Tax Treaty Case Law around the Globe 2018
1. Aufl. 2019
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S. 325Chapter 27 United Kingdom: R (OAO Aozora GMAC Investment Limited) v. HMRC
Philip Baker
27.1. Introduction
This case from the United Kingdom brings together issues relating to foreign tax credits (both bilateral credits under tax treaties and unilateral credits under domestic law), limitation-on-benefits (LOB) rules and anti-avoidance measures.
The case has a slightly unusual name: R (OAO Aozora GMAC Investment Limited) v. HMRC. R or Regina is the Crown, and OAO stands for “on the application of”. You can tell from that peculiar name that it is a judicial review case; it is an administrative law case before the Administrative Court. The Crown oversees the administration of the law in the country and so the Queen lends her name to all administrative actions. Aozora is a company, and has applied for judicial review; so it is on the application of this company that the judicial review is brought.
27.2. Facts of the case
The facts of this case are very straightforward. We have a Japanese bank that established a wholly owned subsidiary in the United Kingdom that in turn had a wholly owned subsidiary in the United States. The UK company lent money to the US company and the US company paid inter...