Multi Country Taxation
Navigating multi-country taxation involves understanding the tax obligations that arise when individuals or businesses operate in more than one country. Here’s a comprehensive guide to the main concepts and strategies
Permanent Establishment (PE)
A fixed place of business through which a foreign enterprise conducts business. Income attributable to a PE is typically taxable in the country where the PE is located.
Tax Treaties
Bilateral agreements that mitigate double taxation and prevent tax evasion. They typically allocate taxing rights between countries and reduce or eliminate withholding taxes on cross-border payments like dividends, interest, and royalties.
Double Taxation
Occurs when two countries tax the same income. For example, a resident of Country A earning income in Country B may be taxed by both countries.
Residence and Source Rules
Countries tax income that originates within their borders, regardless of the taxpayer’s residence.Countries tax the worldwide income of their residents.