Statement-I : Legal agreements between two countries govern how both the countries tax earnings. Statement-II : International Law may determine how and whether companies can operate in a certain locale. Codes :
Both the statements are true
Statement-I: Countries sign bilateral tax treaties, or double taxation avoidance agreements, which fix which country may tax a given type of income (business profits, dividends, interest, royalties) and at what rate, and give credit or exemption to avoid taxing the same earnings twice. So legal agreements between two countries do govern how both tax earnings. Statement-I is true.
Statement-II: International law, made up of treaties and conventions, together with the national laws it shapes, can decide whether and how a company may operate in a place, for example through trade and investment agreements, sanctions, WTO rules or rules on territorial waters. Statement-II is true.
Since both describe real effects of the legal environment on international business, both are true.
Hence, Both the statements are true.
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