Controlled Foreign Corporation and Importance of Exchange of International Information

Abstract

Countries that want to take a share from the funds and capital flows of the saving countries and companies have started to make tax arrangements in order to get a share from the market in question with their unfair competition. In this context, the source countries have started to face concepts such as unfair tax competition, tax evasion, double tax prevention, tax base abrasion. Many countries have had to develop important tax institutions in order to prevent processes that underpin harmful tax competition. One of these was the concept of CFC and the foundation of this institution is based on the application of “information exchange”. In order to raise awareness in rapidly moving international capital and investments, international information exchange can prevent unfair tax competition with CFC practices. The main purpose of this article is CFC’s Turkey and in the world to provide information about the legal scope of the CFC’s is an institution that can prevent the harmful tax competition in the international exchange of information in order to operate effectively and efficiently is to draw attention to the importance. Agreements and arrangements such as the OECD model convention, FATCA implementation, double tax prevention agreements and the European Union Mutual Assistance Directive are the basis for achieving this goal.

Keywords

• controlled foreign corporation
• exchange of information
• harmful tax competition
• double tax preventation agreement
• earning of controlled foreign corporation