This week we have four special guests from Copenhagen Business School who will be introducing and discussing their work in tax from three different fields of research. With thanks to Yvette Lind who has co-ordinated this group of speakers for what will be a very engaging discussion on tax but also three approaches to studying tax. We will begin an hour earlier than normal on Thursday October 29th at 16:00-17:00 London time and, as always, all are welcome to attend.

Updated information on this talk and other talks at the University of Cambridge can be found here.

SPEAKER BIOGRAPHIES

Karen Boll is Associate Professor at Copenhagen Business School. Karen conducts ethnographic and qualitative studies of tax authorities’ work, business’ tax compliance practices and collaborative tax regulation. Karen’s work has been innovative in seeing tax compliance as an assemblage of relations and actors, and groundbreaking in her access to studying tax administration in both Denmark and Sweden. Karen’s work on taxation has been published extensively in journals such as Journal of Organizational Ethnography, Nordic Tax Journal, Critical Perspectives on Accounting, Journal of Cultural Economy, Journal of Tax Administration and Accounting, Organizations and Society.

Yvette Lind is currently an Assistant professor in tax law at Copenhagen Business School (CBS Law). Swedish jur.dr. (JD) specializing in international taxation with an emphasis on challenges arising from globalization, increased taxpayer movement and the fragmentation of law. Awarded Swedish TOR/Skattenytt post-doc between 2017-2019 in connection to defending her doctoral thesis, facilitating specialising in EU state aid law in various fiscal contexts, e.g. tax avoidance and environmental taxation. Currently working on her taxation and democracy project in which she explores the effects of increased taxpayer mobility with reference to the allocation of not only taxation and access to (social) welfare benefits but also political rights and benefits such as voting privileges. Regular guest researcher and teacher at the Faculty of Law, Lund University.

Saila Stausholm is a doctoral student at Copenhagen Business School, currently finishing her dissertation on the International Political Economy of international taxation, through the Horizon 2020 project COFFERS “Combating Fiscal Fraud and Empowering Regulators”. Stausholms research spans different dimensions of the political economy of corporate taxation and exploits new datasources on hard-to-study phenomena.Her projects have identified the role of transnational professionals in offshore finance through mapping the geography of tax advisors and Big Four accounting firm employees, investigated the effectiveness of tax incentives in developing countries, and estimated the revenue impacts of a global reform of corporate taxation towards destination based cash flow taxation.

Leonard Seabrooke is interested in the micro-level elements that permit the macro composition of the international political economy and transnational governance. This includes: how professionals compete and coordinate to establish new regulations and new markets; the professional careers of those involved in international economic governance and transnational activism; generational conflicts between groups seeking to secure housing and financial assets within different national systems of residential capitalism; and conflict between groups over taxation and accounting issues. His work frequently draws upon analytical and methodological tools from political economy and economic sociology, including sequence analysis and social network analysis, among others.

To access the meeting, use this link

Or, if you email gevm2@cam.ac.uk, Guy will send you a link to this and all future meetings via Teams/Outlook Calendar.

Best wishes

May Hen-Smith and Guy Mulley

Co-convenors, Cambridge Tax Discussion Group

During this term we will meet fortnightly. For this week’s meeting we will be able to hear about tax research across the academic spectrum and from around the world. For information on upcoming and past meetings click on our “UPCOMING MEETINGS” tab.

We have five mini-presentations:

• Professor of Law Neil Buchanan, from the University of Florida, will be explaining how he chooses topics for scholarly writing, how theoretical research advances the conversation and how to deal with economics in tax analysis.

• Philip Baker QC, tax barrister and a visiting Professor, will be discussing the practising lawyer’s approach to academic tax law and the role of practicing lawyers who also engage in academic work, as well outlining his own journey into tax academia and some of his current research plans.

• Dr Amir Pichhadze, from the University of Oxford, will be bringing his international academic experience to bear on the subject of tax law teaching and research.

• Christina Allen, lecturer in law at Edith Cowan University in Perth, Australia, will be using her forthcoming tax project about definitions of wealth and income to illustrate the challenges of framing and narrowing a research question.

• Gabriel Nwodo, a Nigerian law graduate, will be articulating why he is returning to academic study, as a newly arrived LLM postgraduate student at the University of Cambridge.

