What role does the OECD play in preventing double taxation?
July 29, 2023 | 110,00 EUR | answered by Isabel Zimmermann
Dear tax advisor,
My name is Georg Weiß and I am currently dealing with the issue of double taxation. In this regard, I came across the role of the OECD in the prevention of double taxation and have some questions about it.
First of all, let me explain the current situation: As an internationally active company, I have business relationships with various countries and therefore I am confronted with the issue of double taxation. Currently, I am paying taxes in both my home country and the countries where I conduct business, which results in a double burden. This not only financially burdens my company, but also makes tax planning complicated and time-consuming.
My concerns mainly lie in the fact that I am not sure what measures I can take to avoid double taxation. I have heard that the OECD has published guidelines and recommendations for the prevention of double taxation, but I am unsure how to implement them in practice. I am also worried about the cooperation between the different tax authorities, as uncertainties and misunderstandings can often arise.
Therefore, my question to you is: What specific role does the OECD play in the prevention of double taxation and how can my company benefit from it? Are there specific measures or recommendations that I can implement to avoid double taxation? What steps are necessary to cooperate with the various tax authorities and find a mutually agreeable solution?
I look forward to your assistance and thank you in advance for your support.
Sincerely,
Georg Weiß
Dear Mr. Weiß,
Thank you for your inquiry regarding double taxation and the role of the OECD in avoiding this issue. As a tax advisor for international tax matters, I am happy to assist you and provide some information on this topic.
The OECD does indeed play an important role in combating double taxation. The organization has developed guidelines and recommendations to ensure that businesses and tax authorities can manage tax burdens fairly and efficiently in the international business environment.
A key instrument of the OECD for avoiding double taxation is the so-called "Model Tax Convention on Income and on Capital." This agreement establishes rules to prevent a taxpayer from being taxed in multiple countries on the same income. It defines, among other things, which country has the right to tax and how double taxation can be avoided.
As a company operating internationally, you can benefit from these OECD guidelines by following the provisions of the Model Convention. You should ensure that your business structures and transactions comply with international tax regulations and that you provide all necessary documents and evidence to ensure correct taxation.
To avoid double taxation, it is important that you cooperate with various tax authorities and find a mutually agreed solution. This requires transparent communication and a willingness to share information openly. You can also benefit from the mutual agreement procedures offered by tax authorities to resolve disputes over taxation.
Overall, the OECD is a key player in preventing double taxation, and it is worth adhering to their guidelines and recommendations to fulfill your tax obligations and avoid unnecessary burdens.
I hope this information is helpful to you and I am available for any further questions you may have.
Best regards,
Isabel Zimmermann
