SUVERANITATEA FISCALĂ ŞI CALEA AMIABILĂ DE EVITARE A DUBLEI IMPOZITĂRI
TAX SOVEREIGNTY AND THE DOUBLE TAXATION MUTUAL AGREEMENT PROCEDURE

Summary/Abstract: The conflict between two tax sovereignties can be resolved by granting the right of taxation to one of the Contracting States or by sharing the right of taxation proportionally between the Contracting States. The concept of fiscal sovereignty is therefore viewed differently from that of political sovereignty. We can speak of a territorial entity which, regardless of whether or not it enjoys political sovereignty, has fiscal sovereignty, with a system that has two characteristics: technical autonomy and exclusivity of application. The technical autonomy of the tax system consists in the fact that it contains all the rules necessary for it to function in its own right. The condition of exclusivity of application is achieved by the fact that the tax system applies itself, to the exclusion of the application of other systems, to a given territory, where it is the sole provider of tax resources. The sovereign political and fiscal state cannot exercise any fiscal power outside its territory. Fiscal sovereignty is relative. The principle that tax laws are inapplicable in the territory of another State does not mean that they may not apply to assets located outside its territory and to persons operating outside its territory. Conversely, if it is the State which creates and applies taxes, it may, on its own initiative, accept derogations of a legislative or treaty nature in order to avoid double taxation. However, it is not enough to avoid double taxation to determine by regulation which state will have the exclusive right to tax one category of income or another, or to specify the conditions under which states will share this right between themselves. Tax treaties cannot resolve the situation where each Contracting State taxes one and the same person, who is not a resident of either Contracting State, on income arising in a Contracting State or on wealth held there, because tax treaties apply only to residents. However, this situation can be resolved separately by mutual agreement.

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