Double taxation is a situation where the same income is taxed twice. There are global and national double taxation, national and international double taxation. A situation where the same income is taxed in two states because of residency and of source principles is called international double taxation. National double taxation situation arises when the same income is taxed at the company and at the shareholders’ level.
To avoid double taxation, the parties engage in an international double taxation treaties. The main objectives of international double taxation treaties are the following:
- To allocate taxation rights between the contracting states;
- To set aside an international legal double taxation;
- To prevent from fiscal and tax evasion;
- To avoid tax discrimination.
In business development, establishment of holding companies, business integration, the issue of international double taxation is of particular importance. When choosing the jurisdiction for the newly established company or performing international transactions, the tax issue must be thoroughly examined. Therefore, according to our customers’ needs, we advise on double taxation issues helping to choose the right jurisdiction to start-ups; we also advice on tax issues in international transactions and help with tax optimization.