CONVENTIONS ON TAXATION OF INCOME: IMPLICATIONS FOR AVIATION OR SEA TRANSPORT EMPLOYEES
DOI:
https://doi.org/10.32782/2617-5940.1.2026.26Keywords:
tax convention, double taxation, crew members, Article 15(3) of the OECD MC, tax residentAbstract
To avoid the double taxation of employment income, employees on board an aircraft or ship engaged in international transport refer to the Article 15(3) of Conventions on the taxation of income and the prevention of fiscal evasion with respect to taxes on income and capital gains. However, the wording of Article 15(3) varies in different tax conventions. The question arises: what concepts of avoiding double taxation of income are used in the taxation of income of air or sea transport employees, and which of these concepts are the most convenient to implement from the point of view of these employees? The study compares the Article 15(3) in terms of the complexity of tax procedures and the assessment of the employee's time spent on the tax compliance. Research methods include the historical analysis of the development of tax treaties and comparative analysis of the prevention of double taxation of income of employees of international air or sea transport. In particular, Article 15(3) of the OECD Model Tax Convention and the bilateral conventions adopted between Ukraine and such countries as Ireland, Poland, Greece, Romania and Hungary are compared. The finding of the study is the identification of the following basic concepts of taxation of income of air and sea transport workers: • taxation of income only in the country of tax residence of the employee; • taxation of income in the country of tax residence of the employer; • taxation of income by both countries simultaneously. A matrix of tax actions of air or sea transport workers and a comparison of the time they need to spend on fulfilling their tax obligations was also formed. Our analysis confirms that the wording of Article 15(3) in the OECD Model Convention is optimal from the point of view of transport workers, as it entails the least time spent on fulfilling the tax legislation. However, current conventions often grant the right to tax the income of air and sea transport workers either to the country of tax residence of the employer, or to two countries simultaneously, therefore it is important to simplify tax procedures for workers.
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про уникнення подвійного оподаткування та попередження ухилень від сплати податків стосовно доходу і капіталу : Закон України від 21 жовтня 1997 р. № 586/97-ВР / Верховна Рада України. URL: https://zakon.rada.gov.ua/laws/show/642_002#Text
Kudla J., Kopczewska K., Stachowiak-Kudla M. Trade, investment and size inequalities between countries and the asymmetry in double taxation agreements. Economic Modelling. 2023. № 122. DOI: https://doi.org/10.1016/j.econmod.2023.106244 DOI: https://doi.org/10.1016/j.econmod.2023.106244
Navarro M. The digitalization of relations between citizens and tax administrations. Biosystems & Biorobotics. 2022. № 30. DOI: https://doi.org/10.1007/978-3-031-04305-5_20 DOI: https://doi.org/10.1007/978-3-031-04305-5_20
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Ormeño-Pérez R., Oats L. Implementing problematic tax regulation: Hysteresis and bureaucratic revolutionaries within tax administrations. The British Accounting Review. 2023. № 55(3). 101147. DOI: https://doi.org/10.1016/j.bar.2022.101147 DOI: https://doi.org/10.1016/j.bar.2022.101147
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Turina A. The progressive policy shift in the debate on the international tax challenges of the digital economy: A “Pretext” for overhaul of the international tax regime? Computer Law & Security Review. 2020. Vol. 36. 105382. DOI: https://doi.org/10.1016/j.clsr.2019.105382 DOI: https://doi.org/10.1016/j.clsr.2019.105382
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West A., Wilkinson B. What do we know about tax treaties and how can accounting research contribute? Journal of International Accounting, Auditing and Taxation. 2024. № 54. 100604. DOI: https://doi.org/10.1016/j.intaccaudtax.2024.100604 DOI: https://doi.org/10.1016/j.intaccaudtax.2024.100604
Yarotska T., Fedchuk S. Foreign income – problems of double taxation. International Journal of Innovative Technologies in Economy. 2018. № 8(20). P. 23-25. DOI: https://doi.org/10.31435/rsglobal_ijite DOI: https://doi.org/10.31435/rsglobal_ijite/30112018/6210
Zheng J., Bai S., Gu Ch., Huang B. et al. The role of anti-tax avoidance in tax base flow and international tax competition.
Pacific-Basin Finance Journal. 2024. № 84. 102309. DOI: https://doi.org/10.1016/j.pacfin.2024.102309 DOI: https://doi.org/10.1016/j.pacfin.2024.102309
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