As usual, there will be the opportunity for discussion and asking questions.

The one-hour meeting will be start at 5:00pm British Summer Time. If you would like a calendar invitation sent to you via Teams/Outlook, please email gevm2@cam.ac.uk . Otherwise, the link for the meeting is here:

https://teams.microsoft.com/l/meetup-join/19%3ameeting_MDRmNzY0NjctMTc5NS00OTA4LWE4ZWYtYTU5ZTI4MThmYTcw%40thread.v2/0?context=%7b%22Tid%22%3a%2249a50445-bdfa-4b79-ade3-547b4f3986e9%22%2c%22Oid%22%3a%22cce22f0f-bf2a-4e51-beb7-cf129dbab444%22%7d

We look forward to seeing you at the meeting.

Best wishes,

May Hen-Smith and Guy Mulley

Co-convenors, Cambridge Tax Discussion Group

Please join us online this week to engage with Dr. Peter Sloman of POLIS, University of Cambridge on Thursday September 17th, from 17:00-18:00 (BST) ONLINE (e-mail hmh46@cam.ac.uk or gevm2@cam.ac.uk for link).

Peter will be discussing the following topic: “Where’s the Money Coming From? How Tax and Spending Debates frame Electoral Politics”

Abstract: Tax and spending are central to democratic politics in the UK and elsewhere, but political scientists have paid surprisingly little attention to the practice of manifesto costings or the ways in which fiscal promises shape voting behaviour. This paper explores how British parties have used manifesto costings to frame prospective choices for voters since the 1950s, and develops a theoretical framework for understanding why warnings about ‘tax bombshells’ and ‘black holes’ in parties’ spending plans seem to be so powerful in Westminster democracies such as the UK. Whereas retrospective evaluations of economic performance can be difficult for governments to control, forward-looking fiscal debates are structurally weighed towards incumbent parties. Other constitutional structures may have very different implications for the role of public opinion in the tax policy-making process.

Peter Sloman is University Senior Lecturer in British Politics at POLIS and a Fellow of Churchill College. Before joining POLIS in 2015 he spent ten years in Oxford, where he was a student at Queen’s and a junior research fellow at New College.

Peter’s research focusses on political ideas, public policy, and electoral politics in modern Britain. His first book, The Liberal Party and the Economy, 1929-1964 (Oxford, 2015) explored how British Liberals engaged with economic thought in the era of John Maynard Keynes and William Beveridge. His second book, Transfer State (Oxford, 2019), examines how changing attitudes to work and social welfare have shaped the development of Universal Credit and the campaign for a universal basic income.

The Cambridge Tax Discussion Group is a PhD student run meeting group with weekly discussions of wide-ranging tax-related topics. We have been meeting weekly during term-time since 2015 and hope to continue with engaging topics that are tax or tangentially tax-related topics! We are friendly, open to all and interdisciplinary. We sincerely hope you will join us on our next online meeting which will be on Thursday 2 July at 17:00 (British Summer Time). See our “Meetings” page for updated talks, links and previous topics covered.

This week’s talk can also be found on talks.cam along with an assortment of university-wide talks: http://www.talks.cam.ac.uk/talk/index/149806

This week, Professor Henry Ordower, from Saint Louis University, will be discussing tax fairness in an international context, under the title: “Taxing Capital Appreciation for Fairer Taxation, Constitutions and a Comprehensive Tax Base”. Further details are below.

We look forward to seeing you on Thursday.

May Hen-Smith and Guy Mulley Co-convenors, Cambridge Tax Discussion Group

ABSTRACT

The presentation will start with a brief exploration of the realization question in the pending constitutional challenge to the peculiar US transition tax (IRC 965) and then contextualize the historical issue of realization and income and the comprehensive tax base. I will consider some of the justifications for a realization requirement and preferential treatment of capital gain and contrast them with some economic drawbacks to a realization-based system. The presentation will move to mark to market (with its trade-offs to overcome objections), the gradual abandonment of realization in the US and conclude by considering distributional fairness under a realization-based

BIOGRAPHY

Henry Ordower is Professor of Law at the Center for International and Comparative Law at Saint Louis University. His recent research has focussed on issues of tax distribution and the growing disparity of wealth between individuals. In addition to his academic research and teaching, he runs a tax consulting practice and he provides expert testimony in complex tax litigation matters. An avid traveller and linguist, Professor Ordower has visited more than 100 countries.

