What are the benefits for me as an entrepreneur in avoiding double taxation?
July 25, 2024 | 120,00 EUR | answered by Guido Hoffmann
Dear Tax Advisor,
I am running a medium-sized business and am currently dealing with the issue of double taxation. I have heard that there are ways to avoid this and would like to learn more about it.
Currently, I am already paying taxes on my business profits in my home country. However, I am planning to expand into another country and conduct business there as well. I am concerned that I may have to pay taxes on my profits there again, which could lead to double taxation.
I would like to find out what benefits there are for me as a business owner if I avoid double taxation. What tax savings could I achieve and how could I implement them? Are there specific tax agreements or regulations that could help me in this regard?
I want to ensure that I operate my business efficiently and cost-effectively while also considering tax aspects. Therefore, it would be very helpful for me if you could provide me with specific solutions and recommendations on how to avoid double taxation.
Thank you in advance for your support and expertise.
Sincerely,
Alwin Siebert
Dear Mr. Siebert,
Thank you for your inquiry regarding double taxation. As a tax advisor with expertise in this area, I am happy to assist you and provide some options to avoid double taxation.
Double taxation occurs when a taxpayer is required to pay taxes in two different countries on the same income. This can occur at both the corporate and personal level. To avoid this, there are various tools and measures that you, as a business owner, can utilize.
One way to avoid double taxation is through double taxation agreements (DTAs) that are negotiated between different countries. These agreements determine which country has the right to tax certain income and which methods of credit or exemption can be used to prevent double taxation.
Another tool to avoid double taxation is transfer pricing. By setting appropriate prices for goods and services within a group, profits can be allocated in a way that avoids double taxation.
Additionally, international holding structures or choosing the right company location can also help avoid double taxation. By using holding companies in countries with favorable tax regulations, tax burdens can be optimized and double taxation can be avoided.
It is important to note that the avoidance of double taxation must always comply with national and international tax laws. Therefore, I recommend discussing your specific situation with me in a personal consultation so that I can provide tailored solutions taking into account all relevant tax aspects.
I hope this information is helpful to you and I am available to answer any further questions.
Sincerely,
Guido Hoffmann, Tax Advisor
