In addition, Prof. Rohatgi is the founder of Basic International Taxation , a leading reference work for tax professionals and students worldwide. Know More. Quick Links. Roy Rohatgi. The analysis of the practical applicati In Stock. Product Details. Author Roy Rohatgi Weight 0. Volume I: Principles covers the basic principles of international taxation, an analysis of model tax treaties and a broad overview of various domestic tax systems.
Tanzania as developing country struggles in promoting and implementing various tax policies with the main purpose of rising state revenue, so that it can be able to provide social services to its people like building infrastructure and also medical service in hospitals. The IDA paved the way to improve the legal framework and the tax administration. The tax base had been broadening.
With help of the International Development Association's technical assistance the Tanzanian therefore tax reforms 4. It suffice it to say that Tanzania tax legal system is now stable, the state now is focusing on economic integration with other states.
The main purpose is to ensure economic growth of states. This economic integration among its priority is investment, exportation and importation of commodities.
States are very interested to tax on those criteria mentioned above, but with the purpose of protecting double taxation, international taxation was established. International taxation is the study or determination of tax on a person or business subject to the tax laws of different countries or the international aspects of an individual country's tax laws as the case may be. Governments usually limit the scope of their income taxation in some manner territorially or provide for offsets to taxation relating to extraterritorial income5.
Under international taxation it might happen where two countries are interested to tax a person, and this is where a conflict or tax dispute arises. Before going further we should look at the early days of tax treaties and negotiations concerning tax matters among states in the world. The first tax treaty was concluded in between Prussia and the Austro Hungarian double monarchy prior to this bilateral treaty there had already been similar arrangements within the German Federation.
After the signing of this first treaty it still took many decades before in the s the first set of model tax treaties was published. These are now known as the Geneva Models. Generally speaking UN tax model have got several updates; there have been number of negotiations concerning tax matters under international arenas. It is a forum of countries describing themselves as committed to democracy and the market economy, providing a platform to compare policy experiences, seeking answers to common problems, identify good practices and coordinate domestic and international policies of its members.
These rates should be established through bilateral negotiations. The second difference is that the UN Model Convention under Article 12 grants a limited taxation right to the source state with respect to royalty payments Under Article 12 of the Organization of Economic Convention and Development Model royalty payments are taxable only in the residence state of the recipient of the royalties More importantly is the difference in the royalty definition in both Models.
The definition in the OECD Model only comprises of industrial royalties including trademarks, cultural royalties. To mention a few those are the differences between the United nations Model and the Organization of Economic Convention and Development model, the provisions of these two convention totally they provides some differences as stated in detail there above.
These similarities are as follows; Firstly, the UN Model contains an alternative in Article 8B, where profits from the operation of aircraft are taxable only in the state where the place of effective management of the enterprise is situated. This is again not different from the OECD approach but there is a different approach with respect to profits from international shipping.
Furthermore As far as the royalty definition was concerned, the large majority of the treaties also a majority of the treaties signed between developed countries contained a definition similar to the UN Model definition, including the wording films or tapes used for radio and television broadcasting and the use of, or the right to use, industrial, commercial or scientific equipment as it is similar provided under Article 12 2 of the OECD Model Tax Convention 18 4.
Therefore it was found be it necessary for states to enter into bilateral agreements so that, these disputes could be able settled and to pave a way towards economic development. Each country now has given a responsibility to promote international taxation parity by a special emphasis on eliminating double taxation.
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