International Taxation May 2026

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

: Allow taxpayers to reduce their domestic tax liability by the amount of taxes paid to a foreign government. INTERNATIONAL TAXATION

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 : : Some countries use a territorial system ,

OECD Model Tax Convention : Favors capital-exporting (developed) countries. The primary goal is to allocate taxing rights

: Requires transactions between related entities (e.g., a parent company and its foreign subsidiary) to be priced as if they were between independent parties to prevent profit shifting. Key Instruments & Models

: 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

: Bilateral agreements that determine which country has the primary right to tax specific types of income (e.g., dividends, interest, royalties).