| Which of the following is/are true about Double Tax Avoidance Agreements (DTAAs)? |
| 1. It always lowers the annual gross tax revenue generated in the host country |
| 2. It is in the interest of investing individuals/companies. |
| 3. May encourage round-tripping of money. |
| Select the correct answer using the codes given below. |
A) Only 1
B) 2 and 3
C) Only 3
D) All of these
Correct Answer: B
Solution :
[b] DTAAS may increase the annual gross tax revenue generated in the host country if the tax in the host country is lesser than the other country. It is in the interest of investing individuals/companies since, it will reduce the double taxation. It may encourage round-tripping of money to the country with low taxation.
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