CHECKING BUSINESS RELATIONSHIPS WITH A FOREIGN PARTNER BY TAX AUTHORITIES IN SERBIA IN ORDER TO PREVENT THE TRANSFER OF PROFITS ABROAD

Abstract

We live in a time when globalization and integration have become inevitable in the business world. The national market is very narrow, and the achievements of one national economy are limiting, which is why they exist an inevitable need for international capital.

These processes, conditioned close cooperation between tax administrations of interested parties the state in order to effectively prevent various forms of abuse in areas of taxation. Taxpayers can perform activities throughout of the world, maximally use tax deductions, or minimize tax burdens of dependent economic agents, all in the goal efficient business and profit making.

On the other hand, tax authorities must respect state borders in the exercise of their functions and this is precisely the reason why tax cooperation appears to be inevitable. That has created major problems for the national tax authorities and for this reason there is a growing need for mutual legal assistance in tax matters among countries. Law has so far not found a proper balance between the protection of national tax interests of countries and development international-legal tax standards in the field of mutual tax-legal assistance.

As part of international tax law, mutual legal assistance is provided in tax matters dedicated to the suppression of tax evasion and others harmful phenomena for the financial interests of countries. Information exchange between tax authorities, enables easier and safer tax collection, wider application of the principle of world income and stimulates taxation harmonization, reduces the costs of taxation, increases the amount tax revenues, and it also influences the suppression of tax evasion.