What is the OECD's Model Tax Convention?

The OECD Model Tax Convention is an important part of international tax law. It is a model agreement between two countries on how they will tax income earned by individuals or businesses in one country but paid to an individual or business located in another country. The Model Tax Convention helps reduce tax avoidance and double taxation. It sets out rules for how much income is subject to tax and how much of that tax is due in each country. The Model Tax Convention also provides guidance on how double taxation can be avoided or minimized. The OECD Model Tax Convention was first adopted in 1963 and has since been updated at regular intervals. It is now widely accepted as the standard for international tax agreements between countries. The Model Tax Convention establishes a framework for governments to negotiate their own tax agreements. Each country will have its own rules and regulations about taxation, but the Model Tax Convention provides a general framework that both countries can agree to. In South Carolina, the OECD Model Tax Convention has been adopted and the state has several tax treaties with other countries. The Model Tax Convention makes it easier for businesses and individuals to understand the rules and regulations of taxation in different countries. It also helps to reduce the complexity of international taxation and makes it easier for countries to agree on taxation terms.

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What is the OECD's Model Tax Convention?

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