Taxation of International Transactions

Taxation of international transactions involves the rules and laws that determine how businesses and individuals pay taxes when they engage in cross-border trade, investment, or services. It ensures that income earned from foreign operations is taxed appropriately, preventing double taxation (being taxed in both countries) or tax evasion. Countries often have agreements called double tax treaties to coordinate taxation rights. These rules cover issues like transfer pricing (pricing of goods/services between related companies across borders) and withholding taxes on cross-border payments. Overall, it balances fair taxation while encouraging international commerce.