As the BEPS project and the Belt and Road Initiative proceed steadily, CUFE aims to push further the long-term cooperation with Vienna University of Economics (WU) to build a cross-disciplinary, cross-organization, cross-industry and cross-national platform of exchange on international tax treaty education and research, improve China’s research levels in international taxation, and cultivate international taxation talent with global perspectives.  Therefore, with the strategic support from the international cooperation department of CUFE,   the International Taxation Research Center and the Center for China Fiscal Development invited Karol Adam Dziwinski，Selina Siller and Andreas Langer from the International Tax Law Research Center of WU to teach the course on international taxation during the Elite Course on International Tax Treaty from May 7th to May 11th, 2018. The participants in this Course include undergraduate students, postgraduate students, PhD students, as well as young and middle-aged teachers from other universities. 

 In the Class

This is a five-day-long course taught in English. The theme of the course is about the clauses in the OECD model bilateral tax treaty and the application. The three teachers, based on their respective research expertise, elaborated on the contents and application cases regarding tax objects, tax categories, real estate and capital gains, affiliated enterprises in five days. The teaching was comprehensive and the cases abundant and interesting.

 The course began with real estate and capital gains, affiliated enterprises, copyright royalties, as well as two solutions against double taxation in the world: tax exemption and deduction, their relevant clauses and cases. The foreign teachers started the explanation with the 2017 OCED model treaty, and compared it with the 2010 model treaty. They spent more time on analyzing the newly added or revised clauses. The students not only learned about the basics and the application methods for tax treaties, but also grasped the trend of development and reforms of tax treaties. 

The second part of the course is case studies. The students applied the agreement clauses they had learned earlier to the cases. In the class, the students did independent research, and analyzed the cases, and then they brainstormed during the discussion. As a result, they have elevated their understanding and application skills on tax treaties. In the end, the foreign teachers explained the clauses and solutions that each case has applied, and the students found the learning process very fruitful. 

The third part of the course continues to expound on issues related to passive income in the tax treaties. The passive income includes dividends and bonus. The model treaty stipulates the authority to tax the passive income as follows “the dividends can be taxed in one side of the residence country, but this authority is not exclusive. The source country of the dividends also retains the taxing authority. If the company as the beneficiary of the dividends owns directly a minimum of 25% of the capital in the dividend paying company, then the tax rate is 5%, and it is 10% in other cases.” The foreign teachers also elucidated the rules on the income of the employees and the director’s fees. Three conditions must be met simultaneously  if an employee does not constitute the tax obligation in the labor country: in any given 12 months, his/her stay in the labor country does not exceed 183 days continuously or cumulatively; the compensation is not paid by the employer of the labor country; this compensation is not paid by the permanent establishment or fix base that the employer set in the labor country. 

At the end of the course, the foreign teachers analyzed the clause on the business profit, stating that only when the business activity in the other contracting state carried out by the company from the contracting state constitutes permanent establishment, the other side of the contracting state can impose tax, and can only tax the profit which belongs to the permanent establishment. At the same time, the foreign teachers talked briefly about the information exchange clause in the model treaty, and encouraged the students to contemplate on the issues that might occur in the practice.  

Every day when the class was over, the teachers from WU would carry out in-depth discussion with the teachers and students on OCED international tax treaties. In the process of further exchange, Karol Adam Dziwinski，Selina Siller，and Andreas Langer shared their insights about the issues related to their own research fields.

Group Photo of the Elite Course on International Tax Treaty

On May 11th, the Elite Course on International Tax Treaty came to an end. The researchers on international taxation and the students from relevant majors from inside and outside of CUFE have gained a lot from the training. The Center has built the platform of research exchange in CUFE’s international taxation education by re-introducing the international taxation research team from Vienna to carry out in-depth exchange with our students and teachers.