Principles Of International Taxation

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I. What is International taxation? International Taxation refers to the global tax rules that apply to transactions between two or more countries in the world. It encompasses all tax issues arising under a country’s income tax laws that include some foreign element. Taxes are not international; there is no separate global tax law that governs cross border transactions. Moreover there is no international tax court or administrative body for it. All taxes are levied under their domestic law by federal, national or local governments international taxation governs these domestic tax rules under customary international law and treaties . The principles of international taxation are influenced by tax equity and tax neutrality within the national…show more content…
The incentives for tax authorities to respond to the actions of other tax authorities in connection with the international tax treatment. These incentives are clearly reflected in the existence of tax havens, a feature of some potential importance for multinational enterprises. There are constant actions on the part of taxpayers to reduce their tax burden. The use of the term tax haven has by itself created considerable confusion and, consequently, contributed to a misunderstanding of the basic problem. The word ‘haven’ means harbour and thus, figuratively, refuge or place of safe retirement , ‘Tax haven’ would then indicate a place to which one goes, or which one uses, in order to avoid. Tax havens are typically very small communities with independent tax authorities who have come to realize that by charging little or no tax on transactions within their jurisdiction, a potential is created for substantial financial flows through their country with beneficial effects. Each transaction tends to receive preferential tax treatment relative to a major industrialized economy. It is not sufficient that a favourable tax treatment alone exists, a stable political and social climate is also…show more content…
This means that there are agreed rates of tax and jurisdiction on specified types of income arising in a country to a tax resident of another country. Under the Income Tax Act 1961 of India, there are two provisions, Section 90 and Section 91, which provide specific relief to taxpayers to savethem from double taxation. Section 90 is for taxpayers who have paid the tax to a country with which India has signed DTAA, while Section 91 provides relief to tax payers who have paid tax to a country with which India has not signed a DTAA. Thus, India gives relief to both kind of

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