Resident Tiebreaker Under Article 4(2) Of The Oecd Rule - 275 Words

Resident Tiebreaker Under Article 4(2) Of The Oecd Rule (Essay Sample) Content: RESIDENT TIEBREAKER UNDER ARTICLE 4(2) OF THE OECD RULENameCourseInstitutionTutorDateResidence tiebreakerIntroductionResidence tiebreaker arises when a person is considered as a tax payer in two countries due to considerations of being a resident in both. In such a case, a person may be overburdened with tax obligation. This issue facilitated for the development of a treaty for the purpose of tax reconciliation. The treaty will depend on the countries that the person is a resident. For instance, in the U.S. the law provides for a treaty that breaks the ties. A person will be subjected to the residency rules of just one of the countries in light of tax calculations. An individual on assignment in a foreign nation is most likely to fall under dual taxation. This may lead to a double taxation system. The above necessitates for the individual to utilize the relevant treaties available in determining residency. Fortunately, many nations in the world have come together in d evelopment of international laws that will safeguard such individuals from such huge tax burdens. There are conditions that an individual should fulfill to be considered taxpayer of country X instead of country Y. These conditions are referred to as the tiebreaker rules.[See Peter, A., Glicklich, A. (2007) New Canada-US Protocol Contains Certain Hybrid Entity Surprises. Canadian Tax Journal.] Different countries use different criteria in carrying out assessments to determine the residence of an individual. There are instances where a person can be considered as a taxpayer in two different countries. The law provides for dual citizenship. In such a case, the individual can pay tax twice under specified laws of the two countries. In most countries, the residence factor is addressed in Article 4. They all address it as the Residence Article. In a case where the two countries have a treaty in respect to tie-breaking rules, the two countries can settle their claims on which country has the right to tax the individual. In many cases, these provisions are highlighted in paragraph 2 of Article four of the law. The international law provides the treaty with supreme powers over the domestic laws in determining the residence of the person. The U.S. has adopted rules build by the OECD. The rules allow a state to carry out an assessment of whether a person is a resident under consideration of its internal laws. There are four determinants stipulated in the OECD model tax convention. The factors are permanent home, center of vital interest, habitual abode, and citizenship.[See Kevin, D. (2009). Canadian Residence for the purposes of a Double Taxation Agreement consequences for tax liability. Tax for the Owner-Manager] [See OECD, (1998). Harmful Tax Competition: An Emerging Global Issue. Tax Sparing: A Reconsideration] Application for a treaty tiebreakerThere is a sequence applying for tiebreaker rules. The existence of differences in their order stipulates that each treat y single-handed should be carefully examined before making a claim of residence. During application, the subject is supposed to implement the recently updated or revised guidelines of the OECD. These guidelines are international treaties under public international law. They are subject to interpretation accord to international law principles.Article 4(3) states that where a person is a residence of two countries under contracting terms, the person shall be deemed to be resident in the country where effective management is situated. Article 4(3) stipulates that the two contracting states shall determine by mutual agreement where the individual shall be deemed resident in view of tax payment. If the two contracting states come into a disagreement, the individual shall not fall under residence of either state. This means that if the contracting states do not come to agreement, the taxpayer will only benefit from the fact that he or she will be exempt from double taxation.[See Wittendor f, J. (2010). Transfer Pricing and the Arm's Length Principle in International Tax Law. Kluwer L. Intl.] [See Carroll, M. B. (1939). League of Nations strategy for Prevention of International Double Taxation and Fiscal Evasion. League of Nations 1939 and Wittendorf, supra.] In a typical tiebreaker, the treaty provisions states that an individual is assumed as a resident of a country in which the individual has a permanent home. In case of maintaining two homes in two countries, the individual will be deemed a resident of the country, which his or her major vital interests are vested. In case it does not provide clear boundaries, the individual shall be deemed a resident of a particular country by determining his or her habitual abode. In other instances, the individual may maintain habitual abodes in both countries. In such a case, the individual shall be treated as a resident of the country that his or her nationality is based. In case of having both countries' nationality, the com petent authorities are brought to task in aid of mutual agreement towards settlement of the issue.[See Vogel, K. (1997). Vogel's models on Double Taxation Conventions in efforts to straighten tiebreaker 3rd ed. Kluwer L. Intl.] Factors in determining tiebreakerIn view of advising a person under such a circumstance, the following factors will be used to determine his or her resident under the agreements on OECD. The factors below are under the category of personal and family factors.