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Double Taxation Avoidance Agreements

In a globalized economy, cross-border income often faces double taxation, where both residence and source countries claim taxing rights. Double Taxation Avoidance Agreements (DTAAs) resolve this by defining rules, offering reliefs through exemption or credit methods, and ensuring businesses arenu2019t taxed twice. Claiming tax credits under DTAA requires compliance with treaty provisions, accurate documentation. SKMC Global helps businesses navigate these complexities, optimize tax credits, and ensure seamless international tax planning.

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Double Taxation Avoidance Agreements

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  1. DOUBLE TAXATION AVOIDANCE AGREEMENTS In today’s global economy, cross-border trade and investments often expose taxpayers to double taxation, where the same income is taxed in two jurisdictions. Double Taxation Avoidance Agreements (DTAAs) resolve this by defining taxing rights and offering reliefs like tax credits, making them vital for efficient international tax planning. RELIEF METHODS UNDER DTAA Exemption Method – Income taxed in one country is exempt in the other, avoiding double taxation. Credit Method – The home country allows credit for taxes paid abroad, with DTAAs ensuring effective tax relief. NATURE AND SCOPE OF DOUBLE TAXATION AVOIDANCE AGREEMENTS 1.Reciprocal Agreements – DTAAs are bilateral arrangements between two countries to allocate taxing rights. 2.Income Coverage – They apply to various income streams such as dividends, interest, royalties, technical service fees, business income, and capital gains. 3.Model Conventions – Though formats differ, most treaties are based on OECD and UN Model Tax Conventions. 4.Certainty in Taxation – A well-drafted DTAA provides clarity on where taxes are payable. 5.Investment Facilitation – By reducing double taxation and tax evasion risks, DTAAs encourage cross-border trade and investment. At SKMC Global assists businesses in navigating Double Taxation Avoidance Agreements by identifying eligible tax credits and ensuring accurate compliance. Our expertise streamlines the claim process, helping companies minimize tax burdens and optimize international tax planning. +91 989-125-5499 info@skmcglobal.com www.skmcglobal.com

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