Double tax agreements and the international allocation of business income in Australia

Increasingly, the effectiveness of the present system of taxation of international businesses is being questioned. The problem associated with the taxation of such businesses is twofold. A system of international taxation must be a fair and equitable system, distributing profits between the relevant jurisdictions and, in doing so, avoiding double taxation. At the same time, the prevention of fiscal evasion must be secured. In an attempt to achieve a fair and equitable system Australia adopts unilateral, bilateral and multilateral measures to avoid double taxation and restrict the avoidance of tax. The first step in ascertaining the international allocation of business income is to consider the taxation of business income according to domestic law, that is, the unilateral measures. The treatment of international business income under the Australian domestic law, that is, the Income Tax Assessment Act 1936 (Cth) and Income Tax Assessment Act 1997 (Cth), will depend on two concepts, first, whether the taxpayer is a resident of Australia and secondly, whether the income is sourced in Australia. After the taxation of business profits has been determined according to domestic law it is necessary to consider the applicability of the bilateral measures, that is, the Double Tax Agreements (DTAs) to which Australia is a party, as the DTAs will override the domestic law where there is any conflict. Australia is a party to 40 DTAs with another seven presently being negotiated. The preamble to Australia's DTAs provides that the purpose of such agreements is 'to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income'. Both purposes, for different reasons, are equally important. It has been said that: The taxpayer hopes the treaty will prevent the double taxation of his income; the tax gatherer hopes the treaty will prevent fiscal evasion; and the politician just hopes. The first purpose, the avoidance of double taxation, is achieved through the provision of rules whereby the Contracting States agree to the classification of income and the allocation of that income to a particular State. In this sense DTAs do not allocate jurisdiction to tax but rather provide an arrangement whereby the States agree to restrict their substantive law. The restriction is either through the non-taxing of the income or via the provision of a tax credit.

Business process variability modeling : A survey

It is common for organizations to maintain multiple variants of a given business process, such as multiple sales processes for different products or multiple bookkeeping processes for different countries. Conventional business process modeling languages do not explicitly support the representation of such families of process variants. This gap triggered significant research efforts over the past decade leading to an array of approaches to business process variability modeling. This survey examines existing approaches in this field based on a common set of criteria and illustrates their key concepts using a running example. The analysis shows that existing approaches are characterized by the fact that they extend a conventional process mod- eling language with constructs that make it able to capture customizable process models. A customizable process model represents a family of process variants in a way that each variant can be derived by adding or deleting fragments according to configuration parameters or according to a domain model. The survey puts into evidence an abundance of customizable process modeling languages, embodying a diverse set of con- structs. In contrast, there is comparatively little tool support for analyzing and constructing customizable process models, as well as a scarcity of empirical evaluations of languages in the field.

BoP and MNCs: where is the market and where the source of innovation?

ln 2004 Prahalad made managers aware of the great economic opportunity that the population at the BoP (Base of the Pyramid) could represent for business in the tom of new potential consumers. However, MNCs (Multi-National Corporations) have continued to fail in penetrating low income markets, arguably because applied strategies are often the same adopted at the top of the pyramid. Even in those few cases where products get re-envisioned, theie introduction in contexts of extreme poverty only induces new needs and develops new dependencies. At best the rearrangement of business models by MNCs has meant the realization of CSR (Corporate Social Responsibly) schemes that have validity from a marketing perspective, but still lack the crucial element of social embeddedness (London & Hart, 2004). Today the challenge is lo reach the lowest population tier with reinvented business models based on principles of value co-creation. Starting from a view of the potential consumer at the BoP as a ring of continuity in the value chain process – a resource that can itself produce value - this paper concludes proposing an alternative innovative approach to operate in developing markets that overturns the roles of MNCs and the BoP. The proposed perspective of ‘reversed' source of innovation and primary target market builds on two fundamental tenets: traditional knowledge is rich and greatly unexploded, and markets at the lop of the pyramid are saturated with unnecessary products / practices that have lost contact with the natural environment.

Development and validation of an instrument to measure organizational cultures' support of business process management

The purpose of Business Process Management (BPM) is to increase the efficiency and effectiveness of organizational processes through improvement and innovation. Despite a common understanding that culture is an important element in these efforts, there is a dearth of theoretical and empirical research on culture as a facilitator of successful BPM. We develop the BPM culture construct and propose a validated instrument with which to measure organizational cultures’ support of BPM. The operationalization of the BPM culture concept provides a theoretical foundation for future research and a tool to assist organizations in developing a cultural environment that supports successful BPM.

