Double taxation Agreements

Double Taxation Agreements (also known as Double Taxation Treaties), are agreements between two countries designed to protect against the risk of double taxation where the same income is taxable in both countries.

The country where taxes are due to be paid is generally defined by the Double Taxation Agreement in force.

If a Double Taxation Agreement exists between two countries the contractors’ tax is withheld at the higher rate of the two states involved, namely, those of the work country and the state where the contractor is ordinarily resident for tax purposes.

Where the stay in the work country is less than 183 days, taxes are generally payable in the home country. If the stay is for more than 183 days then taxes are normally payable in the work country with effect from the start of the work. Access Financial will advise the contractor how to best utilise the tax treaties in place and maximise their take home pay.

There are more than 1,300 Double Taxation Treaties worldwide.