(1) Taxpayer? [2] Inconsistent concept

Regarding people's tax obligation, the international community has three basic principles: first, as a resident of a country, a person must pay taxes in the country of residence; Second, if a person is a citizen of a country, he must pay taxes in that country; Thirdly, if a person owns income or property from a country, he must pay taxes in the source country. The first two cases are called individualism principle, and the latter is called territorialism principle. because

There are differences between territorialism and individualism in different countries, but there are differences in specific provisions, such as the concepts of citizens and residents, which also brings a lot of opportunities for international tax planning.

(2) The degree and method of taxation vary from country to country.

Most countries levy income tax on the income of individuals and corporate companies, but the income tax on property transfer is different. For example, some countries do not levy property transfer tax. Similarly, personal and corporate income taxes are levied. Some countries have higher tax rates and heavier tax burdens, while others have lower tax rates and lighter tax burdens. Some countries and regions do not even levy taxes at all, thus creating opportunities for tax planning.

(3) Tax rate difference

Income tax is also levied, but the tax rates stipulated by different countries vary greatly. Transferring profits from high-tax areas to low-tax areas is one of the important means to make use of this difference in tax planning.

(4) the difference of tax base

For example, the income tax base is taxable income, but when calculating taxable income, countries have stipulated differences in various deduction items.

The difference may be great. Obviously, giving various tax incentives will narrow the tax base, while canceling various incentives will expand the tax base. Under a certain tax rate, the size of the tax base determines the tax burden.

(5) Avoid differences in international double taxation methods.

The so-called international double taxation means that two or more countries levy the same or similar taxes on the same tax source of the same taxpayer or different taxpayers who participate in economic activities in the same period, which can generally be divided into legal international double taxation and economic international double taxation. In order to eliminate international double taxation, different countries have adopted different methods, among which the credit method and exemption method are more common. In the case of using the latter method, opportunities for international tax planning may arise.

In addition, the differences in non-tax laws such as the use of anti-tax avoidance measures in different countries and the effective implementation of tax laws will provide certain conditions for taxpayers to carry out transnational tax planning, which is also an important objective reason for the emergence of international tax planning.

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