INTERNATIONAL BUSINESS: TAXATIONASA TRANSACTION COST IN INTERNATIONAL TRADE CONTRACTS

This research analyses the role of international trade contracts in the globalization's and the digital economy's era, as well as their specific characteristics that distinguish them from domestic contracts. Sustained upon the party autonomy, international contracts are a tool for facilitating international trade. An important factor that should not be overlooked is the tax burden, which constitutes a significant transaction cost in international business and can influence the decision of economic players regarding the conclusion of the legal agreement. Furthermore, tax evasion can also influence the parties when choosing the applicable law to the contract, which demands the establishment of connecting elements between the transaction and the legal order to which the parties wish to subject the contract, as well as an analysis of the commercial relationship's purpose and the economic substance beyond the chosen form to avoid tax evasion practices. It is concluded that taxation is an essential aspect of international trade contracts, and in this regard, international tax law and private international law overlap each other.