International Taxation May 2026

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 :

: Designed to prevent taxpayers from deferring tax on mobile income by shifting it to foreign "controlled" corporations.

UN Model Tax Convention : Provides more taxing rights to "source" (developing) countries. : INTERNATIONAL TAXATION

: Countries tax their residents on worldwide income , regardless of where it is earned.

: Allow taxpayers to reduce their domestic tax liability by the amount of taxes paid to a foreign government. UN Model Tax Convention : Provides more taxing

: Some countries use a territorial system , exempting certain foreign-source income from domestic tax entirely. Transfer Pricing :

: 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 : Some countries use a territorial system ,

OECD Model Tax Convention : Favors capital-exporting (developed) countries.