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Case Studies

Exercise nr. 1
Country A (No EoI)

EoI facility

Questions?

Questions
Which legal instruments will Country A need? Which article of OECD-UN MTC provides for EoI? How can we exchange info? (methods, means) What are the needs in terms of HR to deal with Spontaneous EoI? Confidentiality restrictions needed in Country A?. Under which article of the MTC? Benefits of Information exchange?

Case study 1
Country A
Conducting a TP audit
Credit support Audited company Price

Country B
Parent Company
Other subsidiaries

Case study 2
Country A Country B

100% Gross Company A Distributes XXX Brand

Company B Royalty payment Company C Purchases

The competent authorities of the Contracting The competent authorities of the Contracting States shall exchange such information as is States shall exchange such information as relevant for carrying out the provisions of is necessary for carrying out the this Convention and of the domestic laws of provisions of this Convention concerning the Contracting States concerning taxes taxes covered by the Convention insofar established by the Contracting States insofar as the taxation thereunder is not contrary as the taxation thereunder is not contrary to to the Convention. The exchange of the Convention. The exchange of information information is not restricted by Article 1. shall apply to taxes of every kind and Any information received by a Contracting description and is not restricted by Article 1. State shall be treated as secret in the Any information received by a Contracting same manner as information obtained State shall be treated as secret in the same under the domestic laws of that State and manner as information obtained under the shall be disclosed only to persons or domestic laws of that State and shall be authorities (including courts and disclosed only to persons or authorities administrative bodies) involved in the (including courts and administrative bodies) assessment or collection of, the involved in the assessment or collection of, enforcement or prosecution in respect of, the enforcement or prosecution in respect or the determination of appeals in relation of, or the determination of appeals in to, the taxes covered by the Convention. relation to, the taxes imposed on behalf of Such persons or authorities shall use the that State. Such persons or authorities shall information only for such purposes. They use the information only for such purposes. may disclose the information in public They may disclose the information in public court proceedings or in judicial decisions. court proceedings or in judicial decisions.

Hypothesis A Necessary For carrying out the provisions of this Convention concerning taxes covered by the Convention The exchange of information is not restricted by Article 1. Any informationsecretin respect of the taxes covered by the Convention.

Hypothesis B Relevant For carrying out the provisions of this Convention and of the domestic laws of the Contracting States concerning taxes established by the Contracting States The exchange of information shall apply to taxes of every kind and description and is not restricted by article 1 information .. Secret in respect of. the taxes imposed on behalf of that State.

Case study 3
Big Bank SA
(Country A) 100% owned

Money from business

Little Bank SA
(Tax Haven X )
100% owned

Bank transfers

Credit card expenses

Little Bank Trustees SA

HNWI

Request about possible investors?

Informants
Anonymous informant Ex-wife

Internal criminal investigation? Assistance under MLAT

Case study 4
Country A
John Smith
Technical assistance

Country B
Companies

Advisory Fees

ABC Bank

Case study 5.
when does it become a fishing expedition?

Country A
Mr. Jones
Computer consultant

Country B
Beta Bank

(No income reported)

Requests: 1.- Interest paid to Mr Jones 2.- Deposits in his account in Beta Bank (amounts, dates, sources) 3.- Any other bank account in banks in country B? 4.- names of all fiscal residents in A having bank accounts in B

Case study 6.
Country A
Alpha Limited
Management fees paid

Country B
Beta Limited

Requests: 1.- Identity of the legal owners of Beta Limited 2.- Whether the relevant services were actually provided 3.- if the management fees were included in Betas books and records 4.- Betas tax return

Case study 7.
Poland
Advisory services

USA
LLC
(100% owned)

Cyprus

Individual resident

Fees paid

Bank account
Funds moved offshore

What should the Polish Tax Admin. Request from the US? What do you expect the response would be?