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  • Double Taxation

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    Agapito Duque
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    After performing abroad, an artist was taxed by his home country on his foreign earnings, facing double taxation. However, tax treaties between countries typically provide relief from double taxation through tax credits or exemptions to avoid this economic burden. In general, countries either exempt foreign income from domestic taxes or grant credits for foreign taxes paid to resolve double taxation concerns. Early tax treaties allocated taxing rights of earnings to only one state, exempting it in the other state.

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    After performing abroad, an artist was taxed by his home country on his foreign earnings, facing double taxation. However, tax treaties between countries typically provide relief from double taxation through tax credits or exemptions to avoid this economic burden. In general, countries either exempt foreign income from domestic taxes or grant credits for foreign taxes paid to resolve double taxation concerns. Early tax treaties allocated taxing rights of earnings to only one state, exempting it in the other state.

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    © All Rights Reserved
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    26 views1 page

    Double Taxation

    Uploaded by

    Agapito Duque
    After performing abroad, an artist was taxed by his home country on his foreign earnings, facing double taxation. However, tax treaties between countries typically provide relief from double taxation through tax credits or exemptions to avoid this economic burden. In general, countries either exempt foreign income from domestic taxes or grant credits for foreign taxes paid to resolve double taxation concerns. Early tax treaties allocated taxing rights of earnings to only one state, exempting it in the other state.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    After returning from his performances abroad, the artiste is again

    confronted with taxation, because his residence country wants to tax his
    foreign performance fees as part of his worldwide income. But this threat
    of economic double taxation is normally relieved with financial
    compensation by the residence country (tax credit or tax exemption) which
    has been inserted in all bilateral tax treaties. Most countries also provide
    this double tax relief unilaterally.1
    In general, there are two ways to avoid double taxation:
    (1) exempting foreign income from domestic taxation; and
    (2) granting a credit for foreign taxes.
    When the first tax treaties were concluded 100 years ago by the continental
    European countries,2 it was logical for two states to distribute the taxable
    earnings between themselves by allocating the tax right to only one state,
    making these earnings tax exempt in the other. Until World War II, this
    was the method unanimously applied by

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