: Bilateral agreements that determine which country has the primary right to tax specific types of income (e.g., dividends, interest, royalties).
: Countries tax income generated within their borders , regardless of the taxpayer's residence. Mitigating Double Taxation :
OECD Model Tax Convention : Favors capital-exporting (developed) countries. INTERNATIONAL TAXATION
International taxation involves the rules and principles governing how income, profits, and taxable activities are taxed when they cross national borders. The primary goal is to allocate taxing rights between countries fairly while preventing double taxation. Taxing Rights & Jurisdiction :
: Countries tax their residents on worldwide income , regardless of where it is earned. : Bilateral agreements that determine which country has
: Some countries use a territorial system , exempting certain foreign-source income from domestic tax entirely. Transfer Pricing :
: Requires transactions between related entities (e.g., a parent company and its foreign subsidiary) to be priced as if they were between independent parties to prevent profit shifting. Key Instruments & Models : Some countries use a territorial system ,
: An OECD-led initiative to close gaps in international tax rules that allow multinational enterprises to artificially shift profits to low or no-tax locations. International business | Internal Revenue Service