While some time ago international considerations were merely a secondary aspect of tax policy decisions, this is no longer the case today. Not only should tax policy consider the appropriate taxation of cross-border business transactions as well as the reduction of International tax evasion , but tax policy decisions are more and more influenced by global trends in business taxation and the tax systems of neighboring countries. New challenges, such as Electronic commerce or International tax competition require policy responses on the individual country-level and also increased international coordination.
Tax treaties are the main multilateral instrument to avoid double taxation.
They also facilitate the international cooperation of tax administrations, especially the Exchange of taxpayer information .