# Situations where companies use loopholes in tax treaties to evade taxes Companies may use loopholes in inter-country tax treaties for tax planning in the following cases： 1. **Differences in the definition of permanent institutions**: Carry out substantive business without constituting a "permanent institution" to avoid being recognized as a taxable entity in high-tax countries 2. **Treaty Shopping**: Through the establishment of an intermediate holding company in a tax-advantaged country, use the country's tax treaties with other countries to obtain a lower withholding tax rate 3. **Mixed mismatch arrangement**: Use the differences in the classification of entities or financial instruments in different countries to realize that the same income is deducted in one country and not included in taxable income in another country. 4. **Intellectual property strategy**: Place intellectual property rights in low-tax countries and reduce taxable income from high-tax countries through royalties It should be noted that with the implementation of the BEPS (Base erosion and Profit shifting) Action Plan, countries have strengthened anti-tax avoidance measures. The feasibility of these strategies is weakening and may face legal and reputational risks. Tax planning should be carried out within the framework of legal compliance.