Hybrid entities and DTA relief : India and New Zealand approach

Resource Information

The work Hybrid entities and DTA relief : India and New Zealand approach represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Continuing Resources.

Label

Hybrid entities and DTA relief : India and New Zealand approach

Creator

• Sheppard, H.E

Subject

• double taxation
• hybrid entity
• hybrid mismatch
• double non-taxation
• limited partnership
• tax treaty
• limited liability partnership

Language

eng

Summary

This article investigates whether the application of the New Zealand-India tax treaty to each country's most recent hybrid entity - a limited partnership (LP) in New Zealand and a limited liability partnership (LLP) in India - results in double taxation or double non-taxation. The article shows that, as evidenced by OECD Commentary, the existing treaty provisions ordinarily resolve the hybrid entity double taxation or double non-taxation. The article indicates that the treatment of foreign LPs / LLPs is complex for both taxpayers and tax administrators. A foreign LP / LLP could qualify as either a company, a firm, or even as an association of persons under domestic law. Further, current foreign tax credit rules do not provide definitive guidance in relation to taxation of a foreign LLP established in India with Indian resident partners. The same applies for an Indian LLP established in New Zealand with New Zealand resident partners. The article concludes that to encourage foreign investment in LPs / LLPs, countries should adopt domestic legislation designed to neutralize a mismatch. Undoubtedly, the OECD multilateral instrument (Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS) (MLI), conceptualized as part of the BEPS project, gives effect to the recommendations in Action 2 (Neutralizing the Effects of Hybrid Mismatch Arrangements), which if adopted, will substantially resolve this issue

Citation source

In: Journal of international taxation. - New York. - Vol. 30 (2019), no. 5 ; p. 49-63

Geographic coverage

• Asia
• Pacific Islands

Language note

English