华隆建筑安装公司税务筹划研究 外文原文.pdf

International Tax Planning by Transnational Corporations: An Overview Abha Tiwari* Abstract. Globalization tends to open new era of transnational Corporation, where the determination of tax bases has become very technical. Tax can either be imposed on the basis of incorporation of accompany or on the basis of the income that can be attributed to a particular territory. The three main areas of conflict in determining the tax bases of Transnational Corporations are 1) allocation of profits between associated enterprises, 2) trade between associated enterprises and 3) determination of permanent establishment of transnational corporations. But all these systems are with some loopholes which ultimately leads to tax evasion. Tax planning is a legitimate device used by the companies to save tax but this device should not be used with the intention to evade tax. Keywords: Globalization, tax planning, tax avoidance In wake of globalization there has been a tremendous surge in the corporate world, it is the era of Trans National Corporations (hereinafter referred as TNC). Battling against multi jurisdiction and stringent tax regimes, lot of them are adopting ways and means to condense their tax liability. Since rate of tax varies and margin of tax is wide in some cases, TNC’s have been resorting to devices to shift income from one jurisdiction to another, so as to classify it differently. Devices such as ‘transfer pricing’, ‘treaty shopping’, ‘thin capitalization’ are some of the most prominent practices adopted.