An examination of the dispute resolution mechanisms under Double tax treaties for resolving international tax disputes.
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Date
2021
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Publisher
Faculty of Law, Ajayi Crowther University Oyo.
Abstract
The purpose of a Double Tax Treaty is to promote international trade by
eliminating double taxation that could arise when two sovereign countries decide
to tax the same income and capital of a taxpayer under their respective domestic
tax laws. Nonetheless, differences in opinion between two sovereign countries as
to the interpretation and application of the provisions of the Double Tax Treaty
can create an international tax dispute as to who between the two sovereign
countries has the right to impose tax on the income and capital. An unresolved
international tax dispute has the potential of exposing cross-border income and
capital to double taxation which can undermine and discourage international
trade and investment. It is in this regard that Double Tax Treaties contain certain
dispute resolution mechanisms to resolve international tax disputes without
necessarily going through lengthy litigation proceedings which can be uncertain,
expensive and time consuming. The objective of this article is to examine the
dispute resolution mechanisms under the Organisation for Economic Co
operation and Development (OECD)’s Model Double Tax Convention for
resolving international tax disputes. The article also examined the resolution of
international tax disputes in Nigeria.
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Citation
Ajayi Crowther University Law Journal. 4(1): 1-20