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Foreign Tax Credits

FOREIGN TAX CREDITS

Even if there is no double taxation agreement in place between your country of residence and the country where the income arises, tax relief may be available by means of a foreign tax credit.

For example, if you pay tax at 15% on your foreign income in the country in which the income arises, then you may still have to pay tax in the country of your tax residence If the tax rate there is 20%, you would only have to pay 5% of tax there, as you would be given a tax relief for the 15% of tax paid overseas.

In some cases, foreign income is even tax-free in your country of residence. Speak to us to find out more.

DTA – DOUBLE TAXATION AGREEMENTS

Different countries have their own tax laws. If you are a resident in one country and have income and gains from another, you may have to pay tax on the same income in both countries – or none of them. DTA – Double Taxation Agreements aim to avoid ‘double taxation’ or double non-taxation.

For example, an individual who is resident in Belgium, but has rental income from a property in another country, may have to pay tax on the rental income in both in Belgium and that other country. You may then obtain Foreign Tax Credits for tax paid on rental income, deductible from your tax bill at home.

To avoid double taxation (and of course a double non-taxation), many countries entered into Tax Treaties (DTA), mainly based on international OECD-Standards.

For an individual Tax Consultation fill up the form.


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