Domestic Policies on Negotiating Tax Treaties

Abstract

Since the beginning of the twentieth century, there has been an exponential growth in cross-border trade and investment, resulting today in a highly integrated, mobile and complex global economy. All countries are involved in international trade and investment, whether it is cross-border trade in goods or services, foreign investment, transfer of technology or movement of workers. All countries, whether developed or developing, require rules to address the ever-increasing number of international tax issues that arise from such activities. Differences in the domestic tax law criteria used to determine residence for tax purposes mean that individuals and legal entities that have links to more than one country may be regarded as tax residents of more than one country, and hence liable to tax on their worldwide income or capital in more 1 Department of International Economic and Social Affairs, Manual for the Negotiation of Bilateral Tax Treaties Between Developed and Developing Countries, United Nations Publications, New York, 1979. than one country.1 This has implications for taxation, therefore negotiation of tax treaties is crucial towards advancing international tax cooperation through which to secure domestic resource mobilisation (DRM). DRM is central to achieving sustainable development. Taxes represent a stable source of finance which when complemented by other sources, is critical to financing Agenda 2030 on Sustainable Development...