The International Double Taxation – Avoiding Methods
Nicoleta Barbuta-Misu1, Florin Tudor2
1Dunarea de Jos University of Galati, Faculty of Economic Sciences, Nicoleta.Barbuta@ugal.ro
2Dunarea de Jos University of Galati, Faculty of Law, Florin.Tudor@ugal.ro
Abstract. The paper presents the main ca uses that determine double taxation, its forms, i.e. the economic
double taxation and the international legal double taxation, the need for eliminating the double taxation and
avoiding methods. In the pres entation of the avoidance methods have been used practical examples for
comparison of the tax advantages for income beneficiary between: the total exemption method and
progressive exemption method, on the one hand, and total crediting method and ordinar y crediting method,
on the other hand, but the comparing of tax reduction between methods of exemption and crediting.
Keywords: exemption method, crediting method, tax advantages, tax reduction.
The development of the world economy, enlarging the economic and political interdependence
between various regions of the world, the emergence and remarkable development of the transnational
companies and the excessive taxation practised by some states have made necessary the concern of the
operators for tax planning and adoption of some legal measures to stimulate the development of the
international economic relations by participating countries.
The economy globalization leads to a real half of individuals and legal person’s incomes, the public
authorities of states seeking to take advantage of this circumstance and by doing to the taxation of the
entire incomes of individuals and resident legal persons of the states concerned, as revenues from non-
residential persons on the territory taken into account.
So we get that certain income to be taxed both in the state of the origin of incomes, as well as in the
state of destination, a fact of nature to prevent amplification even further of the relations between
states, where they no take measures to eliminate or at least, to limit the phenomenon.
2 The causes of the international double taxation
International double taxation was determined by the diversity of the national systems, the
particularities of taxation policies and how to use this tax and duties as levers to stimulate or limitation
of economic activities, and not only has adverse effects on society, in general.
This affects the export efficiency and external competitiveness of goods because duties and taxes
affect prices of goods and tax burden is greater than if the income or wealth would be subject to
taxation legislation from a single state (Mosteanu, 2003).