How can multinationals protect themselves from double taxation?

Multinational companies can protect themselves from double taxation by taking advantage of various tax treaties between countries. These treaties are agreements between two countries that determine how income is divided between them and the amount of tax that can be imposed on it. By having a tax treaty in place, the two countries involved agree to limit the amount of taxes one country can impose on the income of a company based in another. Additionally, these treaties can provide exemptions from taxes on certain types of income, allowing for a portion of the income to be exempt from taxation in one or both countries. Companies can also employ strategies such as shifting the location of profits to the country with the lowest tax rate or establishing a regional headquarters to manage the international operations of the company, thus avoiding double taxation. Finally, companies can also employ transfer pricing strategies, where profits are shifted from a higher-tax country to a lower-tax country, thus reducing the overall tax burden significantly. Overall, multinationals can take advantage of a variety of strategies to avoid double taxation and minimize their tax burden.

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How can multinationals protect themselves from double taxation?

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