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Abuse Of International Tax Treaties

Posted on:2009-02-04Degree:MasterType:Thesis
Country:ChinaCandidate:J Y JinFull Text:PDF
GTID:2206360272484784Subject:Economic Law
Abstract/Summary:PDF Full Text Request
Treaty shopping is the use of tax treaty by a transnational taxpayer who is not resident in either of the Contracting States, usually by organizing a corporation or other legal entity (for instance, direct conduit company) in one of the Contracting States, for the purpose of obtaining any special treaty benefits not otherwise available, for example, reduced withholding rates on dividends, interest and royalties. Treaty shopping, which is a common way of avoiding tax through international transactions, has produced many harmful effects on international economy including Chinese economy. Therefore, the anti-treaty shopping movement appears to be gaining some ground as some countries including the U.S.A. have come to view treaty shopping as a major threat to their domestic tax base.This thesis consists of five chapters, summarized as follows:Chapter 1 provides an overview of international tax treaty and describes influential model tax treaties. After that, firstly , provides the concept, features, reasons of the origin, and present condition of treaty shopping. Secondly, it analyzes harmful effects produced by treaty shopping, thus dealing with the necessity of curbing treaty shopping. Thirdly, it illustrates the common forms of treaty shopping, and then introduces some suggestions which international bodies made. Lastly, it illustrates a criterion for judging treaty shopping.Chapter 2 introduces four kinds of anti-treaty shopping measures.Chapter 3 introduces anti-treaty shopping measures that Switzerland, the U.S.A., Germany, Canada, France, and other countries adopted.Chapter 4, firstly, deals with tax treaties that China has concluded with foreign countries. Secondly, how to safeguard and prevent transnational taxpayers avoiding tax through treaty shopping in China and which kind of anti-treaty shopping measures should be adopted. Combining China's national conditions, it presents some effective measures for establishment and improvement of the domestic legal system and bilateral tax treaties on safeguarding and preventing treaty shopping in China.
Keywords/Search Tags:international tax treaty, treaty shopping, anti-treaty shopping measures
PDF Full Text Request
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