Foundations of Taxation Law

The Australian Government has negotiated bilateral tax agreements (also known as ‘treaties’ or ‘conventions’) with the governments of more than 40 nations. These agreements are often referred to as Double Taxation Agreements (‘DTAs’) since one of their main functions is to prevent international juridical double taxation. DTAs deal with double taxation issues by allocating taxing rights in relation to cross-border transactions between Australia and the respective ‘Contracting States’. DTAs also assist with the prevention of tax evasion through the exchange of information between the relevant tax authorities. They also indirectly serve to promote trade and investment between Australia and the Contracting States, as they reduce the uncertainty of international tax treatment of cross-border transactions. International juridical double taxation essentially arises where two countries tax an entity on the same amount. This can occur due to the different kinds of conflicts. For instance, double taxation can arise because it is common for countries to tax residents on their worldwide income and non-residents on income sourced within their territories.