Levying of compulsory charges on the same thing by two different jurisdictions
Double taxation is the levying of tax by two or more jurisdictions on the same income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes).
Double liability may be mitigated in a number of ways, for example, a jurisdiction may:
exempt foreign-source income from tax,
exempt foreign-source income from tax if tax had been paid on it in another jurisdiction, or above some benchmark to exclude tax haven jurisdictions, or
fully tax the foreign-source income but give a credit for taxes paid on the income in the foreign jurisdiction.
Jurisdictions may enter into tax treaties with other countries, which set out rules to avoid double taxation. These treaties often include arrangements for exchange of information to prevent tax evasion – such as when a person claims tax exemption in one country on the basis of non-residence in that country, but then does not declare it as foreign income in the other country; or who claims local tax relief on a foreign tax deduction at source that had not actually happened.[1]
The term "double taxation" can also refer to the taxation of some income or activity twice. For example, corporate profits may be taxed first when earned by the corporation (corporation tax) and again when the profits are distributed to shareholders as a dividend or other distribution (dividend tax).
There are two types of double taxation: jurisdictional double taxation, and economic double taxation. In the first one, when source rule overlaps, tax is imposed by two or more countries as per their domestic laws in respect of the same transaction, income arises or deemed to arise in their respective jurisdictions. In the latter one, when same transaction, item of income or capital is taxed in two or more states but in hands of different person, double taxation arises.[2]
^Мarynchaк, Yеvhеn (2019). "The Financial Nexus Between an Individual and a State". PUBLIC FINANCE: LEGAL ASPECTS: Collective monograph. Riga: Baltija Publishing. p. 130. ISBN 978-9934-571-82-4.
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representative of St. Kitts and Nevis Kennedy Simmons signed the DoubleTaxation Relief (CARICOM) Treaty 1994, on 6 July 1994. The representatives of...
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decisions that affect the pace of growth, the quality of life, the level of taxation and the value of land in the community. Most homeowner associations are...
liable to pay tax more than once on the same income. New Zealand has doubletaxation agreements with various countries that set out which country will tax...
leaving Hong Kong can incur doubletaxation on the unrealized capital gains of their vested shares. The Hong Kong taxation of capital gains on employee...
there is a set of bilateral measures pursued thorough treaties or doubletaxation agreements (DTAAs), this can be done via various clauses. Courts around...
Retrieved 30 May 2017. Tremlett, Giles (2011-12-27). "Andorra gets a taste of taxation". The Guardian. London. Archived from the original on 2012-11-20. Retrieved...
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28 July 2011. "The DoubleTaxation Relief (Caricom) Order" (PDF). Legal Supplement. 33 (273). 28 December 1994. "No DoubleTaxation on Earnings Under CSME"...
form a separate layer of tax environment that augments the Code. Doubletaxation of dividends is completely eliminated when a Russian shareholder owns...
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a rate of a dollar per credit, thereby effectively eliminating the doubletaxation of company profits. In India, a company declaring or distributing dividends...
appropriate withdrawal taxes and penalties) and may not be replaced. Doubletaxation still occurs within these tax-sheltered investment arrangements. For...
income, although U.S. tax law provides measures to reduce or eliminate doubletaxation issues for some, namely exemption of earned income (up to an inflation-adjusted...
which it is made and others. Argentina has agreements on avoidance of doubletaxation with countries such as Australia, Austria, Belgium, Bolivia, Brazil...
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investments by eliminating doubletaxation. Under the X Tax, financial transactions and instruments are not subject to taxation for both individuals and...
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