Question

Part I. Comprehensive Questions (50%) Provide comprehensive answer for each question. 1. Please explain why the e-commerce / industrial revolution can create more International tax-related problems. Provide an example if you wish to. 2. Double taxation might reduce the investor's interest in conducting cross border transactions. Please provide an illustration to show the negative effect of double taxation 3. A tax treaty is an international law that bound the countries, and need to be respected. However, the domination of developed countries toward the developing countries might affect a tax treaty. Please explain and describe the meaning of this statement. 4. Please provide a logical argumentation of why the active income shall be taxable in the source country, and why the passive income shall be taxable in the domicile country. 5. Please explain why in the tax treaty concerning dividend and interest, the limited taxation rights can only be applied if the recipient of the dividend is the beneficial owner. Illustrate if needed.

Answer 1

Ivaestion No. 1 Ilie. Commerce : E commerce moans nothing Trade (ors commercial buk doing business (or Tramscaction in Electronic modea 12. Enternational inslement :- in this e. Commerce era ex any thing can be purchased from kry where from the world. The person live in India can buy a Produck which is Soldin Africa Gry america main Benefit of the e-commerce is our orade 8 internationaly accepted and 13 various Tax and laws & . Every Country has its Tenique laws related administrakion and Tax. A. International Tox related Problemer :- - If a person lives in a country which has Seperake laws and Tax rules boys a Product from the country far from his country where the laws and Tox rukes different. Then There must be confusion will arrivee

This is the reason for that e. Commerce Create Intemakinal Tax related Problems. Double Taxations- Example of ir A Produce from Products and he export the Ivon Product Xt" For Job work in Singapore. He Pays Toxes while export and pays Toxes after impost of finished produck from Singapore & A & Double Toxed in India for omport and exposk. 2. So her bis interest will be reduced & Transaction with andra La Double Taxation is nothing but Taxed double in Single Product Another example of GST OF A Produce "yz and Give Job work komr. Bl with GST and after he finished he buy the Same goods with GST This Double Toxation wood affect the investoren Gross border.. Scanned with CamScanner

anestion folo 30- Tax kreatyo- Tax breaty į agreement between two countries to avoid Double Toxakion in Both Countries. Developed Countries economy The economy of Developed countries nok to dependent with any then Country. So truely Speaking the developed Countries is go with noture to karn money not to obgy the Tax breaty: Domination : The developed Countries asnale Dominates the Developing countries on Trade. Because the Developing countries Dominster belenk with Developed Country So the Developed country I did not obey the Tox treaty and it Dominates the Developing country, cs Scanned with CamScanner

Questions Noolt Active Encome and Passive in comes I Income arrived from ackurtig on Perrakions of persons from out side his country is called active in Come. ②). Income arrived from the lasser actuities con No actuity on Property or renkal income is cared Passive in come. Tax on active in come : Since active is come is raised by the person by his own operation So the & Tox Should be bried by the Country where he is kreaked as resident by the Tox laws Pax on Pasture in come: Since the Passive in Come arrived from the assets that Situated in Country where it belongs. So the Tox Should be levied by the Country where k s raised. Scanned with CamScanner

(5) question No85. Divendo The Tax on Durdend § already by the country because Durdend ů a single Part of Profit of the company. So the Profit the Company & already tried as Profit by the ownbrics Tax Cows So that Limited Tax Caurs are applicable for Durdent. interest : Some of the Countries like india use the Tos ie Tox deduction at Surce method. In this method the Tax is Lored where the interest is Payable so the Paron interest should be limited Soy the Country. Thank you Seanned with Scanner