Іnternational double taxation of investment income from innovative projects and ways to minimize it

Abstract

The relevance of this study is driven by the intensification of cross-border innovation activities and the growing share of investment returns generated by knowledge-intensive and high-technology projects in the global economy. This expansion heightens the problem of overlapping tax jurisdictions and inconsistencies in national tax regulations.

The purpose of the article is to systematize theoretical and practical approaches to addressing international double taxation of investment income derived from innovative projects and to substantiate effective strategies for its mitigation amid globalization and digital transformation.

The findings indicate that international double taxation in the innovation sector extends beyond the formal duplication of tax liabilities. It represents a complex economic phenomenon that directly influences investment behavior, risk assessment, and the geographical distribution of innovation activities. The main forms of investment income generated by innovative projects are analyzed, as are the mechanisms through which conflicting tax claims arise in cross-border environments. The study establishes that the nature of innovation-driven income, which is tied to intangible assets, intellectual property, and digital business models, significantly increases exposure to double taxation compared to traditional investment activities. Emphasis is placed on the role of international tax treaties and coordinated relief mechanisms in reducing tax uncertainty and improving the predictability of returns on innovation-related investments. The article argues that classical methods of avoiding double taxation, including exemptions, offsets, and tax credits, remain relevant but require flexible adaptation to the economic characteristics of innovation processes. Special attention is given to tax planning and the strategic structuring of innovative investments, identified as key complementary tools for minimizing double taxation risks under strengthened international tax oversight.

The conclusions affirm that effective mitigation of international double taxation of investment income from innovative projects can be achieved only through a balanced combination of legal instruments, international institutional cooperation, and adaptive national tax policies. The study demonstrates that aligning domestic tax systems with international standards while preserving innovation incentives enhances the investment attractiveness of economies for cross-border innovation funding and supports sustainable innovation-driven growth.