Конституційно-правові академічні студії (Oct 2023)
Application of the MLI Convention as a means of ensuring the constitutional obligation to pay taxes
Abstract
The purpose of the article is to determine the consequences of the application of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (Multilateral Instrument (MLI) in Ukraine, to evaluate it as a platform for coordinating the tax policy of various states, and also to make proposals to improve such coordination. To achieve the outlined purpose and fulfill the set objectives in the research process, the following universal general scientific and special legal methods were used: dialectical, formal logical, formal legal, comparative legal, analysis and synthesis, and logical semantic. The article emphasizes the importance of combating tax abuse as one of the main directions of the government’s tax policy. It points out the need to support business and create a favorable investment climate on the one hand, and to counteract tax minimization strategies and the relocation of capital to low-tax jurisdictions on the other. It is noted that since business has crossed national borders, the coordination of the world community to harmonize tax policies of different states, their cooperation and interaction is necessary to solve the above problems. The main steps of the world community to coordinate their efforts to combat tax abuse are indicated. The leading role of the OECD in this process is noted, in particular with regard to the development of a model convention on the avoidance of double taxation, an initiative to combat harmful tax practices and, ultimately, an action plan on tax base erosion and profit shifting (BEPS). Considerable attention is focused on the MLI Convention as one of the main steps of the BEPS Plan. The article explains the purpose of the MLI Convention, which is to unify the rules for applying international tax conventions in terms of establishing taxation rules with respect to income taxes, to create an effective mechanism for implementing the agreed changes in a coordinated and efficient manner, according to which such agreements will fulfill the task of avoiding double taxation, but at the same time will not be an instrument for abuse, which creates opportunities for tax exemption or reduction of taxes through tax evasion. The author points to the provisions of the Convention limiting the application of benefits to dividend payment transactions and counteracting the abuse of the status of permanent establishments. Also, a critical assessment is given of the procedure for resolving tax disputes between residents of different countries provided for in the convention The study substantiates that the system of dispute resolution between taxpayers and competent authorities of different contractual jurisdictions as defined in the MLI Convention is not perfect, since it is not characterized by promptness of dispute consideration, and the system of determining arbitrators is unclear and not completely understood. The author proposes to establish an international tax arbitration court with clear rules of procedure and a professional panel of judges from among the most authoritative experts in the field of international tax law. To ensure effective and efficient coordination of states in the fight against tax abuse, taxation of TNCs, the digital economy and many other areas where global cooperation is needed, it is proposed to establish an international intergovernmental organization with delegation of part of the sovereign tax powers to it.
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