What background do I need to be an international tax advisor?
Talking to a friend of mine, the issue of economics/accounting background vs legal background surfaced with regards to working and practicing tax.
My comments were based on my short experience of working as a tax advisor and more specifically from an international tax perspective. In my view an accounting background is not essential to be a good tax advisor. It can truly help but.... You can be a great tax advisor even if you don't have an accounting degree. Just think of prominent tax practitioners, judges, tax officials involved in taxation, who lack accounting background. For those who do have accounting background I think that certain issues will be more easily reachable than others. In my opinion, the more we slide from a purely domestic tax environment to a more international framework, the more legal the work starts to become. That gives an advantage, an edge, for persons with a legal background to navigate through complex and sometimes intricate laws. An edge that is reflected in the legal framework of international tax (vide. OECD Model and Commentaries). You just need to read the first lines to understand that the legislator had a legal background. And who best than a person with similar background to understand the views, thoughts and even mistakes of the legislator? Secondly tax is not all about preparing tax returns! It does not start there and it does not end there!
I know that these are only small flashes on a wider discussion. But the issue is there and a good example of how to confront this issue is for example how the Netherlands and Italy introduced specific university courses on tax, which combine legal, accounting and economic backgrounds. No wonder that in my class of LL.M the best students where Italian and their background was hybrid. Confused? Don’t be, because I still think that a legal background is fundamental to work in international tax .
My comments were based on my short experience of working as a tax advisor and more specifically from an international tax perspective. In my view an accounting background is not essential to be a good tax advisor. It can truly help but.... You can be a great tax advisor even if you don't have an accounting degree. Just think of prominent tax practitioners, judges, tax officials involved in taxation, who lack accounting background. For those who do have accounting background I think that certain issues will be more easily reachable than others. In my opinion, the more we slide from a purely domestic tax environment to a more international framework, the more legal the work starts to become. That gives an advantage, an edge, for persons with a legal background to navigate through complex and sometimes intricate laws. An edge that is reflected in the legal framework of international tax (vide. OECD Model and Commentaries). You just need to read the first lines to understand that the legislator had a legal background. And who best than a person with similar background to understand the views, thoughts and even mistakes of the legislator? Secondly tax is not all about preparing tax returns! It does not start there and it does not end there!
I know that these are only small flashes on a wider discussion. But the issue is there and a good example of how to confront this issue is for example how the Netherlands and Italy introduced specific university courses on tax, which combine legal, accounting and economic backgrounds. No wonder that in my class of LL.M the best students where Italian and their background was hybrid. Confused? Don’t be, because I still think that a legal background is fundamental to work in international tax .
posted by Talk Tax Blog at 9:44 am
2 Comments:
Tiago I do not fully agree with your opinion. I have an economic background and I never fealt that that was making my life more difficult in dealing with international tax issues. In fact, I can say that issues like for example transfer pricing (perhaps the future of international taxation) are better undertood by economists than by lawyers. Did you forgot that point?
Alessandro
My dear Alessandro,
First, let me tell you that you are free to disagree with me. I never told with regard to this issue that my opinion is the right one. In fact, I really think there is no right answer because it always depends on the particular circumstances.
Secondly, thank you for remembering me about the transfer pricing issue. This is an issue that is very dear to me because when in 2001 the Portuguese tax authorities introduced transfer pricing I was one of the small guys who had to study the ins and outs of the transfer pricing guidelines. And I did it. I felt comfortable with it because I was reading them from a legal perspective. I was interpreting them as I would interpret a law. Later on, I must recognize that I learnt (a bit) of the economical perspective of transfer pricing and then I understood that or you (as a lawyer) dedicate full time on the economical aspects that underlie any transfer pricing issue or you are doomed to be a second rated expert. So I did, I said to myself “leave transfer pricing to the ones that can handle the issue”. I say this, irrespective of their background, because I could name you experts like Monique van Herksen that have a legal background and work (in her case lead a team) of transfer pricing experts.
But, fortunately for ones and unfortunately for others transfer pricing is not the only area of international tax. You even say it is the future. I could answer that if the EU implemented some of its most daring tax proposals (fractional apportionment) I would say that transfer pricing as you see it in Europe would be at risk. But that is another issue, which I hope to come back in future posts. With regards to the discussion that led us here, I would say that your point is taken. But it is taken with cauition!
Ciao,
Tiago
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