What are double taxation agreements?
Double Taxation Agreements (DTA) are treaties between two or more countries to avoid international double taxation of income and property. The main purpose of DTA is to divide the right (tax jurisdiction) of taxation between the contracting countries, to avoid differences, to ensure taxpayers’ equal rights and security, and to prevent evasion of taxation.
Individuals with a permanent residence and with full and unlimited tax liability in either one of the contracting countries may be entitled to exemption/reduction from taxation of income and property according to provisions of the respective agreements, in absence of which the income would otherwise be subject to double taxation. Each agreements is different, and it is therefore necessary to check the respective agreement to ascertain where the tax liability of the respective person in fact lies, and which taxes the agreement stipulates.
Tax benefits under DTA for international transactions can take place in two ways. On the one hand, there can be an exemption from tax payments or a reduced tax rate on tax liabilities. On the other hand, there can be a refund of deducted withholding tax liabilities.
Our services
As an experienced team of tax advisors, tax experts and lawyers who deal with double taxation agreements, we can help you in the following matters:
- General advice on double taxation treaties.
- Analysis of tax exemption or application of a reduced tax rate based on DTA.
- Practical assistance in applying DTA.
- Analysis of the company’s condition in order to develop optimal structural solutions.