International Tax Law

What is International Tax Law?

The term international tax law means laws that stem from domestic sources and international sources, that refer to taxation in cross border situations. 

See 2.2 of  International Tax Law by Peter Hongler, 2021

International tax law is found in: 

1) International Tax Agreements:

• Double Taxation Agreements (DTAs) - the most common type of international tax agreements. These treaties between two or more countries are also known as Tax Treaties, Income Tax Treaties or Tax Conventions. For the sake of consistency and to avoid confusion, in this Guide these agreements are called Double Taxation Agreements or DTAs. See the What is Double Taxation? (below) for more information on double tax and DTAs. 
• Other international agreements / treaties - these include treaties between two or more countries that:
  • only cover particular types of income, such as shipping and air transport; 
  • treaties that only cover a particular tax, such as social security; and 
  • treaties that provide for exchange of information and mutual administrative assistance in collecting taxes.

As with the DTAs, these other types of international agreements are most often bilateral, but may also be multilateral (for example, there is a Convention on Mutual Administrative Assistance in Tax Matters between OECD member countries). 

2) Domestic laws that consider the jurisdiction to tax entities, and that concern the taxation on foreign income of residents (worldwide income), domestic income of non-residents and cross-border transactions. 

What is Double Taxation? What are Double Tax Agreements? 

Double taxation occurs when a taxpayer is subject to comparable tax on the same income or gains in more than one country, which in effect taxes income twice. 

Double Tax Agreements (DTAs) aim to prevent fiscal evasion regarding taxation, and to avoid prevent the double taxing of income by allocating taxing rights over this income between the treaty partner countries. The taxing rights may either be exclusive to one of the treaty partners, or shared between them.

DTAs are usually bilateral, but can also be multilateral treaties between several countries in a region (for example, there is a Nordic DTA) or under the auspices of a regional organisation (for example there is a DTA between the members of the Caribbean Community organisation, CARICOM).

The most common form of DTA is treaties for the avoidance of double taxation of income and capital. Measures in such treaties to prevent tax evasion typically include exchange of information provisions and other forms of mutual assistance. Another common type of DTA covers the avoidance of double taxation in respect of inheritance (or estate) and gift taxes.

See also the following open access journal articles from SSRN on double taxation, which are a good introduction to the topic: