What is Double Taxation and How Can It Be Avoided?
Double taxation occurs when the same income is taxed by two different jurisdictions. This can happen when a business operates in multiple countries. To avoid double taxation, businesses can make use of:
Double Taxation Agreements (DTAs): Treaties between two countries that outline which country has the right to tax specific types of income. Foreign Tax Credits: Credits that allow businesses to offset taxes paid in one country against taxes owed in another.