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By Fabienne Moquet, Tax Partner, Marc Rasch, TP Partner and Diana Tapia Dander, Transfer Pricing Manager at PwC Luxembourg
The globalisation of the economy has created a risk of double taxation linked to differences in tax legislations, which lead to several countries seeking to impose tax on the same profit. Countries entered into bilateral double tax treaties (“DTTs”) to reduce this risk. The residual risk is managed by mutual agreement procedures, on the basis of how countries agree to settle the issue.
The current tax climate is now threatening the balance of taxation powers which has been achieved through DTTs and the development of tax standards. The need for public resources, the claim for tax fairness, the challenge of tax standards, the...
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