 

This week we have an exciting talk by Rasmus Christensen on the politics of tax governance. We sincerely hope you will join us online on Thursday, 18th of June at 15:00-16:00 (British Summer Time). See our “Meetings” page for updated talks, links and previous topics covered. Please e-mail May at hmh46@cam.ac.uk or Guy at gevm2@cam.ac.uk for link asssistance.

This week’s talk can also be found on talks.cam along with an assortment of university-wide talks: http://www.talks.cam.ac.uk/talk/index/149563

“The new politics of global tax governance: What the past tells us about the future of international taxation”

Abstract

The past decade has revealed that systemic change is underway in the foundations of global tax politics, entangled with changes in global politics at large. States are more aggressive in cracking down on tax havens, and cooperating more effectively through multilateralism. Global power is shifting towards large emerging markets. Media attention and focus on inequality has fueled unprecedented discontent with international tax rules. And the digital economy is ripping historical alliances apart, creating new battles lines in global tax negotiations.

Description: Based on a recently published paper (with Martin Hearson), in this talk I set out how these global trends indicate a radical departure from the stable past of international tax, and how they are shaping ongoing discussions to change the system, at the OECD and beyond. As the international tax system stands at a historical crossroads, finding new balances – on inclusiveness, coherence, and legitimacy – will be key to developing a sustainable international tax system for the future.

Rasmus Corlin Christensen is a political economist at Copenhagen Business School and a research associate at the International Centre for Tax and Development. His research focuses on processes of change in the politics and professional practice of international taxation. He has been recognized as an influential individual in the global tax world, being named to the International Tax Review´s “Global Tax 50” in 2017. You can find him at phdskat.org or @phdskat

The Cambridge Tax Discussion Group is a PhD student run meeting group with weekly discussions of wide-ranging tax-related topics. We have been meeting weekly during term-time since 2015 and hope to continue with engaging topics that are tax or tangentially tax-related topics! We are friendly, open to all and interdisciplinary. We sincerely hope you will join us on our next online meeting which will be on Thursday 11 June at 17:00 (British Summer Time). See our “Meetings” page for updated talks, links and previous topics covered.

This week’s talk can also be found on talks.cam along with an assortment of university-wide talks: http://www.talks.cam.ac.uk/talk/index/148804

This week, Dr Alexis Brassey, from the University of Cambridge, and Professor Henry Ordower, from Saint Louis University, will be discussing tax fairness in an international context, under the title “The Village Of Billionaires: An Examination Of The Paradox Of Relative Poverty”. Further details are below.

We look forward to seeing you on Thursday.

May Hen-Smith and Guy Mulley Co-convenors, Cambridge Tax Discussion Group

ABSTRACT

Tax justice and principles underpinning the international tax regime are in vogue. The idea that companies and individuals need to pay their “fair share”, not just in the domestic sense but also the international sense, is now a mainstream position. This paper explores the problems relating to what might constitute a “fair share” by setting out what is meant when this expression is used. A reasonable assumption is to consider taxation as the means by which the state funds public services and in some jurisdictions, contributes to greater equality within society. Those goals, however, give rise to competing claims. This is especially the case when considering international tax challenges, for example those faced by the OECD ’s 2019 work plan. This paper, in examining competing claims for tax revenues, considers the specic categories of relative as opposed to absolute poverty. If one accepts that taxation is to fund public services, the question arises, at least in international tax, which jurisdiction’s public services? If the motivation for raising tax is to tackle inequality, what has the greater claim, international inequality or national inequality? It is in answering these questions that we need to address the issue of which is more pressing, relative as opposed to absolute poverty? The contention in this paper is that there is a far stronger moral claim for tax to be redistributed on an international basis rather than on a nation basis. Further, this paper contends that purported moral claims which seek to address inequality within national borders are merely political demands made to further the economic interests of particular groups who themselves are amongst the most economically privileged, when viewed on an international spectrum. The article is designed for those progressive or communitarians who strongly advocate for redistribution within national boundaries. It is not designed to appeal to those of a libertarian perspective.

