Tax treaties are generally based on which of the following conventions?

A. OECD Model Tax Convention

B. UN Model Tax Convention

C. WTO Model Tax Convention

D. IMF Model Tax Convention

Choose the correct answer from the options given below:

Correct option is A

Tax treaties aim to prevent double taxation and promote cross-border trade and investment.
1. OECD Model Tax Convention (A): Focuses on developed countries, allocating taxing rights between residence and source countries.
2. UN Model Tax Convention (B): Designed for developing countries, favoring source-based taxation for income generated in their jurisdictions.
Explanation of Exclusions:
· WTO Model Tax Convention (C): WTO focuses on trade policies, not tax treaties.
· IMF Model Tax Convention (D): IMF deals with global financial stability, not taxation.
Information Booster: Tax treaties encourage global cooperation by avoiding tax disputes, ensuring fair distribution of tax revenue.
Additional Knowledge: The OECD and UN models influence bilateral tax treaties worldwide, fostering consistent frameworks for tax governance.