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.
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?
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.
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 used by multinational companies, like Apple, Nike, Ikea, etc;
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 apply the main rules, pros and cons, and effectiveness of international (OECD) and supranational (EU) rules on exchange of information on tax rulings (tax agreements) agreed between multinationals and governments;
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 and can understand the main rules and effectiveness of the international (OECD) and supranational (EU) policy responses to address the issue of tax havens;
Can understand the main rules, pros and cons, and effectiveness of the OECD BEPS Pillar 1 (market state taxation for largest MNEs) and Pillar 2 (global minimum tax for large MNEs) proposals.
Mode of instruction
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
Number of (2 hour) seminars: 6
Names of instructors: Dr. M.F. Nouwen and F. Casano LLM
Required preparation by students: Case studies
Other methods of instruction
Description: Tax debate with representatives from business and government about transfer pricing, tax transparency, international tax avoidance, global tax deal, etc.
Number of (2 hour) instructions: 1
Names of instructors: guest lectures/ representatives from business. In the academic year 2020-2021 the following guests participated in the tax debate:
Mr. M. Van Dee (Head of Transfer Pricing, Global Tax Oversight & Control at Aegon N.V.)
Mr. J. Reijnierse (Tax Director Transfer Pricing, Friesland Campina)
Mr. Aaron Villarreal Lopez (Sr. Tax Advisor, Global Tax Team SES)
Mr. M.C. De Graaf (Head of APA/ATR-Team, Dutch Tax Authorities)
Mr. W. Van Veen (Specialist CBC-Reporting and Exchange of Tax Rulings, Dutch Tax Authorities)
Required preparation by students: not applicable
The grade for this course is based on a final written exam at the end of the course
Depending on the number of students, we may choose to make the exam an oral exam instead of a written exam.
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.
Regulation retake passed exams
In this course it is possible to retake an exam that has been passed (cf. art. 188.8.131.52 and further of the Course and Examination Regulations) on the condition that this course is not part of the minor. Students who have passed the exam may retake the final written assessment (test) of the course if they meet certain requirements. To retake a passed exam, students need to ask the Student Administration Office (OIC) for permission. For more information, go to 'course and exam enrollment' > 'permission for retaking a passed exam' on the student website.
Obligatory course materials
Jérôme Monsenego, Introduction to Transfer Pricing, Wolters Kluwer, most recent edition (a new edition is expected in 2022).
Check the website under “course and exam enrollment” for information on how to register for the course.
Coordinator: Dr. M.F. Nouwen
Work address: KOG, Steenschuur 25, (notify the secretariat B211)
Institute: Institute of Tax Law and Economics
Department: Tax Law
Room number secretary: B211
Opening hours: 9.00 – 14.00 hrs
Telephone number secretary: +31715277840
In case of (corona)restrictions imposed by the government, this course description is subject to change.