Thursday, February 25, 2021
The winner of the International Fiscal Association's 2020 International Tax Student Writing Competition is Shay Moyal (S.J.D. 2020, Michigan; Davis Polk & Wardwell, New York), Don’t Stop the Beat, 166 Tax Notes Fed. 721 (Feb. 3, 2020).
Faculty Sponsor: Reuven Avi-Yonah
The recent addition to the Internal Revenue Code, the Base Erosion Anti-Abuse Tax (BEAT), is a subject of concern for many tax scholars and practitioners. This new provision joins a large family of measures that have been adopted worldwide and in the U.S.; however, unlike the other new International Tax provisions from the 2017 reform, the BEAT has neither a predecessor in prior laws nor in former proposals. To start, the phrase “Base Erosion” itself lacks clarity. Furthermore, the relatively short amount of time lawmakers took to enact the addition and the lack of any stated objectives require an inquiry into the objectives and original intent of this complex section of the code. This paper seeks to illuminate the original intent of the BEAT and the expansive language of its provisions by examining multiple factors such as its structure, legislative history, other International Tax principles, and the BEAT’s similarities to recent international tax trends – like Pillar II of the OECD BEPS or the Digital Services Minimum Taxes around the globe.
The mechanics and the language of the BEAT demonstrate major inconsistencies and ambiguities in its application. The broad definition of Related Parties suggests that one of its intents was to cover for the failure of the transfer pricing set of rules in the code. The relatively short legislative history shows some confusion as to the term Base Erosion at the beginning; however, the intent of this provision became clearer as the discussions progressed. The outbound and inbound Base Erosion provisions were enacted to cover for the failure of the current source rules to reflect the benefits that are provided by the U.S. to these taxpayers and as a unilateral international tax provisions that applies the Single Tax principle to set a minimum tax rate. This paper therefore leans on the similarities between the BEAT and the recent Digital Services Minimum Tax bills, Pillar II of the OECD BEPS, and the stated objectives of these bills, to examine the original intent of the BEAT based on its structure and the legislative history.
2021 IFA International Tax Student Writing Competition
Subject: Any topic relating to U.S. taxation of income from international activities, including taxation under U.S. tax treaties.
Open to: All students during the 2020-21 academic year pursuing a graduate degree. Any appropriate papers written in fall 2020 or spring and summer 2021.
Submission Deadline: September 30, 2021.
Prize: $2,000 cash, plus expenses-paid invitation to the IFA USA Branch Annual Meeting in Washington, D.C. in April 2022.
Here are the recent winners:
- 2019: David Rubin (Virginia), EB OR NOT EB? That is the Question Treasury Must Answer After Brexit, 49 BNA Tax Mgmt. Int’l J. 1 (2020)
- 2018: Ivan Ozawa Ozai (LL.B. 2019, McGill), Tax Competition and the Ethics of Burden Sharing, 42 Fordham Int'l J. 61 (2018).
- 2017: David Maranjian (J.D. 2017, Virgina), What’s in a Name? XILINX, ALTERA, and Why Using “Arm’s Length” as a Catchall is Causing Problems for Treasury, 47 BNA Tax Mgmt. Int'l J. ___ (2018)
- 2016: Amanda Kazacos (LL.M. 2016, NYU), BEPS Action 6: The Principle Purpose Test Revisited, and Amanda M. Leon (J.D. 2016, University of Virginia), If the Commission “LOBs” a Pitch to the ECJ, Will It Strike Out Again? Reconsidering European Court of Justice Jurisprudence Regarding Limitation on Benefits Clauses in Bilateral Tax Treaties and Why the United States Should Care.
- 2015: Sienna Carly White (J.D. 2015, Notre Dame), Cost Sharing Agreements & the Arm’s Length Standard: A Matter of Statutory Interpretation?, 19 Fla. Tax Rev. 191 (2016).
- 2014: Mateusz M. Krauze (LL.M. 2014, Harvard), Impact of Cloud Computing on Permanent Establishments under the OECD Model Tax Convention, 44 TM Int'l J. 44 (2015).
- 2013: Benjamin B. Vick (J.D. 2013, Boston University), Related-Party Transfers of Intangibles: Standards and Recommendations for Combating International Transfer Pricing Abuses, 43 TM Int'l J. 207 (2014).
- 2012: Assaf Prussak (S.J.D. Candidate, Michigan), The Income of the 21st Century: Online Advertising as a Case Study for The Implications of Technology for Source-Based Taxation, 16 Tul. J. Tech. & Intell. Prop. (2013).
- 2011: Bradford Craig (J.D. 2012, Temple), Congress, Have a Heart: Practical Solutions to Punitive Measures Plaguing the Heart Act’s Expatriate Inheritance Tax, 26 Temp. Int'l & Comp. L.J. 69 (2012).
- 2010: Kevin L. Preslan (J.D. 2011, Cleveland State), Turnabout is Fair Play: The U.S. Response to Mexico’s Request for Bank Account Information, 1 Global Bus. L. Rev. 203 (2011).
- 2009: Samuel J. Lee (LL.M. 2009, Boston University), A Recommendation, in Light of the Current Economy, for Revising the Way § 304 Applies to International Transactions, 38 Tax Mgmt. Int'l J. 500 (Aug. 2009).
- 2008: Jason Sullivan (LL.M. 2008, Florida), Debt-Equity Hybrid Instruments in a Cross-Border Setting: A Focus on the U.S. Foreign Tax Credit, 53 Tax Notes Int'l 817 (Mar. 2, 2009).