BIOGRAPHIES

Dr Alexis Brassey is a Solicitor and a Visiting Fellow of the Centre for Tax Law at the University of Cambridge. He holds an MA in Philosophy, an LLM in Corporate Law and a PhD in Psychology, as well as a PhD in Law. His research in Tax Law encompasses tax avoidance, constitutional law, tax fairness and jurisprudence. He has also worked in investment banking.

Henry Ordower is Professor of Law at the Center for International and Comparative Law at Saint Louis University. His recent research has focussed on issues of tax distribution and the growing disparity of wealth between individuals. In addition to his academic research and teaching, he runs a tax consulting practice and he provides expert testimony in complex tax litigation matters. An avid traveller and linguist, Professor Ordower has visited more than 100 countries.

This week we are leading with another excellent topic with leading tax expert, Professor Allison Christians, on the OECD’s Base Erosion and Profit Shifting, Pillar 1 project. This term, the Cambridge Tax Discussion Group will be going digital due to University closures. The online talk which is open to all, will take place Thursday June 4th at 9:00 EDT (2pm BST). E-mail hmh46@cam.ac.uk or gevm2@cam.ac.uk for link or find additional information on Cam Talks here: http://www.talks.cam.ac.uk/talk/index/148267

Abstract: The OECD continues its mandate to reallocate the global profits of certain digital economy firms for tax purposes. Combining the OECD’s own impact analysis with independent research, it is now possible to draw a very rough sketch of how Pillar 1 would accomplish this, and therefore to see how firms and nations are likely to fare under the OECD Secretariat’s preferred approach. Even so, it is not clear that there will be enough time for all Inclusive Framework members to move from rough sketch to policy certainty in time to make decisions about whether the Secretariat’s approach constitutes a mutually beneficial consensus. In this presentation I will walk through the technical specs of Pillar 1 with an example to demonstrate its policy implication

Refer to paper here

Biography

 

Our final presentation of the term was led by Cornel Marian, visiting researcher at the Lauterpacht Centre for International Law. Below is a brief description of the presentation for those of you who could not attend. 

Cornel Marian is a senior legal counsel, based in Stockholm (Sweden). His focus is on general corporate matters and disputes, including compliance and taxation matters. He is currently completing his PhD at the University of Frankfurt after obtaining his law degrees in the United States (J.D.) and Sweden (juristexamen)

“The Amsterdam Compensation case of the taxation of returning Holocaust survivors”

The Amsterdam compensation case follows the story of the 217 unveiled letters from returning Holocaust survivors who pleaded with the city to waive the delinquent payments arising from the time they were held in concentration camps. In 1947, the City of Amsterdam sought the input from the enforcement of authorities and a separate committee that both recommended the enforcement of the delinquent fees as it would create a faulty precedent. The final decision enforced these fees and was never appealed. The formal decision (Municipality Decision No. 518) addressed the issue in terms of the occupation of territory during the rule of a foreign power, which did not negate the obligation for the lessee to pay its dues on the property. The presentation discussed the findings, including the discrepancy of the nature of the fees and how they were commonly reported as ‘taxes’ in the media. Finally, the presentation addressed the silver lining of this entire story. In 2017, the city conducted a detailed report that prompted the compensation of ca. 10 MEUR to the surviving victims.

 

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Last week, Fa-Alpha Chen a PhD student reading law at the University of Cambridge, presented an overview of Alibaba. Below is a briefing of some of his discussion:

A Portrait of Alibaba – By Fa-Alpha Chen

This topic will give a brief introduction of Alibaba in the dimensions of corporate governance and IP.

1. The business units of Alibaba

Most people understand Alibaba as a platform involving E-commerce. However, Alibaba has already expanded its business in quite broad fields, covering digital finance (Alipay), cloud computing and big data (Alibaba Cloud), culture and entertainment (Youku, UC),Travel (Navi: Autonavi; Bicycle sharing: Hellobike),item delivery (Cainiao), etc.

Some of the business units were incubated from E-commerce, e.g. Alipay and Alibaba Cloud, while some were the outcome of acquisition of other companies, e.g. Youku and Autonavi, both of which were previously US-listed companies before going private to be private subsidiaries of Alibaba.

