Double Taxation Relief
Date Submitted: 06/02/2004 00:53:48
Category: / Business & Economy / Accounting
Length: 13 pages (3605 words)
Category: / Business & Economy / Accounting
Length: 13 pages (3605 words)
INTRODUCTION
The purpose of this paper is to provide a means to minimize or eliminate double taxation through double taxation relief, to reduce the risk of under taxation by promoting cooperation among countries. As far as we know lower overall taxation encourages trade and investment as well as opportunity for growth and profits. The possibility of double taxation arises when two or more countries claim simultaneous jurisdiction to tax the same income. There is some …
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…after credit 66,500
Total tax (66,500+57,500) 124,000
Item-by-item limitation
Country A tax before credit 114,000
Credit:
(a) Country X
(i) Business income
Less:
(1) Foreign tax of 45,000
(2) Country A tax on Country X
Income (0, 30*100,000=30,000) 30,000
(ii) Dividends
Less:
(1) Foreign tax of 1,000
(2) Country A tax on Country X
Income (0, 30*20,000=6,000) 1,000
(b) Country Y
Less:
(1) Foreign tax of 10,000
(2) Country A tax on business
Income (0, 30*50,000=15,000) 10,000
(c) Country Z
Less:
(1) Foreign tax of 15,000
(2) Country A tax on internet
Income (0, 30*10,000=3,000) 3,000
Country A tax after credit 71,500
Total Tax (71,500+57,500) 129,000
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