International corporate entrepreneurship among SMEs : a test of Stevenson's notion of entrepreneurial management

Geographical market expansion is included in various definitions of entrepreneurship as it entails the opening up of new markets (for example, Davidsson 2003). Expansion into new international markets and launch of new products in international markets are also consistent with definitions of entrepreneurship which center on the pursuit of opportunities {e.g.\Stevenson, 1983 #922;Gartner, 1993 #931}. Accordingly, the decision by managers of small, internationally active businesses to continue to internationalize can be viewed as an entrepreneurial act. In spite of the fact that both start-ups and existing firms can behave entrepreneurially by expanding into new international markets, the attention of entrepreneurship researchers interested in international activities has largely focused on international new ventures (INVs); that is, business organizations that internationalize from inception (Oviatt, and McDougall 1994; Oviatt, and McDougall 1997). Consequently, pursuit of international opportunities by established small and medium-sized enterprises (SMEs) lacks theoretical understanding and empirical investigation through an entrepreneurship lens. This paper contributes to the body of knowledge at the entrepreneurship-internationalization interface by testing whether Stevenson’s opportunity-based conceptualization of entrepreneurial management (Stevenson 1983; Stevenson and Gumpert 1985; Stevenson and Jarillo 1990) can explain the attainment of continued entrepreneurial outcomes by SMEs operating in foreign markets. We choose Stevenson’s conceptualization as it gauges firm-level characteristics that are theorized to facilitate the pursuit of entrepreneurial opportunities, which arguably is at the heart of SMEs’ continued venturing into international markets.

Capping them off! Exploring and explaining the patterns in undergraduate capstone subjects in Australian business schools

Universities are increasingly offering capstone subjects as part of curricula to prepare final year undergraduates for employment through consolidating and integrating their knowledge and skills while bridging the gap between academic learning and professional work. This study investigates capstone subjects offered by Australian business schools, drawing on national survey data collected in 2010-2011, complemented by interviews with associate deans teaching and learning instrumental in course and curricula design. Findings indicate the sector-wide use of capstone subjects in business disciplines, diversity in the patterns of offerings, and instances where subjects labelled as capstones do not meet the definition of capstones. We argue that these features are explained by a range of historic and strategic factors, such as the ad hoc development of subjects and a lack of understanding of the features of capstones. The findings of this paper inform the debate on the design, development, value and use of capstone subjects identifying the implications for staff development and knowledge management in higher education.

Culture in global business transformation projects : the discovery of a grounded theory

Presently organisations engage in what is termed as Global Business Transformation Projects [GBTPs], for consolidating, innovating, transforming and restructuring their processes and business strategies while undergoing fundamental change. Culture plays an important role in global business transformation projects as these involve people of different cultural backgrounds and span across countries, industries and disciplinary boundaries. Nevertheless, there is scant empirical research on how culture is conceptualised beyond national and organisational cultures but also on how culture is to be taken into account and dealt with within global business transformation projects. This research is situated in a business context and discovers a theory that aids in describing and dealing with culture. It draws on the lived experiences of thirty-two senior management practitioners, reporting on more than sixty-one global business transformation projects in which they were actively involved. The research method used is a qualitative and interpretive one and applies a grounded theory approach, with rich data generated through interviews. In addition, vignettes were developed to illustrate the derived theoretical models. The findings from this study contribute to knowledge in multiple ways. First, it provides a holistic account of global business transformation projects that describe the construct of culture by the elements of culture types, cultural differences and cultural diversity. A typology of culture types has been developed which enlarges the view of culture beyond national and organisational culture including an industry culture, professional service firm culture and 'theme' culture. The amalgamation of the culture types instantiated in a global business transformation project compromises its project culture. Second, the empirically grounded process for managing culture in global business transformation projects integrates the stages of recognition, understanding and management as well as the enablement providing a roadmap for dealing with culture in global business transformation projects. Third, this study identified contextual variables to global business transformation projects, which provide the means of describing the environment global business transformation projects are situated, influence the construct of culture and inform the process for managing culture. Fourth, the contribution to the research method is the positioning of interview research as a strategy for data generation and the detailed documentation applying grounded theory to discover theory.

ACE research vignette 025 : Is business planning important for entrepreneurial success?

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. This vignette, written by Professor Per Davidsson, takes a closer look at the value of business planning.

On facilitating regional integration and economic development with collaborative technologies in the South Pacific

The current global economic instability and the vulnerability of small island nations are providing the impetus for greater integration between the countries of the South Pacific region. This exercise is critical for their survival in today’s turbulent economic environment. Past efforts of regional integration in the South Pacific have not been very successful. Reasons attributed to this outcome include issues related to damage of sovereignty, and lack of a shared integration infrastructure. Today, the IT resources with collaborative capacities provide the opportunity to develop a shared IT infrastructure to facilitate integration in the South Pacific. In an attempt to develop a model of regional integration with an IT-backed infrastructure, we identify and report on the antecedents of the current stage of regional integration, and the stakeholders’ perceived benefits of an IT resources backed regional integration in the South Pacific. Employing a case study based approach, the study finds that while most stakeholders were positive about the potential of IT-backed regional integration, significant challenges exist that hinder the realisation of this model. The study finds that facilitating IT-backed regional integration requires enabling IT infrastructure, equitable IT development in the region, greater awareness on the potential of the modern IT resources, market liberalisation of the information and telecommunications sector and greater political support for IT initiatives.

