Avoidance of Double Taxation Based on OECD Agreements: Analyze of the Albanian-Italian model

Abstract

Albania is already an indivisible part of the integration process in the European Union and in other international organizations, process which requires the implementation of the international agreements on the avoidance of the double taxation. The origin of the double taxation is in the conflict between the residence principle and source principle. It can be avoided only through the signature of international agreements, which based on the dispositions created by the parties, avoid the double taxation by appointing the state which has the right to tax certain incomes of certain subject, or share this right between the two states, for relief of the subject from the double taxation. There are different techniques or methods in avoiding the double taxation, but our country has generally used the credit method. It is important to be mentioned that based on the Albanian model of the tax agreements signed up to now, their dispositions are closer to the OECD and United Nations model. In general, avoidance of double taxation is accompanied by urge of foreign investments, growth of the market competition and better quality and lower costs of the goods offered. The present study will evidence the advantages accomplished through signature of these agreements aiming at the removal of double taxation on the same incomes, towards the economic agents and the performance by the later of different economic, entrepreneurial activities towards international markets.

DOI: 10.5901/mjss.2014.v5n7p218