International Taxation

International taxation affects cross-border investing because more than one country may claim the right to tax the same income, gain, or transaction. For Canadian investors and advisors, the key task is to understand when Canada taxes on the basis of residence, when a foreign country taxes on the basis of source, and how treaties, credits, reporting rules, and documentation reduce or reallocate those tax claims.

This chapter is written as an exam-preparation chapter. The core official IMT topics are covered directly in the first five lesson pages: international tax conflicts and double taxation, the sources of international tax law, jurisdiction to tax, source-country taxation, and residence-country taxation. The final page is retained as a useful supplementary extension on transfer pricing, permanent establishments, and related practical issues that often appear in broader cross-border tax discussions.

In this section

• International Tax Conflicts and Double Taxation
  Why double taxation arises in cross-border investing, and how treaties, foreign tax credits, and allocation rules are used to reduce overlap.
• Sources of International Tax Law
  The main legal sources behind cross-border tax outcomes, including domestic law, treaties, guidance, and court interpretation.
• Jurisdiction to Tax
  How countries claim taxing rights through residence and source, and why dual residence and treaty tie-breakers matter in cross-border analysis.
• Source Country Taxation
  How source countries tax non-resident income, why withholding reduces cash received, and how treaties modify but do not eliminate source tax.
• Residence Country Taxation
  How residence creates worldwide tax exposure, and why foreign tax credits, reporting, and continued ties matter for cross-border investors.
• Transfer Pricing and Permanent Establishments
  The role of transfer pricing, arm's-length pricing, and permanent establishments in allocating cross-border business profits.