Dominique G.

Boursereau
Principles of Business Taxation

Dear Students :
You will find below the Summary of the most important points of the course with respect to the
first session.
(For your convenience the numbering of the paragraphs summarized has been kept the same as in
the outline of the course contained in the syllabus).
Please do not hesitate to contact me if you have any questions. My email address is:
dgboursereau@gmail.com
Best regards,
Dominique G. Boursereau

PRINCIPLES OF BUSINESS TAXATION

SUMMARY OF THE MOST IMPORTANT POINTS
SEQUENCE I
A) Different business forms
Branches are not legal entities in themselves.
Partnerships are not taxable entities; their earnings are taxed in the hands of the partners.
C) Conflicts of taxing jurisdictions
Residence vs. source of income are two opposite bases to claim taxing jurisdiction.
E) Residence of corporations
Some countries use the place of incorporation as the criterion of residence, others use the place of
effective management. In case of conflict, look at the relevant bilateral treaty.
F) Source of income
*Dividends: country of residence of the distributing corporation.
*Interest: generally, country of residence of the payor.
*Personal services: country where the services are performed.
*Royalties: country where the licensed intangible property (e.g. a software) is being used.
*Rentals: country where the leased tangible property (e.g. a computer) is being used.
*Gain from the sale of personal property (personal property is property that can be moved (e.g. a
computer) as opposed to real property (e.g. a building):
a) Tangible property
General rule: country of residence of the seller.
Exceptions: i) Sale of purchased inventory: country where the sale takes place, where title to the
goods passes. ii) Sale of produced personal property: generally, 50% in the country of production,
50% in the country of sale.
b) Intangible property
If the sales price is contingent upon the use and productivity (i.e. the income generated): country
where the intangible is being used. If not (e.g. if the sales price is a flat price):
country of residence of the seller.