OECD Model Tax Convention : Favors capital-exporting (developed) countries.
: Requires transactions between related entities (e.g., a parent company and its foreign subsidiary) to be priced as if they were between independent parties to prevent profit shifting. Key Instruments & Models
: Countries tax their residents on worldwide income , regardless of where it is earned.
: Countries tax income generated within their borders , regardless of the taxpayer's residence. Mitigating Double Taxation :
UN Model Tax Convention : Provides more taxing rights to "source" (developing) countries. :
: Some countries use a territorial system , exempting certain foreign-source income from domestic tax entirely. Transfer Pricing :
International Taxation May 2026
OECD Model Tax Convention : Favors capital-exporting (developed) countries.
: Requires transactions between related entities (e.g., a parent company and its foreign subsidiary) to be priced as if they were between independent parties to prevent profit shifting. Key Instruments & Models INTERNATIONAL TAXATION
: Countries tax their residents on worldwide income , regardless of where it is earned. INTERNATIONAL TAXATION
: Countries tax income generated within their borders , regardless of the taxpayer's residence. Mitigating Double Taxation : INTERNATIONAL TAXATION
UN Model Tax Convention : Provides more taxing rights to "source" (developing) countries. :
: Some countries use a territorial system , exempting certain foreign-source income from domestic tax entirely. Transfer Pricing :