International Taxation Rules on International Companies Essay

International Taxation Rules on International Companies - Essay ExampleThe OEEC was subsequently rearranged into the Organization for Economic Cooperation and Development (OECD) in 1961. Today, the OECD is made up of thirty countries that accept the principals of free market economy and representative democracy (Owens, 2008). Most OECD countries argon developed countries, with high-income countries. Some of its members include France, united Kingdom, United States, Denmark, Finland, Spain, Sweden, Italy, Japan, among others.The functions of the OECD are multifaceted. But for the purposes of this discussion, it is only imperative to mention that, OECD functions as an intergovernmental organization which aims at coordinating economical development of members as well as non-member nations through trade liberalization, multilateral trade, and economic reform. The organization to a fault covers economic and scientific research, technology transfer, world(prenominal) terrorism, and e conomic and statistical information (OECD, 2007).As much as the OECD would want to come up with proper legislation and... For example, most developed nations have zero or low taxes for certain types of groups. As such, the organization has found itself leaning much on international gross rules in its operations. This is because many corporations may have interests in several countries that employ different tax regimes (Doenberg & Hinnekens, 1998). A good example would be the Multinational corporations, which must employ the services of an international tax medical specialist to decrease the global tax liabilities. Tax laws from different countries around the world affect companies and individuals with assets and income in more than one nation differently.Tax laws vary in different nations as to what income is taxable and how it is measured, who or which entity is taxable, when deductions are allowed and income is taxed, what deductions are allowed from the taxable income and the tax rates. These variations, if not well controlled may bring a scenario where the same income of an international company is taxed by different countries (Larkins, 2004). This is better known as double taxation. As such, there is ingest for international tax planning to take care of the loopholes occasioned by the above named variations among countries. How then must international companies be taxed rationallyThe concept of international tax planning and law has gained considerable attention from the panorama of tax authorities as well as from the taxpayers. The OECD has played an active role in the cosmea of international tax rules to help businesses move away from double taxation, intractable disputes, and uncertainty (Owens, 2008). According to Mr. Jeffrey Owens, a director of OECD in tax policy administration, improper tax rules can reject international activity, discourage investment, and