Bhd E. Tax Treaties 1. To ameliorate the problem of double taxation and other matters, including tax incentives, tax avoidance, and tax evasion 2. Capital gains taxes. States may only tax residents. Non-resident companies may be taxed by a tax treaty state if they maintain a permanent establishment within that state.
Dividends received by a parent company are subject to the ordinary income taxes of the home state.
F. Tax Incentives 1. A tax scheme used primarily by host states to encourage international trade 2. Examples of Tax Incentives a. Income tax holidays for foreign investors. Carrying forward of allowances for income tax deductions. Waivers and deductions of import duties.