Module LAW3301: TAX LAW

Department: Law

LAW3301: TAX LAW

Prerequisites

• Legal Skills (LAW 1041); EU Constitutional Law (LAW 1061); UK Constitutional Law (LAW 1091).

Corequisites

• None.

Excluded Combination of Modules

• None.

Aims

• The aim of this course will be to provide a platform for research into the specialized aspects of tax law and policy. Its objective is to familiarise students with the basic principles of national and European tax law and policy from a multidisciplinary perspective. Students will be encouraged to engage with various tax law sources, namely international treaties, official documentation from Governmental, non-Governmental and European institutions, literature, and case law from the EU Court of Justice and UK courts. The course will be divided into three parts. In the first part, the objective will be to provide a general overview of taxation matters. Particular consideration will thereby be given to traditional taxes, such as personal income tax, corporate income tax, and VAT; as well as new taxes, part of emerging trends within taxation, such as environmental taxes, and financial transactions taxes. Basic taxation principles such as the principle of ability to pay, the principle of non-retroactivity of tax, and the principle of legal certainty and legitimate expectations, will also be discussed. In the second part of the module, attention will focus on taxation of consumption – known as indirect taxation – particularly to VAT, as the main general tax on consumption. The UK VAT system, and the EU VAT system on which it is based, will be discussed. Particular emphasis will be given to the relationship between national VAT systems and EU VAT legislation and case-law; as well as problematic areas of the tax, such as the rate structure, and exemptions; the phenomena of VAT planning, avoidance and fraud will also be analysed in detailed. The third and final part of will focus upon the taxation of income – what is known as direct taxation. Particular emphasis will be given to the issue of national tax sovereignty, namely in the context of the jurisprudence of the EU Court of Justice; the basic principles for income taxation, in particular taxation at residence and source; as well as problematic areas of taxation of corporate income, such as tax competition, international profit shifting, thin capitalisation, transfer pricing and the role of tax havens.

Content

• The course will highlight relevant and topical issues and expose underlying legal and economic principles. The following themes will be explored:
• 1. Fundamental taxation principles:
• a. National tax structures: traditional taxes and emerging trend;
• b. Tax law principles: traditional principles such as ability to pay, non-retroactivity, legal certainty and legitimate expectations; new trends, such as general principles of EU law, human rights, and unjust enrichment.
• 2. Taxing consumption:
• a. Overview of the UK VAT system: the European VAT experience, history, reasons for its introduction and popularity; interaction between EU and national VAT systems, harmonising legislation, and the role of the EU Court of Justice;
• b. UK VAT rate structure: rationale for reduced rates, legal and economic difficulties caused by reduced rates, policy ideal vs. politically achievable rate structure;
• c. UK VAT exemptions: merit exemptions and public services vs. technical exemptions, gambling, and immovable property; financial services exemption and under-taxation of financial sector, taxing financial institutions;
• d. UK VAT planning, avoidance and fraud: distinguishing between the three phenomena, what is avoidance and what is acceptable planning, connection between avoidance and tax legal design; VAT fraud, quantification and types, methods of combating it, connection between fraud and legal design.
• 3. Taxing income:
• a. UK income taxes: national tax sovereignty, EU harmonising legislation, fundamental freedoms and the role of the EU Court of Justice;
• b. Principles of UK income taxes: tax bases and tax rates, proportionality, progressivity; allocation of taxing powers, principles of residence and source;
• c. Problematic areas of UK corporate tax: debt vs equity conundrum, and thin capitalisation rules; international dynamics, tax competition, and Delaware effect;
• d. International corporate tax avoidance: international profit shifting, control foreign companies (CFC) rules, and transfer pricing rules; tax havens, and exchange of information agreements.
• Each theme will be deal with by reference to official documentation from Governmental non-Governmental and European institutions, literature, and case law from the EU Court of Justice and UK courts.

Learning Outcomes

• On completion of the module students will be able to
• Understand the basic structure, features and fundamental characteristics of national tax systems
• Identify traditional and emerging trends within the design of tax structures
• Identify traditional tax principles, and understand their rationale, as well as the growing influence of non-tax legal principles on tax law
• Understand the role and influence of EU institutions within the specific features of domestic tax systems at both direct and indirect tax law levels
• Evaluate and critically assess from a legal, as well as economic perspective, key aspects of the UK VAT system, and the EU VAT system upon which it is based
• Evaluate and critically assess from a legal, as well as economic perspective, the key challenges facing corporate income tax systems worldwide, including the UK corporate tax system

• On completion of the module students will be able to
• Employ the acquired knowledge to hypothetical situations concerning tax law
• Identify the key concepts, key national and EU legislation, case law and literature on taxation
• Use concepts from economics literature to evaluate tax law design
• Identify the fundamental principles and key challenges to UK tax law
• Understand how both principles and challenges are reflected and deal with in the design of European and domestic tax legislation
• Critically assess the restrains and limitations of tax law design and its consequences from both a legal and economic perspectives

• On completion of the module students will be able to
• Demonstrate developed research and writing skills, including the ability to work independently
• Ability to construct written arguments and think critically about tax law matters
• Ability to carry out research and solve practical questions on tax law issues using a wide range of sources, namely official documentation, case-law and literature

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

• The modes of teaching, learning and assessment have been chosen in order to facilitate the achievement of the learning outcomes of the module;
• Seminars will concentrate on developing students' knowledge of the subject area and introducing students to the relevant critical, analytical and evaluative skills;
• The modes of assessment will encourage independent learning and research skills and will examine students' ability to meet the learning outcomes of the module.

Teaching Methods and Learning Hours

Summative Assessment

Formative Assessment:

One 1,500 word essay.

■ Attendance at all activities marked with this symbol will be monitored. Students who fail to attend these activities, or to complete the summative or formative assessment specified above, will be subject to the procedures defined in the University's General Regulation V, and may be required to leave the University