Access to Treaty Benefits

S. 521. Introduction

It is not arguable that the last century is associated with globalization which led to rapid and significant changes in every aspect of life. One of the fields strongly affected by these changes is the world economy. The goal of globalization is to boost economies around the world through increased global trade and growth in general. Every country wants to use the benefits of the open world and collect the fruits as much as possible.

The theory of international trade has its roots back in ancient Greece and thenceforth, through Adam Smith’s theory, free trade to the present time. However, globalization also carries certain risks. One of the uncertainties reflecting on countries’ economies in the global trade is absolutely fair taxation. In order to determine who and in what amount someone will take the benefits, countries enter into tax treaties with others to avoid or mitigate double taxation. The first tax treaty that addressed double taxation stems from 1899 and, by now, there are more than 3,000 in existence.

The definition of tax treaties, as agreements between sovereign nations, is stated in Article 2 of the Vienna Convention on the Law of treaties:“A treaty is a...