Treaty shopping

Treaty shopping,

Definition of Treaty shopping:

  1. The practice of structuring a multinational business to take advantage of more favorable tax treaties available in certain jurisdictions. A business that resides in a home country that doesnt have a tax treaty with the source country from which it receives income can establish an operation in a second source country that does have a favorable tax treaty in order to minimize its tax liability with the home country. Most countries have established anti-treaty shopping laws to circumvent the practice.

Meaning of Treaty shopping & Treaty shopping Definition