Course Description

Economic globalization is now more important for most countries than their separate economic reality. That is why international taxation is more often discussed today than most other taxes. Not only people and firms that pay tax to other countries need to know about international tax law. Stay-at-home taxpayers also need understand how this area of tax law affects their own tax burdens. Clever tax planning by internationally active firms often disappoints the expectations of their home countries’ tax collectors, and those countries must raise taxes on residents to make up for this.

It is possible to learn about these tax avoidance strategies without studying the tax law of any single country in detail. Income taxation is the kind of tax that creates opportunities for aggressive tax avoidance. The details of how income is taxed differ from one country to another, but an acquaintance with the basic pattern of income taxation is background enough for acquiring a strong basic knowledge of international tax rules.

This course provides an overview of the income taxation of cross-border transactions between the USA and Germany, a pattern of taxation that closely resembles that between each of these two countries and other countries. Every country that has an income tax must have rules for how the income tax applies to nonresidents of the country and, in some cases, how it applies to residents when they make income abroad. Countries in some cases enter into bilateral treaties with each other, changing the aspects of their default rules that might deter trade and other cross-border activities of their residents, both individuals and corporations. These tax treaties give residents of the treaty partners a choice between the treaty partners’ unilateral income tax laws and a simplified, less burdensome regime.

The course examines both aspects of the relevant tax law in Germany and US-American tax codes as well as in the Germany-US tax treaty. In order to bring this material to life, roughly half of the lecture series deals with hypothetical, and sometimes actual, cases that arise under these rules. It also focuses on unintended tax planning opportunities that these tax rules and the Germany-USA Double Tax Treaty provide. A comparison of the resulting bilateral tax regime of the two countries reveals many common features, even if the tax treaty is not taken into account. Both the unilateral and treaty aspects of US-American and German tax rules for cross-border business activity will be surveyed. The taxation by the USA and Germany of their residents’ economic activities abroad is also covered.

Course Type:

Practical language excercise / Lecture

Course Registration:

Please register via Campus Management, modules Fakultatives Lehrangebot im SB 3, Fakultatives Lehrangebot im SB 7, Fremdsprachenkompetens A or B

Frequency:

The course will be held in every summer semester. close