The Application Of The International Tax Convention To Partnerships

Partnership is a kind of special economic organization. It's legal status in taxation is different in every country. Some countries treat partnership as transparent entities, imposing no tax on the partnership itself but taxing each partners on its share of the partnership's income, others treat the partnership as a taxable entity, usually taxing the partnership on its income as if it were a company. Many differences may result in double taxation or non-taxation, some of which are discussed in this paper. Whether the partnership can enjoy favorable benefit from international taxation convention? Because it doesn't explicitly mention legal status in taxation of partnership in international taxation convention, we must interpret taxation convention in our views. The author thinks that partnership or partner is appropriate body of international taxation convention, they can enjoy favorable benefit from international taxation convention. Then, we will discuss that the state of source and the state of residence will endow what favorable benefit of international taxation convention to partnership or partner . This paper will analyze these problems from practice, legislation and theory and connect the levy-rule and international taxation convention of our country. The paper will provide some useful suggestion to solve international in double taxation. The paper comprises four chapters: Chapter 1 mainly introduces partnership^ levy-rule > taxation conflict and harmony. Chapter 2 discusses the body qualification of partnerships in international taxation convention. First, the paper discusses the body qualification of partnerships in OECD Model double taxation convention on income and capital and Model taxation convention of U.S. Then, the author analyzes the question through examples. In conclusion, when some countries treat the partnership as a taxable entity, partnership can enjoy favorable benefit from international taxation convention as a resident. When some countries treat partnerships as transparent entities, or partnership is endowed body qualification or partner can enjoy favorable benefit from international taxation convention as a resident. Chapter 3 focuses on the question that if international taxation convention applies partnership, the state of source and the state of residence will endow what favorable benefit of international taxation convention to partnership or partner. The state of source will levy reduced rate taxation or not levy taxation. The state of residence will use the exemption method or the credit method to eliminate double taxation. Chapter 4 connectes the practice of our country. The paper indicates the deficiency of levy-rule and international taxation convention of our country. In end' The author provides some useful suggestion to perfect related inner legislation and international taxation convention. Our country should explicitly endow corresponding legal status in taxation to partnership.