Types Of Double Taxation Agreement

International double taxation has a negative impact on trade and services, as well as on capital and the transportation of people. Taxation of the same income by two or more countries would be a prohibitive burden on the taxpayer. The national laws of most countries, including India, alleviate this difficulty by providing unilateral relief to these double-taxed incomes (Section 91 of the Income Tax Act). However, since this solution is not satisfactory, given the diversity of rules governing the determination of sources of income in different countries, tax treaties seek to remove tax barriers to trade and services, as well as capital movements and the movement of people between the countries concerned. It contributes to the improvement of the overall investment climate. In the event of a conflict between the provisions of the Income Tax Act or the Double Taxation Convention, their provisions apply. Double taxation agreements (DBAs) are contracts between two or more countries to avoid international double taxation between income and wealth. The main objective of the DBA is to distribute the right of taxation among the contracting countries, to avoid differences, to guarantee equal rights and security of taxpayers and to prevent tax evasion. Double taxation is often an unintended consequence of tax legislation. It is generally seen as a negative part of a tax system and tax authorities try to avoid it whenever possible.

According to a study carried out by Business Europe in 2013, double taxation remains a problem for European SMEs and a barrier to cross-border trade and investment. [9] [10] Problems include limiting the ability to deduct interest, foreign tax credits, stable settlement issues, and differences in qualifications or interpretations. Germany and Italy have been identified as the Member States where most cases of double taxation have been identified. In the language of the layman, a treaty is a formal agreement between two or more independent nations. The Oxford Companion to Law defines a treaty as “an international agreement, normally in writing, concluded under different titles (treaty, convention, protocol, alliance, Charter, Covenant, Statute, Law, Declaration, Declaration, Concordat, Exchange of Notes, Agreed Protocol, Memorandum of Understanding) between two or more states concluded under international law to create rights and obligations between them and be subject to international law. Examples of contracts are the CTBT, the Vienna Conventions and tax treaties such as the DBAA, etc. Dear Sir, we had provided services to one of our customers in Zambia and our bill to the tune of Now we learned that the customer said he was going to pay after tax deduction. However, we are also in favour of paying income tax for the revenues of the above service. In this case, we have to pay twice as much tax for the same income.

Can you advise us to avoid such double taxation? I would like to know how to deal for DBAA of India the Double Tax Avoidance Agreement (DTAA) is essentially a bilateral agreement between two countries. The main objective was to promote and promote economic exchanges and investment between two countries by avoiding double taxation. 1. Eliminate double taxation, reduce the tax costs of “global” companies.