Tax sparing definition

Tax sparing is a means by which the tax system of a capital-exporting country can be made to accommodate the tax incentives of developing countries. More specifically, in this case, Japan "spares" the tax it would normally impose on the untaxed (or low-taxed) income earned by Japanese investors in Pakistan by granting them foreign tax credits equal to the tax they would have paid in Pakistan (in the absence of the incentives). Japan's bilateral tax treaties with Sri Lanka, Zambia, Brazil, the Philippines, China, Thailand, Bangladesh, and Viet Nam have tax-sparing provisions.
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Tax sparing is a means of ensuring that the relief associated with tax incentives offered by developing countries to foreign investors is not offset by taxation in those investors' country of residence owing to the latter's use of the credit method for relieving international double taxation.
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Tax sparing is a means by which the tax system of a capital-exporting country can be made to accommodate the tax incentives of developing countries. More specifically, in this case, Japan "spares" the tax that it would normally impose on the untaxed (or low-taxed) income earned by its investors in India by granting them foreign tax credits equal to, or possibly greater than, the tax they would otherwise have paid in India (in the absence of the incentives).
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Examples of Tax sparing in a sentence

  • Tax sparing provisions were once a common feature of DTAs between developed and developing countries.

  • Tax sparing entails capital-exporting country granting a credit not only for the tax paid but for the tax spared (annulled or reduced) in source countries with the aim of providing incentives for investments.

  • Tax sparing credit is therefore an extension of the regular tax credit.

  • Tax sparing was cited as an example of a practice that was generally no longer supported by developed countries and was less commonly proposed by some developing countries than in the past.

  • Tax sparing (to the extent of 10% of interest income) is currently there in the existing DTAA.

  • Tax sparing arrangements under the provisions of that DTA expired on 30 June 1984.

  • Tax sparing was contemplated and even proposed for in- clusion in one treaty (with Pakistan), but it was ultimately rejected by the United States, largely due to the vigorous opposition of Stanley Surrey.

  • Tax sparing should ideally be restricted to business income rather than passive income.

  • Tax sparing provisions have emerged as a policy that is included in many bilateral tax treaties to prevent host country tax incentives from being nullified by residence country taxation.

  • Tax sparing provisions preserve the tax incentives granted by a low-income country by requiring the high- income country to give a tax credit for the taxes that would have been paid had the incentive not been granted.


More Definitions of Tax sparing

Tax sparing is a means by which the tax system of a capital-exporting country can be made to
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Related to Tax sparing

  • Tax Expenses means all federal, state, county, or local governmental or municipal taxes, fees, charges or other impositions of every kind and nature, whether general, special, ordinary or extraordinary, (including, without limitation, real estate taxes, general and special assessments, transit taxes, leasehold taxes or taxes based upon the receipt of rent, including gross receipts or sales taxes applicable to the receipt of rent, unless required to be paid by Tenant, personal property taxes imposed upon the fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances, furniture and other personal property used in connection with the Project, or any portion thereof), which shall be paid or accrued during any Expense Year (without regard to any different fiscal year used by such governmental or municipal authority) because of or in connection with the ownership, leasing and operation of the Project, or any portion thereof.

  • Tax Year means a period beginning with 6th April in one year and ending with 5th April in the next;

  • Tax Payment means either the increase in a payment made by an Obligor to a Finance Party under Clause 12.2 (Tax gross-up) or a payment under Clause 12.3 (Tax indemnity).

  • council tax benefit means council tax benefit under Part 7 of the SSCBA; “couple” has the meaning given by paragraph 4;

  • Operating Expenses is defined to include all expenses necessary or appropriate for the operation of the Fund (or Class, as applicable), including the Advisor’s investment advisory or management fee detailed in the Investment Advisory Agreement and any Rule 12b-1 fees and other expenses described in the Investment Advisory Agreement, but does not include taxes, leverage interest, brokerage commissions, dividend and interest expenses on short sales, acquired fund fees and expenses (as determined in accordance with SEC Form N-1A), expenses incurred in connection with any merger or reorganization, or extraordinary expenses such as litigation expenses.

  • Tax Return means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.