International Tax Primer

Tax practitioners, multinational companies and national tax authorities have relied on this indispensable resource since its first edition over two decades ago. The Primer provides the reader with an introductory analysis of the major issues that a country must confront in designing its international tax rules and coordinating those rules with the tax systems of its trading partners, with numerous examples drawn from the practices of both developed and developing countries. This fifth edition follows the format and sequence of earlier editions, with updates on ongoing developments with respect to the Organisation for Economic Co-operation and Development’s (OECD) base erosion and profit shifting project, the revisions to the OECD Guidelines on Transfer Pricing, and updates to the OECD and UN Model Conventions.

Several new sections have been added to the fifth edition. Unquestionably, the most important development in international tax since the publication of the fourth edition in 2018 has been the OECD Inclusive Framework’s Pillar One and Pillar Two proposals for dealing with the tax challenges posed by the digital economy. This edition explores in detail both Pillar One, which proposes new nexus and profit-allocation rules for the residual profits of the largest and most profitable digital multinationals, and Pillar Two, which proposes a global minimum tax on large multinationals. Also new to the fifth edition are sections dealing with digital services taxes, hybrid arrangements, and new Article 12B of the UN Model Convention dealing with automated digital services, as well as a brief history of international tax.

The book strikes a balance between the specific and the general by illustrating the fundamental principles and structure of international tax with frequent reference to actual practice in a variety of countries. Coverage includes the following:

• taxation of residents on foreign income and nonresidents on domestic income;

• mechanisms used to mitigate the risks to taxpayers of international double taxation;

• transfer pricing rules to prevent the avoidance of tax by multinational corporations;

• anti-avoidance measures dealing with tax havens, treaty shopping, and other offensive tax planning activities;

• overview and analysis of the provisions of bilateral tax treaties and the OECD and UN Model Treaties on which they are generally based; and

• challenges posed by taxation of income derived from the digital economy.      

An extensive glossary of international tax terms is included.

With examples of typical international tax planning techniques and descriptions of the work of the major international organizations that play an important role with respect to international tax, the Primer remains the preeminent first recourse for professionals in the field. Although of greatest value to students, tax practitioners and government officials confronting international tax for the first time, this book is sure to continue in use by tax professionals at every level of experience and on a worldwide basis.