Introduction
Double taxation arises when an individual or business acquiring income in a foreign country is required to pay taxes on that income in both the foreign country as well as the country of origin. For example, an American company operating in a developing country, in the absence of a tax treaty between the two countries may have to pay a withholding tax to the government of the developing country, as well as corporation tax to the United States government (Howard, 2001, p. 259).
The purpose of this paper is to examine the merit of three basic systems, which is exemption system, credit system and deduction system. These systems are dealings with the essence of tax relief from international double taxation.
A discussion of various countries on their practices on tax relief system and the rationale for using the system will be presented, followed by an analysis of the most advantages system to taxpayers. Finally identifies the system that most preferred by countries......
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Approximate Word Count: 1713
Approximate Pages: 7 (260 words per double-spaced page) |