What is international tax
Traditionally, international taxation refers to treaty provisions relieving international double taxation. In broader terms, it includes domestic legislation covering foreign income of residents (worldwide income) and domestic income of non-residents; domestic legislation and treaty provisions containing rules against international tax avoidance and evasion; domestic legislation and treaty provisions relieving international economic double taxation; EC Directives and domestic legislation concerning cross-border direct taxation; and international rules and domestic legislation on the taxation of diplomats, consular officers and officials of intergovernmental organizations. IBFD International Tax Glossary 5th edition (2005).
Therefore an understanding is required of the interaction of the South African tax system with the systems of foreign countries.
There may or may not be double tax treaties in existence and one of the main problems in international tax is the question of source and residence. In SA we have a hybrid system of taxing worldwide income for tax resident persons and taxing non- residents on a source basis.
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