International Law - tax system Essay Example | Topics and Well Written Essays - 2000 words

International Law - tax system - Essay Example The meaning of tax can be actually described as the money, which is charged by the government for Public Sector Borrowing Requirement (PSBR) (Public Acts 1994). When we interpret the definition, we may find out the reason why countries charge tax. The governments levy tax upon its citizens because they want money to regulate it in the whole country. It as actually meant for the betterment of the country and the nation itself. Governments may built roads, built a better infrastructure, improved public organization services, improve the level of education, building schools to remote areas, proving better and free health care, etc. Government may charge the tax to invest back to the country in turn. Where as international law refers to the general rules and regulations practiced in most part of the world (Mifflin 2007). It is the law which is followed by all the countries worldwide and so it is called international. There are certain rules and procedures which are followed in every country of the world. These practices are important to carry out in the country, as they enable governments to work and perform better and in organized way. Those laws are called international, as they are practiced in every country and are accepted as well. ... but the thing which binds then together is the law which they practice in the country, only that is common in them and it keeps the countries linked together. This essay will include all the necessary and valid information about the international laws regarding the taxation issues. As far as the case study is concerned, I will try to ensure the reader abut the authentication of the information and will make sure that my answer shall convince the reader as well. The essay will proof to be the perfect guide for the three friends for their decision about the avoiding tax and the OECD proposal about the business. As described in the case study, that the friends do not want to pay taxes and their nature of business is to contribute to the tertiary sector of the country. It is yet no specified that whether the owners plan is to provide services to the country only or to the rest of the world as well. The type of job which these friends are going to do can be practiced in a country as well as outside the country, ignoring boundaries. It is because of the reason that, the friends will have headquartered at one place and will precede the business from there only. That means headquarter; will exist in one place, yet their operation in different part of the world at the same time. This is what most of the translational companies do, ignoring the boundaries. But trans-national businesses do not try to void tax and in this case, the partners are trying to ignore the tax as well. Now, it is very essential to understand the two types of taxes, direct and indirect. Before I shall proceed, I may make it clear that the direct taxes are unavoidable. This means, the direct taxes cannot be ignored and we have to pay them even if do not want to. These taxes are the