What tax obligations do I have as a company in order to avoid double taxation?
October 31, 2022 | 120,00 EUR | answered by Yvonne Schreiber
Dear tax advisor,
I am Paula Maier, owner of a medium-sized company in the IT consulting sector. In recent years, we have expanded our business relationships abroad and have been growing. In the process, I have noticed that due to our international business activities, we are facing the issue of double taxation.
Currently, we are already paying taxes abroad for our revenues and profits there. Now I am concerned whether as a company, we also need to pay additional taxes in Germany and how we can avoid double taxation.
I would like to know from you what tax obligations we have as a company to avoid double taxation. Are there specific regulations or agreements that we need to consider? What measures can we take to optimize our tax situation and minimize potential risks?
I thank you in advance for your support and look forward to your specific recommendations for avoiding double taxation.
Sincerely,
Paula Maier
Dear Mrs. Maier,
Thank you for your inquiry regarding double taxation in connection with your international business activities. As a tax advisor specializing in international tax matters, I am happy to assist you and provide you with specific recommendations on how to avoid double taxation.
Firstly, it is important to understand what is meant by double taxation. Double taxation occurs when a taxpayer is taxed in multiple countries for the same source of income, leading to a double tax burden. To avoid this, there are various instruments and agreements at the international level.
In your case, as a company with business relationships abroad, it is important to consider the respective Double Taxation Agreements (DTAs) between Germany and the countries where you operate. These agreements determine which country has the right to tax certain types of income and how double taxation can be avoided. It is advisable to familiarize yourself with the specific agreements between Germany and the countries in question and seek professional assistance if necessary.
Furthermore, you should ensure that you submit all relevant tax returns and declarations on time and fulfill all tax obligations in the respective countries. Proper documentation of all business transactions is also crucial to be able to prove, in case of tax audits, that taxes have already been paid abroad.
To optimize your tax situation and minimize potential risks, I also recommend working regularly with a tax advisor who is knowledgeable about international tax issues. They can help you identify tax planning opportunities and adjust your tax strategy accordingly.
I hope this information is helpful to you and I am available for any further questions you may have. Thank you for your trust and I wish you success in avoiding double taxation.
Best regards,
Yvonne Schreiber
