Tax Treaty Case Law around the Globe 2021
1. Aufl. 2022
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S. 30I. Introduction
The decision of 9 June 2020 deals with the question as to whether a person subject to tax on a limited (territorial) basis may be considered as a resident for tax treaty purposes.
The court has given a positive answer with respect to the former China (People‘s Rep.)-France Income Tax Treaty (1984) (hereafter the Treaty), that did not contain the “limited liability” restriction provided for by the second sentence of Article 4(1) of the OECD Income and Capital Model Convention since the 1977 update.
It is not clear whether the solution would be the same under the treaties following the OECD Model Convention as is the case of the new China (People‘s Rep.)-France Income Tax Treaty (2013) signed on and applicable with effect from 1 January 2015.
II. Facts of the Case
A French national living in Shanghai with his wife and children was subject to Chinese tax on his Chinese-sourced salaries only. His French-sourced investment income was exempt from Chinese tax under a temporary incentive scheme aimed at inward expatriates.
In 2013 and 2014, the taxpayer received French-sourced dividends that were subject to a 30% withholding tax in France. He claimed the benefit ...