world coming together to learn about US tax. A minority work in US tax, the rest of them have chosen the US tax module because of its importance in the global business environment.
We’re no longer accepting bookings for this semester’s United States Taxation course. If you would like to express your interest in joining us for the next ADIT exam sitting for Module 2.10 in June 2022, please use the contact form below or email firstname.lastname@example.org.
5. Spotlight on Principles of International Tax
Each week, we’ll put the spotlight on a topic covered in one of our classes. This time, let’s look at entity classification. While this was discussed in this week’s Principles of International Tax course, it’s equally relevant for the UK Tax module.
Private International Law is a branch of law dealing with a state’s domestic recognition of overseas law, and how the courts interpret overseas legislation in a domestic context. How do domestic courts recognise overseas entities and payments? A number of questions have been developed by UK law to help the courts determine the nature of the entity and the payment being made:
- What kind of entity is it under the foreign law?
- What kind of payment is it under the foreign law?
- Given the answer to these questions, what is the tax treatment in the UK?
The key case law is the UK Court of Appeal’s decision in Memec plc v HMRC. For your exam, you should know the tests set out in the Memec case for determining whether an entity is transparent or opaque for UK tax purposes:
Does the entity have a separate legal identity?
Has the entity issued share capital (or something analogous to share capital)?
Is the business carried on by the entity or by its members?
Are the members of the entity entitled to a share of the profits as they arise or only when the it distributes the profits to its members?
Who is responsible for debts incurred by the business?
Does the entity beneficially own its assets or do the members?
You should be able to apply these tests to a scenario given in the exam, discussing whether an entity is likely to be considered as transparent or opaque.
Watch & Learn
Watch part of this week’s Principles of International Tax course for an explanation of ‘Entity Classification‘.
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