It is also possible that more than two countries are involved, for example. B that a national of a country may live in the United Kingdom and have foreign income from a third country. Contact HM Revenue and Customs (HMRC) or get business tax help if you are unsure or need help with double taxation relief. Governments have acknowledged that this would be unfair and discourage international trade/international affairs. Therefore, they each created their own rules to prevent the same income from being taxed twice. In some cases, the amount of tax paid in one country may be deducted from the tax rate due in another country. These agreements or contracts are called double taxation treaties (ASAs) and should be included in your tax planning system. When taxes are due in both countries, the credit is limited to the reduction of UK taxes suffered and the home country`s tax debt to the same income, which effectively means that you always end up paying at the higher of the two total rates. Different countries have their own tax laws.
Just because you pay taxes in one country doesn`t necessarily mean you don`t have to pay taxes in another country. International students studying in the UK should be aware of the application of specific tax and social security rules as well as specific visa rules. Each case is different and students should approach the International Council of Students or a professional specializing in international taxation to refine their tax debt. Every double taxation treaty is different, although many very similar guidelines follow, even if the details are different. Where you are established in the Treaty is determined by applying a series of “Tie Breaker” tests, as described in the corresponding double taxation agreement with the United Kingdom. Our collection includes numerous articles and books on double taxation, international taxation and residence issues. United Kingdom Tax Treaties Alastair Munro, 2013 This work focuses on the practical interpretation of UK double taxation treaties and national double taxation exemption rules. The introduction provides the historical context of double taxation, a useful overview of the fundamental principles and examples of double taxation of income and capital gains tax. .