InternationalTaxation国际税收试卷4.doc

试 题 四 I. True or false (10 marks, 2marks/each) 1. International juridical double taxation only occures whenever there is multiple taxation on the same income of different taxpayers. ( ) 2. There are two types of tax jurisdiction: Source jurisdiction and citizen jurisdiction. ( ) 3. Foreign-source income earned by residents of a country that uses the deduction method generally is taxable at a higher effective rate than it would be under either the credit method or the exemption method.( )4. Many countries use the presence period criterion to identify the residence of individual.( )5. The chief difference between the UN Model treaty and OECD Model Treaty is that the UN Model Treaty imposes fewer restrictions on the tax jurisdiction of the source country.( )Please explain the following key terms. (12 marks,3 marks for each key term )1. Residence tax jurisdiction 2. exemption method3. arms length price4. transactional net margin method. Questions ( 28 marks )1. Please explain what methods may be used by resident country to eliminate the international double taxation caused by the conflicts between the residence jurisdiction and source jurisdiction.(4 marks)2. please explain the meaning of unlimited tax liability,and who will bear the unlimited tax liability. (3 marks) 3. Please explain the differences between branch and subsidiary.(6 marks) 4. Please explain the operation of a direct conduit company by a figure.(6 marks)5. Please explain the main features of arms length principle and principle of Global Apportionment. (8 marks). Case Study ( 20 marks )一 De Beers Consolidated Mines, Limited was incorporated in South Africa and its main business, eg, diamond mining, processing was in South Africa. Its head office was set in Kimberley(金伯利）, also it had many branches in other countries. The companys most directors lived in London, and the board meetings mostly were held in London. In 1906, the British tax bureau asked the company to pay the income tax on its worldwide income. The company appealed to the House of Lord. Please analyze the case based on the assumpution that South Africa and Britain have concluded a Double Tax Convention (DTC) along the lines of the UN Model Tax Convention.Questions: Whether should De Beers company pay its tax to the government of Britain? And explain the reasons.二 Mr. Xiao has a permanent home in China and works in a Chinese resident company. On Jan.1,1999, Mr. Xiao was appointed to the companys representative office in UK, and the term would be 2 years. He cancelled his household registration according to Chinese government regulations before he went to UK. His family is still in China and his main economic relationship is closer with China. Please analyze the case based on the assumpution that China and Britain have concluded a Double Tax Convention (DTC) along the lines of the UN Model Tax Convention.Questions:1.Which country will determine Mr. Xiaos residenceship, Britain or China?2. Which country will levy its tax on Mr. Xiao,Britain or China ? 3.What kind of conflict cause the issue of international double taxation?V. Computation ( 30 marks)一 HCo. is a resident company in Country A and earns income of 200, also gets dividend of 42.5 from its subsidiary Sco，established in Country B, which gets income of 100. Country A s income tax rate is 35%. Country Bs normal tax rate is 30%, but it offers halved tax rate to the subsidiary. Country A is willing to give a tax sparing credit to Hco, so calculate the tax Hco pays to the country A. 二 The parent company H situated in State A has a 50% owned subsidiary S in State B, and S has a 40% owned subsidiary G located in state C. In a taxable year, Hs income is 240 and gets the dividend from S. S gets the pretax income of 200 and gets the dividend of 32 from G .G s pretax income is 100,and pays its tax at the rate of 20%. As income tax rate is 40%, and Bs income tax rate is 30%, so if state A and B adopt the indirect credit method , calculate the tax paid by H to state A. 答案及评分标准 I.True and False ( 10marks, 2points/each): Please explain the following key terms. (12 marks,3 marks for each key term )1. Residence jurisdiction: a principle of taxation under which all income accruing to residents of a country, regardless of its source ,is subject to tax by that country. 2. Exemption method: exemption from domestic tax of some or all foreign-source income derived by residents.3. arms lengthe price: a price set on a transfer of goods,services,or intangible property between related persons that corresponds to the price that would be set in the marketplace on a similar transder between unrelated persons.4. transactional net margin method:a methodfordeterining transder prices in trancactions between related parties, typically based on the ratio of prodits earned by parties engaged in similar activities to some economice indicator ,such as invested capital or gross receipts. Questions ( 28 marks )1. deduction method ,low-tax rate method.exemption mehod ,credit method(4 marks)2. Unlimited tax liability means a tax payer need to pay its tax to government on his worldwide income, including domestic-source income and foreign-source income. (3marks)3. branch: not a independent legal entity without Capital tax,Income tax on interest or stock,and resident country usually adopt exemption method to eliminate double taxation . (3marks)Subsidiary: a independent legal entity with Capital tax,Income tax on interest or stock,and resident country usually adopt crdit method to eliminate double taxation. (3marks)4. (6 marks)5.ALP is set according to the market economy theory and its price is the real market price, which reflects the principle of equity(1 mark).It often imposes unreasonable burdens of proof on taxpayers(1 mark).It is extremely time-consuming and expensive to enforces(1 mark). ALP is likely to continue to be the internationally accepted and the most objective approach for resolving transfer pricing issues except in special circumstances(1 mark).FA is more easily to enforces and it also avoids some of the difficult audit problems.The arbitrariness of the predetermined formulas makes it difficult to reflect the particular circumstances of each multinational enterprises(1 mark).It relies heavily on access to foreign-based information.Substantial cooperation among governments would be needed to solve these problems(1 mark).FA is used by some subnational jurisdictions(1 mark). And it is likely to continue to be an important part of the international tax scene(1 mark). . Case Study ( 20 marks )一 . UK taxation bureau pointed out, the companys most directors lived in London, and the board meetings mostly were held in London. Many important decisions were decided such as diamond trade contract negotiation, diamond and other assets disposal, minerals, the distribution of the profits and company managers appointments, etc. London directors would always control the company who take the majority decision. Accordingly, its actual control center is in London. British lords agree the foregoing points of tax authorities , and judge the applicant company is the British residents company and should undertake duty to pay taxes to Britain.二 1. The British government determined that Mr. Xiao was a British resident in both year 1999 and 2000 according to its presence period criterion, since Mr. Xiao lived more than 183 days in the country during a taxable year. At the same time, Chinese government determined that Mr. Xiao was a Chinese resident according to domicile criterion. 2. there was residence-residence conflict. 3. There is a “Convention between China and UK with respect to taxes on income and capital”. According to the tie-breaker rules, he should pay its tax to China. Computation (30 mark