international double taxation - taxing one person in relation to the same tax base in at least two states for the same period.This phenomenon is quite a negative impact on the development of foreign trade relations, contributes to the difficulty of movement of capital and hinders the development of integration economic processes.In addition, some business entities, seeking to avoid an additional tax burden, make it so successfully that develop special schemes to minimize tax liabilities.
Double taxation should not be confused with the cumulation of the tax, which is the imposition of multiple taxes on the same source (repeated taxation).Such may be the case when the subject had previously been subjected to tax in favor of the state treasury.
also considering the concept must be distinguished from economic double taxation, which occurs during the taxable income as a self-payer, as well as part of taxation to shareholders as dividends.It is economic double taxation may contribute to minimize tax liabilities through transfer distributed profits as dividends to foreign shareholders of his company (in accordance with applicable legislation - taxation is made as to the location of the source of income, as well as on the location of the resident).
main causes of such taxation are collisions in the current tax legislation of the participating countries of legal relations between economic entities on commodity transactions, with the income and capital.These conflicts arise from the fiscal orientation of the state, in which power is fully and independently engaged in the establishment of taxable items, the range of its taxpayers, as well as the size and methods of levying taxes.The main criteria in determining the boundaries of tax jurisdiction are:
- residency, meaning the taxation of income of a resident, irrespective of the location of sources (the term can also be found under the name of "unlimited tax liability").Incomes of non-residents are subject to taxation only if they are derived from sources that country;
- territoriality, which provides for the taxation of all income received in that country, and from all taxpayers, regardless of their place of residence.
Elimination of double taxation is carried out in different countries.For example, some states base their economic relations with taxpayers on the basis of residence, while others - using the principle of territoriality.
Often, the international double taxation is due to the characteristics of the definition of the subject.Especially when it is taken as a taxpayer multiple countries.This is possible by the action of one State of the rules of residence in a certain period of time, when the economic entity resident in the territory of this country, and in another - the taxation of carried upon a finding of permanent residence in its territory.
The elimination of such a negative thing as double taxation, should be of interest to both sides.For example, a taxpayer with the taxation of fees and taxes in different countries of the same object considerably increases the tax burden.The interest of the state should be manifested in the creation of a favorable tax climate, attracting foreign investment and improving competitiveness.
