Peculiarities of international taxation
Reflecting upon a phenomenon of “taxes”, a mysterious concept for many, one may assume that it is just a collection of people’s monies by the government. But it is more than that. Indeed, understanding international taxation is crucial in today's globalized world, particularly for businesses, in their quest of double taxation avoidance, optimizing tax liabilities and making informed business decisions. It is also applicable to individual financial plans, in terms of expatriate tax planning, foreign investment and income and cross-border transactions. Thus, in the first part of the course, the students shall cover the main concepts, types and elements of taxation in general and its international aspect, such as tax treaties, transfer pricing, foreign tax credits and Controlled Foreign Corporations (CFCs).
However, taxation is also a powerful tool of various policies of a country: economic, social, internal and international. Therefore, students are also suggested to consider key principles that have shaped modern international tax systems. Gaining a holistic understanding of global tax diversity and the strategic considerations that nations adopt in crafting their fiscal policies, students may see that international taxation is a lively and ever-changing phenomenon. For instance, in recent decades, there has been an effort among the G-7 nations to better align their domestic tax laws and to balance their economic interests with the imperative of fostering global economic stability. Thus, one may identify common elements of international taxation for both inbound and outbound taxation.
As nations increasingly intertwine their economic activities, the significance of this framework becomes paramount, demanding a nuanced understanding beyond mere numerical computations. To contextualize the global reach of international taxes, students shall delve into historical precedents that have shaped the foundations of cross-border taxation, from ancient civilizations levying duties on trade routes, then to precedents such as the landmark case of Double Taxation Relief (1928) and finally, to more recent developments in the post-World War II era. Drawing parallels between historical tax systems and contemporary global tax structures allows the students to discern patterns and understand the evolving nature of international taxation.
Students shall also look into the socio-economic implications, the ethical considerations, and the legal dynamics that underpin the complex interplay between nations in matters of taxation.
