Abstract

Double taxation is a critical issue in international trade and investment, where income is taxed in multiple jurisdictions, creating financial burden on businesses. The impact of double taxation on trade and investment, particularly in the Indian context, by analysing legal frameworks and tax treaties, which will be helpful in recommending policy measures to reduce the consequences of double taxation and its implications on economic growth. This study explores challenges faced by MNC’s and provides recommendations for a more efficient tax regime that promotes economic growth and cross-border trade. The findings highlight the importance of DTAAs, tax compliance mechanisms, and international cooperation in addressing the challenges posed by double taxation. Furthermore, it explores the implications of base erosion and profit shifting (BEPS), which allows companies to shift profits to low-tax jurisdictions, thereby exacerbating the issue of tax base erosion. It also examines the role of tax havens and their influence on global tax policies, discussing the measures taken by international organizations such as the OECD and the G20 in curbing tax avoidance. A comparative analysis of India's taxation policies with other economies is also conducted to understand best practices and potential areas for improvement. The study evaluates India's approach to taxation in light of recent global tax reforms, including the OECD's Pillar One and Pillar Two initiatives aimed at ensuring fair taxation of multinational enterprises (MNEs). The research underscores the need for tax policy reforms, enhanced bilateral agreements, and simplified compliance structures to foster a stable and conducive investment environment. It also suggests the need for better coordination between national tax authorities and international tax bodies to establish a more transparent and equitable tax system. By addressing these concerns, this study aims to provide a roadmap for policymakers to create a tax-efficient environment that supports economic expansion while maintaining fiscal sustainability.

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