Double Taxation Agreements Meaning

The stated objectives of concluding a convention often include reducing double taxation, eliminating fiscal evasion and promoting the efficiency of cross-border trade. [2] It is generally accepted that tax treaties improve the security of taxable persons and tax authorities in their international transactions. [3] Double taxation is achieved when the same transaction or source of income is subject to two or more tax authorities. This can be done within a single country if independent government entities have the power to tax a transaction or source of income, or can lead different sovereign states to levy separate taxes, in which case it is called international double taxation. The problem of double taxation is due to the fact that tax jurisdictions do not follow a common principle of taxation. For more information, see help sheet HS304 “Non-residents – Relief under double taxation treaties” on GOV.UK. If you come to the UK and have UK work income that is taxed in your home country, you normally have to pay UK taxes. Your home country should give you double tax relief by giving a credit for UK taxes paid. However, if you are established in a country with which the UK has a double taxation treaty, you may be entitled to an exemption from UK tax if you spend less than 183 days in the UK and have an employer outside the UK.

The obligation for a company or an individual to pay two separate taxes on the same property for the same purpose and during the same period. In accordance with Sub-Chapter C of the Domestic Revenue Code, the federal government levies double taxation on companies by taxing both the profits received by the company and the profits distributed to the company`s shareholders through share dividends. . . .

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