Ghana also uses Double Taxation Agreements (DTA) to rationalise tax obligations of investors who come from global tax sourced jurisdictions with a view to saving the investors the incidence of double taxation.
The most lively debate in the first two days of the UN tax committee meeting ended with the decision to start work on a new article for the UN’s model tax treaty that would allow developing countries to levy a tax on payments made to overseas providers of ‘technical services’. The advocates of this position support the view set out in the input paper [pdf] produced by Canadian tax professor Brian Arnold, which explains the problem as follows:
The payments for technical services erode the source country’s tax base, but such payments are often not taxable by the source country under the provisions of the United Nations Model Convention treaty. As a result, multinational enterprises sometimes use fees for technical, management and consulting services to strip the profits of their subsidiaries.