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Studiegids

nl en

Corporate Tax Policy

Vak
2021-2022

Admission requirements

Students following this course are recommended to have completed at least one year of university education (not necessarily in law). We expect the students to have a good proficiency in English both orally and in writing.

Description

This course is recommended for bachelor of law and notarial law students and for exchange/study abroad students who have an affinity with the public debate on the taxation of multinationals.
This course offers a thorough introduction to the strategic corporate income tax issues at boardroom level of a multinational firm. In the past, tax planning and tax compliance was often left to (inhouse) tax experts with the aim of reducing the firm’s tax burden as much as possible. However, times have changed. Investment and location decisions of multinational firms are driven by many factors of which the tax system is one.

Empirical research based on interviews with CEOs and CFOs indicates that corporate income tax (CIT) continues to be ranked high as an important factor. This is not surprising because CIT, normally levied as a percentage of taxable profit, represents a significant cost to business. The effective corporate income tax burden of a multinational firm therefore has a potential impact on its profitability and stock price. From a business perspective, however, dealing with CIT is becoming increasingly challenging for several reasons.

Firstly, a trend of increasing regulatory burden can be observed all over the world. Since 2015 more than 100 countries have taken measures under the OECD Base Erosion and Profit Shifting project (BEPS project) to tackle tax avoidance by multinational firms.

The effect of these policies is, secondly, that international companies are confronted with increasing tax uncertainty, which hampers investment decisions.

Thirdly, an effect of these policies is that the global tax position of a multinational firm has become more visible to national tax administrations. By reporting how much tax is paid in each country, how much profits are made and how many employees are employed (Country-by-Country Reporting (CbCR)), national tax administrations of countries have an increasing amount of information to tax a larger piece of the worldwide profits of the multinational firm that would belong to them. The downside is an increased number of disputes between firms and tax authorities and an increased risk of international double taxation.

Fourthly, multinational firms are also confronted with pressure from society and politicians to pay their fair share of taxes. Media attention for tax avoidance schemes of individual firms is often the driver. This ethical dimension touches the field of corporate governance and in particular corporate social responsibility (CSR).

In the light of these challenges, the tax position is a strategic issue that requires the attention of the board of directors of a multinational firm. One of the key questions is what are the remaining - internationally accepted - opportunities for tax planning?

Course objectives

Objectives of the course
Identifying and analysing the challenges in the field of international corporate taxation for a multinational firm and being able to evaluate the public debate about it.

Achievement levels
Upon completion of this course students:

  • Can indicate and analyze the state of play of the international corporate income tax framework and its connecting factors;

  • Have a clear understanding of the arm’s length principle, the transfer pricing methods and its consequences for transfer pricing strategies;

  • Can indicate and analyze the level of aggressiveness of the most common international tax planning structures and can develop views on the consequences of these structures for corporate responsibility purposes (CSR), including reputational issues;

  • Can identify EU state aid risks of tax rulings (Apple, Starbucks, Ikea and Nike case);

  • Can apply the main rules of the Country-by-Country Reporting (CbCR) obligations and understand the implications for the calculation of the effective tax rate of these reporting obligations;

  • Can monitor developments towards Public Country-by-Country Reporting (PCbCR), including the voluntary disclosure of the corporate income tax paid per country (Shell case);

  • Can evaluate the phenomenon of tax haven countries;

  • Know the functions of a Tax Control Framework (TCF) within a multinational firm, including the control of tax audit risks;

  • Can understand the main rules, pros and cons of the US 2018 tax reform for companies (Tax Cuts and Jobs Act);

  • Can analyze the pros and cons of entering into cooperative relationships with tax administrations, for example, as part of the International Compliance Assurance Programme (ICAP) of the OECD.

Timetable

The detailed timetable for this course will be published on Brightspace.

Mode of instruction

Lectures

  • Number of (2 hour) lectures: 6

  • Names of lecturers: Prof. dr. J.L. van de Streek and Dr. M.F. Nouwen

  • Required preparation by students: Not applicable

Seminars

  • Number of (2 hour) seminars: 7

  • Names of instructors: Dr. M.F. Nouwen and F. Casano LLM

  • Required preparation by students: Case studies

Other methods of instruction

  • Description: Round table discussion with representatives from business

  • Number of (2 hour) instructions: 1

  • Names of instructors: guest lectures/ representatives from business

  • Required preparation by students: not applicable

Assessment method

Examination form(s)

  • Written exam including open questions (case studies)

Submission procedures

Areas to be tested within the exam
The examination syllabus consists of the required reading (literature) for the course, the course information guide and the subjects taught in the lectures, the seminars and all other instructions which are part of the course.

Reading list

Obligatory course materials
Literature:

  • Jérôme Monsenego, Introduction to Transfer Pricing, Wolters Kluwer, 2015.

  • Reader

Course information guide:

Reader: yes.

Recommended course materials

Registration

Students have to register for the lectures and working groups through uSis. With this registration you have access to the digital learning environment of this course in Brightspace. You may register up to 5 calendar days before the first teaching session begins.

Students have to register for exams and retakes through uSis. With this registration you also have access to the digital learning environment of this course in Brightspace You may register up to 10 calendar days before the exam or retake.

Contact information

  • Coordinator: Prof. dr. J.L. van de Streek

  • Work address: KOG, Steenschuur 25, (notify the secretariat B211)

  • Contact information:

  • Telephone number:

  • Email: j.l.van.de.streek@law.leidenuniv.nl

Institution/division

  • Institute: Institute of Tax Law and Economics

  • Department: Tax Law

  • Room number secretary: B211

  • Opening hours: 9.00 – 16.00 hrs

  • Telephone number secretary: +31715277840

  • Email: Belastingrecht@law.leidenuniv.nl

Remarks