How do the OECD's model tax conventions affect international taxation?

International taxation is a complex and ever-evolving field of law. The Organisation for Economic Co-operation and Development (OECD) is one of the main entities responsible for helping to shape and influence international tax law. The OECD’s model conventions are a set of international tax agreements that provide guidelines and recommendations for governments to follow when negotiating and maintaining bilateral tax treaties. The OECD’s model tax conventions set out a framework for how international taxes should be allocated in a given situation by setting forth rules and principles for taxation rights and liabilities between countries. By codifying these rules, the model conventions make it easier for countries to determine which country should be given the right to tax income, profits and capital gains arising from cross-border economic activities. The model conventions also provide guidelines to help countries avoid double taxation, which is when two countries tax the same income or assets. It also helps countries avoid issues related to treaty shopping, which is when a business takes advantage of tax laws of one country even though they are not based in that country. The OECD’s model tax conventions provide a useful tool that can be used by countries around the world to improve the process of international taxation. By encouraging more uniformity in the field of international taxation, the conventions can help to ensure that all countries are receiving the tax revenues that they are entitled to.

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How do the OECD's model tax conventions affect international taxation?

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