Are Double Tax Treaties Binding Internationally?
Double Tax Treaties (DTTs) are agreements between two or more countries aimed at avoiding the occurrence of double taxation on income. While they are established through international agreements, their binding nature is subject to the domestic laws of the countries involved.
In general, once ratified by the respective national governments, DTTs become legally binding. This means that the provisions contained within these treaties supersede domestic tax laws of the signatory countries to prevent double taxation. However, the effectiveness of a DTT relies heavily on the jurisdictions' commitment to adhere to the treaty's terms.
It is important to note that if a country decides to amend its domestic tax laws, the existing DTT may still be in force unless explicitly terminated. Furthermore, international law recognizes that DTTs are upheld so long as they comply with the general principles of international agreements, giving them credibility on the global stage.
In conclusion, while double tax treaties are intended to be binding and effective in preventing double taxation, their enforcement depends on the cooperation of the countries involved, their adherence to international norms, and their willingness to resolve any disputes that may arise regarding interpretation or applicability.