Question

In: Finance

List and briefly explain methods of elimination of double taxation.

List and briefly explain methods of elimination of double taxation.

Solutions

Expert Solution

Q: Method of Elimination of Double Taxation.

Ans:There are two method of mainly for avoidance of double taxation

Meaning of Double taxation: When income is taxed more than once for the taxable income sources.

a Exemption Method:- We will use exemption method of tax elimination when if required by Tax treaty.

Full exemption method:- when the income which is taxed in state A or B is not taken by state C for the purpose of its tax, State C is not entitled for taking that income for exemption consideration while determining tax to be imposed. it is called full exemption.

Exemption Regression :- The income for tax calculation taken by State A or B is not taxed by state C , but state C have the right to take that income for income tax consideration for rest income. which is called as exemption regression.

b: Credit Method:- In credit method foreign source income is taxed in domestic country, but at abroad tax deduction is granted to person concerned.

Full credit method:- Country A allows the income for tax deduction that is paid in another country. which is taxed in another country.

Ordinary Credit method:- In this method partial or restrictive allow of deduction is granted to that appropriate amount which is proportionately applicable to both countries.

In other word that part od tax deduction in granted to country A which is allowed to be taxed in another country in a same proportionate.


Related Solutions

List and briefly explain methods of elimination of double taxation!
List and briefly explain methods of elimination of double taxation!
List and briefly explain methods of elimination of double taxation!
List and briefly explain methods of elimination of double taxation!
List and briefly explain methods of of elimination of double taxation!
List and briefly explain methods of of elimination of double taxation!
List and briefly explain the three basic appraisal methods
List and briefly explain the three basic appraisal methods
Briefly state and describe the general approaches to taxation that countries can adopt. What is “Double...
Briefly state and describe the general approaches to taxation that countries can adopt. What is “Double Taxation” and how its burden might be eliminated or reduced? What are “Foreign Tax Credit,’ “Foreign Tax Deduction,” and “Foreign Tax Credit Limitation”? What is “Transfer Pricing” and how could it be used to reduce worldwide tax obligations?
Double taxation and any tax advantages to incorporating
Double taxation and any tax advantages to incorporating
What is the meaning of Taxation as define in the unit? List and explain at least...
What is the meaning of Taxation as define in the unit? List and explain at least 3 objectives of Taxation? What is the difference between Progressive Tax System and Regressive Tax System? List and 10 criteria of a Good Tax System? Describe the 3 objectives of tax policy? What is the meaning of Residence, Domicile and non-residence? List at least 3 rules that are used to determine residence of an individual? From a tax point of view what is the...
List and briefly describe the four different methods of forecasting available.
List and briefly describe the four different methods of forecasting available.
What does double taxation of corporate income mean?
What does double taxation of corporate income mean? Could income ever be subject to triple taxation? Explain your answer.
Explain the dividend imputation process conceptually. Highlight the differences between a classical (i.e. double) taxation system...
Explain the dividend imputation process conceptually. Highlight the differences between a classical (i.e. double) taxation system and a dividend imputation taxation system.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT