INTERNATIONAL TAXATION –
QUESTIONS AND THEIR EXPECTED
ANSWERS
The OECD tax convention provides a bilateral model,
is a multilateral convention on double taxation
feasible/allowed in the current international scenario?
Yes
The Model Convention main objectives are to avoid
double taxation and to prevent fiscal evasion, indicate
in the list below other possible objectives:
- Certainty of Tax Treatment to investors
- Exchange of information
- To promote investment & Mutual Relation
- Tax Credit/Relief
- Prevent Tax Discrimination
- Allocating Taxing Jurisdiction
- Easing in Recovery of Tax Dues
To what type of taxes does the Model Convention
apply?
- On business income
- on capital
- real estate
- Shipping and air transport
The value of the Protocol annex to the Conventions:
It is an integral part of the treaty, binding for the
contracting States
, What are the main characteristics of the multinational
enterprise "full-fledged business model"?
Is an enterprise with a relatively higher level of functions
and risks in each business unit
What are the main characteristics of the multinational
enterprise "principal business model?"
- Is an enterprise with relatively lower level of commercial
functions and risks (e.g. limited risk distributors (LRD),
commissionaires, etc.)
- Is an enterprise with a company leading the
manufacturing operations through which toll manufacturing
agreements and/or contract manufacturing agreements
and distributing the goods with low risk commercial
business units
Difference between the contract manufacturing
agreement and the toll manufacturing agreement,
mark the truer assertions:
- A service fee represents the toll manufacturer
remuneration
- Both the contract and the toll manufacturer role has a
relatively lower risk profile
Difference between the limited risk distributor (LRD)
and the commissionaire, mark the truer assertions:
- The commissionaire sells the goods on behalf of the
principal company
- The commissionaire cannot own the goods to be sold
- The LRD purchases and resells the finished products to
the clients
Define the "juridical" double taxation
"the imposition of comparable taxes in 2 or more states on
the same tax payer"
QUESTIONS AND THEIR EXPECTED
ANSWERS
The OECD tax convention provides a bilateral model,
is a multilateral convention on double taxation
feasible/allowed in the current international scenario?
Yes
The Model Convention main objectives are to avoid
double taxation and to prevent fiscal evasion, indicate
in the list below other possible objectives:
- Certainty of Tax Treatment to investors
- Exchange of information
- To promote investment & Mutual Relation
- Tax Credit/Relief
- Prevent Tax Discrimination
- Allocating Taxing Jurisdiction
- Easing in Recovery of Tax Dues
To what type of taxes does the Model Convention
apply?
- On business income
- on capital
- real estate
- Shipping and air transport
The value of the Protocol annex to the Conventions:
It is an integral part of the treaty, binding for the
contracting States
, What are the main characteristics of the multinational
enterprise "full-fledged business model"?
Is an enterprise with a relatively higher level of functions
and risks in each business unit
What are the main characteristics of the multinational
enterprise "principal business model?"
- Is an enterprise with relatively lower level of commercial
functions and risks (e.g. limited risk distributors (LRD),
commissionaires, etc.)
- Is an enterprise with a company leading the
manufacturing operations through which toll manufacturing
agreements and/or contract manufacturing agreements
and distributing the goods with low risk commercial
business units
Difference between the contract manufacturing
agreement and the toll manufacturing agreement,
mark the truer assertions:
- A service fee represents the toll manufacturer
remuneration
- Both the contract and the toll manufacturer role has a
relatively lower risk profile
Difference between the limited risk distributor (LRD)
and the commissionaire, mark the truer assertions:
- The commissionaire sells the goods on behalf of the
principal company
- The commissionaire cannot own the goods to be sold
- The LRD purchases and resells the finished products to
the clients
Define the "juridical" double taxation
"the imposition of comparable taxes in 2 or more states on
the same tax payer"