2. Alibaba Partnership

Even though Alibaba adopts the one-share-one-vote principle, the real controller of this company is not the largest shareholder. Instead, the Alibaba Partners as a whole is the actual controller.

When going public on NYSE, Alibaba (Stock Symbol: BABA) designed a unique framework above the board, namely, Alibaba Partnership, which in fact decides the operation of Alibaba. This partnership enjoys two special rights: one is the exclusive right to nominate directors, while the other relates to the allocation of bonus.

According to the articles of association, even though the director nominees should be appointed at the general meeting of shareholders, in case these nominees are denied by the general meeting of shareholders or leave the board after election regardless of the reason, Alibaba Partnership enjoys the right to appoint an interim director who serves until the following annual general meeting of shareholders. There is no limitation of such an appointment in terms of frequency, which means that as long as the nominees chosen by Alibaba Partnership are not elected by the general meeting of shareholders, this Partnership could appoint interim directors constantly. Such a stipulation results in an effect that Alibaba Partnership has the actual power to nominate directors, even though in the name of nominees or interim directors. Furthermore, pursuant to the articles, whenever the directors nominated (including the interim directors appointed) by Alibaba Partnership take up less than a majority of the total directors on board, Alibaba Partnership is empowered to appoint additional directors to the board at its sole discretion without any additional shareholder approval to ensure that the directors nominated or appointed by Alibaba Partnership could comprise a simple majority of the board. According to BABA’s recent annual report, there are eleven directors on the board currently, of which five are Alibaba Partnership nominees. Consequently, this Partnership is entitled to appoint two additional directors to increase its nominees to seven, occupying a simple majority of the thirteen directors in total.

Alibaba Partnership also determines the allocation of corporate bonus. The allocation of bonus,prima facie, is decided by the compensation committee according to its articles of association. However, the compensation committee is established by the board of directors. Since Alibaba Partnership controls at least a simple majority of the directors as discussed above, it determines the de facto allocation of bonus.

Several other stipulations in the articles of association make Alibaba Partnership unbreakable. Firstly, the election of partners is the own business of this Partnership. The number of partners is dynamic and new partners are elected annually. The election of new partners requires the approval of at least 75% of all the partners without the participation of shareholders. Secondly, Alibaba Partnership’s nomination rights and related provisions of the articles of association cannot be changed unless upon 95% of voting rights. Due to the agreement between Alibaba Partnership and the largest two shareholders of BABA named Softbank and Yahoo which hold approximately 30% and 15% of shares respectively, as well as the fact that the co-founders Jack Ma and Joseph C. Tsai jointly hold about 8% of the total shares, it is impossible for outsiders to collect 95% of voting rights to abolish this Partnership per seas well as its exclusive directors nomination right. Lastly, there is a bottom clause that where any change of control, merger or sale of BABA, Alibaba Partnership should not be transferred or otherwise delegated or given a proxy to any third-party with respect to the right to nominate directors.

3. IP Related Facet

Each year, Alibaba spends a lot of money to import movies, TV drama, music from overseas producers, e.g. Sherlock 4 from BBC. Since it relates to cross-border IP licence, the relevant protection via litigation against infringement is, in practice, a difficult problem in China.

Firstly, who has the right to initiate litigation? IP license could be conducted on either an exclusive or non-exclusive basis. The right to initiate and deal with litigation is another right other than Intellectual Property Rights. In order for Alibaba to file litigation, it should get relevant authorisation from overseas producers. The litigation could be filed in Alibaba’s own name or on behalf of both itself and the foreign producer, depending on the contract terms.

Secondly, all the documents (e.g. Letter of Authorisation) should be legalised through notarisation, e.g. A notary issues a certificate to certify that the Letter of Authorisation  between BBC and Alibaba is signed on his face and the signature is true. According to the Articles of Association of BBC, the person who signed the Letter of Authorisation has the right to do so. The Ministry of Justice needs to certify that the notary is qualified. Chinese authority needs to certify the certificate issued by the Ministry of Justice of the UK. All the documents need to be translated in Chinese by a qualified translator.

Lastly, the litigation will be quite time-consuming, and it is normal for such a litigation to last for 2-3 years to receive a final ruling from the court. Moreover, the compensation for the plaintiff is very low.