[See Carroll, M. B. (1939). ). League of Nations strategy for Prevention of International Double Taxation and Fiscal Evasion. League of Nations 1939 and Wittendorf, supra.] Permanent homeThe number one factor carrying a determinant cause stipulates that the individual should have a home that is viewed as permanent. The OECD defines a permanent home as a place where an individual maintains an abode. In lighter points, a home can be represented by a furnished room. For a permanent home to qualify as a deter mining factor, the individual should always consider it always available for his or her use at all times continuously and not in instances where he or she needs to put up for a few days or a short duration. The OECD stipulates that any form of home may be put in consideration. Thus, a house or apartment belonging to or rented by the individual shall mean a home. What matters in such instances is the permanence of the home. Residency will be determined in favor of the country an individual has a permanent home.[See Carroll, M. B. (1933). Taxation of Foreign individuals under the rule of tioebreaker concepts, Allocating Taxable Income methods vol. IV. League of Nations.] Centre of vital interestAn individual, upon failing the home residency test shall be subjected to a center of vital interest test. This test will put the individual into an examination of his or her family and social relations, his or her occupation, political cultural activities, and the centre of his administration towards his own property. In this case, where a person maintains a home because his or her relatives live there and has possessions, can be used as a determinant of individual residence. The above elements demonstrate that the individual has centered his interests on that state. The law maintains that it is hard to shift an individual's center of interest.Habitual abodeFactual determinations are what make up tiebreaker rules. If the above points cannot resolve the issue of residency, then habitual adobe is used to break the test. Habitual abode is defined as the state where an individual spent the most time.CitizenshipIn cases where habitual adobe exists in both states or do not exist in either of the state, the committees determining the residency shall use the citizenship as a determining factor. Residence shall be ruled in favor of the country that the individual is a citizen. In cases where the individual is, a citizen of both states or is not a citizen of any of the two states; the competent authorities are given the mandate to settle the claim by mutual agreement.[See Lang, M. (1999). Factors in determining tiebreaker: in Gassner, Lang Lechner eds., Intertax, supra n.] MarriageIf an individual deemed married or have a joint household with a common-law partner leaves a country and leaves his or her spouse or common-law partner in that country, then the spouse shall constitute a tiebreaker. The same will apply to an individual who leaves a country with dependents. The resident shall be ruled in favor of the country where the individual has left his spouse or dependents. In case of a breakup with the spouse, the country shall no longer be considered as a tiebreaker.Social tiesResidency may also be determined where an individual in the country say X maintains mailing address of that country. Residency is also assumed where an individual maintains a post office address. It may also include a place where an individual maintains safety deposit box. It may a lso be assessed in a place where an individual uses personal stationery, such as business cards, showing the country's address, telephone listings, and local newspapers and magazine subscriptions of a country say Y. both countries should be in a treaty providing such ways of determining residence.Article 4(2) of the DTC states that an individual who possesses a green card is assumed a resident of the U.S. in regards to the DTC. Such a person shall be subjected to all treaty benefits for as long as the individual meets the conditions below. The first condition states that a person or individual shall have a permanent home or a habitual abode in the United States. The second condition states that the individual shall not be treated as a resident of another state other than the U.K., under any treaty touching the U.K. and another state.[See Vogel, K. (1997). Vogel's models on Double Tax...

A Machiavellian Analysis of Henry IV, Part 1 - Literature Essay Samples

It can be difficult for the modern reader to appreciate the power struggle underlying HENRY IV, Part 1 (1H4). As causes of the War of the Roses and the struggles of the House of Lancaster recede from memory, it is useful to have a lens through which to examine the political and military machinations of Henry, Harry and Hotspur as they struggle to define both the future of England and their personal claims to leadership. The Prince provides such a lens. Written in 1513, just 83 years before the play, Machiavellis tract on foreign policy and leadership provides a deeper understanding of the actions of these three characters. As the play opens, Westmorland informs Henry IV that he has received a post from Wales that is loaden with heavy news, Whose worst was that the noble Mortimer, Leading the men of Herefordshire to fightAgainst the irregular and wild Glendower, Was by the rude hands of that Welshman taken, A thousand of his people butcherÃÆ'Â ¨d, Upon whose dead corpse ther e was such misuse, Such beastly shameless transformationBy those Welshwomen done, as may not beWithout much shame retold or spoken of (1H4 1.1.37-46).This missive was followed by even more uneven and unwelcome news that Percy has followed his uncles teaching and to his own use he keeps all the prisoners except the Earl of Fife (1H4 1.1.70-75). In this way, Henrys enemies are introduced and Hotspurs loyalty called into question.The first step in applying a Machiavellian analysis to this situation is to determine whether the struggle pertains to a hereditary principate or a mixed principality. Given that the Welsh and Scottish forces remain distinct and separate groups over which the English retain limited control, one is inclined to characterize this as a mixed principality, an entity that is not entirely new but like a graft freshly joined to an old kingdom (Machiavelli 5). Following this analysis, the loyalties of the combatants appear conflicted at best because the problems assoc iated with such a state are derived from a natural difficulty which