Caplin & Drysdale Summer Associate Amanda Leon Wins Major Writing Competition

University of Virginia School of Law
Awards & Rankings

Amanda LeonA former CPA, third-year law student and former Caplin & Drysdale Summer Associate Amanda Leon won first place in the International Fiscal Association USA Branch 2016 Writing Competition.  The paper, “If the Commission ‘LOBs’ a Pitch to the ECJ, Will It Strike Out Again?,” looks at a 2015 European Commission infringement action against the Netherlands and explains how a potential court case stemming from that action could have a major impact on international tax law – specifically the enforcement of limitation-of benefits clauses, or LOBs.

LOBs are a common safeguard in international tax agreements, and primarily exist to prevent so-called "treaty shopping." An example of shopping would be when a company has headquarters in one country, draws income from a second "source" country with which there is a treaty (often featuring a reduced tax rate as a partnering incentive), then forms a corporation in a third country, transfers its stock and reaps more favorable tax benefits there.

But with limitations in place, a business is obligated to pay taxes to the source country from which it is reaping profits.

"The United States, India and Japan place tremendous value on these provisions because they effectively combat abusive treaty shopping," Ms. Leon writes in her paper, noting that the 2016 U.S. Model Income Tax Convention refers to LOBs as "a fundamental pillar of U.S. tax treaty policy for over two decades."

Ms. Leon says if LOBs were no longer applicable in EU deals, the EU member state would lose revenue until it could renegotiate its treaties to either eliminate the LOB (which the United States would not accept) or to devise an EU-compliant LOB. Multinational businesses would also face much uncertainty.

"If the ECJ finds the LOB provisions in the Netherlands-Japan bilateral tax treaty to be incompatible with EU law, member states would be forced to renegotiate countless treaties, all whilst becoming less attractive negotiation partners," she writes.

After graduation, Ms. Leon will work for Caplin & Drysdale as a tax associate with the firm. She holds a bachelor of business administration degree in accountancy and political science from the University of Notre Dame.

To view the full article discussing Amanda’s win, please visit the University of Virginia School of Law’s website.

Excerpt taken from the article “3L Amanda Leon’s International Tax Law Paper Wins Major Writing Competition by Eric Williamson for the University of Virginia School of Law.


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