Design LED innovation to rejuvenate local food systems and healthy communities : an emerging research agenda

Food Sovereignty (food freedom) is about empowering people to develop their own local food system. Food Sovereignty challenges designers to enable people to innovate the local food system, rather than having a food system which is dictated by corporate interests and failed business ethics. Communities are realising the potential for design to assist in the innovation process, and add strategic value to potentially localise the food system. Design Led Innovation (DLI) offers a strategic framework to address large-scale cultural, systemic and economic changes. The DLI approach empowers communities to take organised action to achieve a healthy, prosperous and happy way of life. DLI can assist with business models in the business world and it is evident this approach can assist with creating social change too. This paper presents on an emerging research agenda aimed to assist designer’s focus from individuals and systems to communities and urban problems. This paper also presents the research proposition that DLI and service design coupled with social entrepreneurial ventures such as local food projects and creative community inventions, have the potential to enable social innovation for healthy and happy communities.

Cost-aware business process management: A research agenda

Organisations are constantly seeking cost-effective improvements for their business processes. Business process management (BPM) provides organisations with a range of methods, techniques and tools for analysing, managing, and optimising their business operations. However, BPM initiatives within organisations tend to focus on investigating time and resource utilisation inefficiencies, rather than directly on cost inefficiencies. As a result, high-level cost-based managerial decisions are still being made separately from process related decisions. This position paper describes a research agenda that envisages a holistic approach to managing the cost of business operations in a structured manner, by making an explicit link between cost and processes in all phases of the business process management life cycle. We discuss a number of research challenges that need to be addressed in order to realise such an approach as well as findings from some of the initial research outcomes. It is envisioned that the research outcomes will enable organisations to make operational and strategic decisions with confidence based on accurate and real-time cost information about their operations.

Teaching design thinking and design led innovation to non-designers : a tertiary facilitator multidisciplinary study

This paper aims to address the knowledge gap in regards to the potential intermediary role tertiary institutions can play in developing generic design thinking/design led innovation capabilities in non-designers. Specifically, it investigates the value derived from the contribution of postgraduate design students as facilitators/educators for undergraduate non-design student cohorts. It examines a design immersion workshop designed to encourage the use of design thinking capabilities for project brief development for undergraduate multi-disciplinary student teams involved in a community service learning project for a social enterprise. The workshop was facilitated by design led innovation masters students embedded in industry organisations to research the integration of design led innovation capabilities in business. Data was collected from participating non-design students and postgraduate facilitators’ in the form of reflective journals and semi-structured interviews. The thematic analysis provided insight into the value of design thinking/design led innovation immersion programs for both the postgraduate facilitators and the undergraduate non-design students. The research results will inform a tentative foundation prototype framework to allow for ongoing program developments and research in design thinking/design led innovation integration in higher education, facilitating the development of generic capabilities required to empower future generations for business innovation and active citizenship in the 21st century knowledge economy.

Early challenges of shifting an Australian manufacturer’s utilisation of design

This paper presents the findings from the initial exploration phase of an 11 month project, identifying the early challenges that a design innovation catalyst faces while initiating a shift in the way a medium sized manufacturing firm utilises design. Ultimately, the overarching aims of the project are to transform the utilisation of design within the participating company from a styling tool to a strategic process through the implementation of a design led approach to innovation. Insights were found through qualitative interviews with company staff and reflective journal entries as part of an Action Research methodology. Challenges identified include managing expectations, conveying the potential of a design innovation catalyst and a design led approach to innovation, and a siloed and risk averse culture. Findings presented in this paper will assist in identifying and understanding the preliminary challenges encountered by a design innovation catalyst when embarking on a design led transformation. Future innovation catalysts can prepare for possible barriers by highlighting considerations, opportunities and challenges when embarking on a design led transformation. Implications of this research are provided as possible approaches to overcoming these challenges.

From production to purpose : using design led innovation to Build Strategic Potential in a Family-Owned SME

There is an evident need to develop the strategic capabilities of companies from within, to ensure competitive competence in a time where strategy is a necessity. This paper is based on the first 4 months of a longitudinal embedded case study of a family-owned Australian small to medium enterprise, in their journey towards design integration. The first author was embedded as a ‘Design Innovation Catalyst’ to collaborate on overcoming early barriers of strategic development, using design led innovation. Action research methodology, semi-structured interviews with seven out of eight employees and a reflective journal revealed the absence of a shared vision, conflicting drivers and a focus on operational efficiency rather than strategy. Through the Catalyst’s facilitation, a company vision, general awareness, practice and knowledge in strategic development have emerged as the first steps to generating strategic design competence within the firm.