Liability to Tax and Treaty Benefits

The question of whether or not an entity is 'liable to tax' for the purposes of treaty relief is not obvious in all cases and can be the subject of debate, including debate between taxing authorities. The term is not concerned with tax actually paid, but with being within the remit of the tax system. Where exemptions are very generous for certain entities, it has been argued that in these cases their liability to tax effectively ceases and treaty relief could be denied. With a global focus on perceived tax avoidance, this is an area of increasing attention. [PUBLICATION ABSTRACT]