The Curious Reform of Foreign Source Income

"The Tax Specialist", vol. 22, 2018, pp. 2-14.

Sydney Law School Research Paper No. 18/71

28 Pages Posted: 7 Nov 2018

See all articles by Graeme S. Cooper

Graeme S. Cooper

The University of Sydney Law School

Date Written: November 5, 2018

Abstract

Recently enacted measures which change the tax treatment of foreign source income seem to have been largely overlooked. They deserve greater attention because they produce curious and potentially illogical outcomes for many classes of Australian taxpayers. They are the unpublicised consequences of choices made in the design of Australia’s anti-hybrid rules, rules which were intended to curb the aggressive tax avoidance practices of multinational enterprises. Instead, they extend to many types of resident taxpayers earning some classes of foreign source income. This article demonstrates how entirely innocuous situations, which display no element of cross-border disagreement between countries, can be affected by these rules and how the impacts can be quite unexpected.

Keywords: income tax, international tax, OECD BEPS Project, tax avoidance, hybrid entities

JEL Classification: H20, H25, H26, K10, K30, K34

Suggested Citation

Cooper, Graeme S., The Curious Reform of Foreign Source Income (November 5, 2018). "The Tax Specialist", vol. 22, 2018, pp. 2-14.; Sydney Law School Research Paper No. 18/71. Available at SSRN: https://ssrn.com/abstract=3279140

Graeme S. Cooper (Contact Author)

The University of Sydney Law School ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia

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