is that all men are ready to change masters in the hope of bettering themselves (Machiavelli 5). As the play opens, Hotspur and Worcester appear as exemplars of combatants who are struggling to change masters. Their loyalty to Henry conflicts with their loyalty to the Percy family.Under these circumstances, Machiavelli advises one of the best and most effective policies would be for the new possessor to go there and live (Machiavelli 6). While Henry remains firmly ensconced on the throne in London, both Hotspur and Harry venture forth in the world and engage in interactions that could conceivably achieve the benefit that Machiavelli says results from such relocation namely when you are on the spot, you can see troubles getting started and can take care of them right away (Machiavelli 7). Hotspur takes Worcesters advice to return to Scotland with the prisoners and Deliver them up without their ransom straight (1H4 1.3.257). Moreover, while he is in Scotland, he should enter negotiations and make the Douglas son your only mean / for powers in Scotland, which / will be easily granted (1H4 1.3.258-261).While not exactly the same as going and living there, these travels could serve much the same purpose as that imagined by Machiavelli in that they provide first-hand information. Unfortunately, Hotspurs temperament prevents him from making the most of such travels. Although the reader is not witness to Hotspurs negotiations with Douglas, the negotiations with Owen Glendower show that Hotspur is incapable of going and living there either literally or in the more metaphorical sense of being able to silence his own impulses long enough to learn first-hand Glendowers strengths as an ally. Instead of taking the opportunity to get a sense of the Welsh terrain and size up Glendower, Hotspur senselessly antagonizes him, insulting everything from his ability to speak English (1H4 3.1.114-117), his histor y of repelling Henry IV (1H4 3.1.65-67) and his magical powers (1H4 3.1.24-34). Curiously, although Harry neither relocates nor travels the distances traversed by Hotspur, his behavior seems to achieve more of the ends sought by the Machiavellian advice to go there and live there. We see him traveling a different kind of distance from the seat of power and playing an altogether different role with his companions at the Boars Head Tavern. Although only a temporary inhabitant of Eastcheap (1H4 39), his ability to step outside his customary role and observe life outside the palace makes him a more effective ruler in the long run. This is consistent with the Machiavellian adage that prince devote attention to learning because what he learns will be doubly useful; first he will become acquainted with his own land, and understand better how to defend it (Machiavelli 41). A Machiavellian analysis also sheds light upon the behavior of Henry, Harry and Hotspur during the Battle of Shrewsbu ry. Hotspurs allies betray him and leave him on the battlefield with little support. He continues to voice enthusiasm for battle despite Douglas characterization of the loss of Glendowers support as the worst tidings that I hear of yet (1H4 4.1.126). However, as he prepares for battle, Hotspur begins to vacillate. When Blount comes with gracious offers from the King (1H4 4.3.30), Hotspur explodes with his list of grievances against the king. However, at the end of this scene, he raises the possibility of accepting the kings offer, saying And maybe so we shall (4.3.112). Such vacillation opens him to the contempt and hatred warned against by Machiavelli who noted that what makes a prince contemptible is being considered changeable He should be sure that his judgment once passed is irrevocable (Machiavelli 50). In this time of crisis, Hotspur has not been able to win a popular base or exercise consistent judgment; had he survived, this vacillation (and his lack of reasoned responses) would hold him up to contempt and hatred. In holding out this opportunity for peace, Henry appreciates the Machiavellian maxim that military might is the poorest way to retain or win a mixed principality. Machiavelli notes that the whole state is harmed when the prince drags his army about with him from place to place. Everyone feels the inconveniences, every man becomes an enemy (Machiavelli 7). Blount tries to dissuade Hotspur, saying, you conjure from the breast of civil peace / such bold hostility, teaching his duteous land / audacious cruelty (1H4 4.3.43-45) and promises that you shall have your desires with interest / and pardon absolute for yourself (1H4 4.3.49-50). Henrys unexpected offer at reconciliation shows he understands that in the long run, defense by armies is useless with respect to mixed principalities (Machiavelli 7). While Hotspur and Henry weigh strategies and prospects for war, Harry goes into battle. His crisp, decisive actions are consistent with Machia vellis description of the military duties of the prince (Machiavelli 40). His victory over Hotspur shows that despite his questionable behavior earlier in the play, he has not fallen prey to the risk that being defenseless makes you contemptible (Machiavelli 41) or charges of mismanaging his clemency (Machiavelli 45). The Prince, therefore, provides an effective lens through which view the actions of Henry, Hotspur and Harry. Beginning with the characterization of the border skirmishes as a mixed principality, the relative strengths and weaknesses of these characters can be evaluated in Machiavellian terms. Only Harry appears to have metaphorically heeded the advice to go and live there. Despite his initial military successes, Hotspurs failure to heed this advice leaves him stranded without sufficient support at Shrewsbury. While Henry has the support of characters he spent time slumming with, Hotspur has shown himself to be worthy of hatred and contempt. In conclusion, The Prince provides a penetrating analytic tool to analyze the behavior of these characters, particularly with regard to their actions in Shrewsbury and its ultimate outcome.