16:16
yeah most colleges are very liberal with their days off
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Simple English definitions for legal terms
double taxation
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A quick definition of double taxation:
Double taxation is when the same money or property gets taxed twice. This can happen when a company pays taxes on its profits and then shareholders also pay taxes on the dividends they receive from those profits. It can also happen when someone lives in one country but earns money in another country and both countries want to tax that person's income. Some countries have agreements to prevent this from happening to foreign companies or individuals.
A more thorough explanation:
Double taxation is when the same income, assets, or financial transaction is taxed twice at different times. This can happen in two ways:
- Economic double taxation: This happens when a company's earnings are taxed, and then the shareholders' dividends are also taxed. This means that the same money is being taxed twice.
- Legal double taxation: This happens when a person is considered a tax resident in two different countries. Both countries tax the person's income, even though it's the same income. This means that the person is being taxed twice.
For example, let's say a company earns $100,000 in profits. The government taxes the company's profits at a rate of 20%, so the company pays $20,000 in taxes. Then, the company distributes $50,000 in dividends to its shareholders. The government taxes the dividends at a rate of 15%, so the shareholders pay $7,500 in taxes. This means that the same $50,000 is being taxed twice.
Another example of double taxation is when a person lives in one country but works in another. Both countries may consider the person a tax resident and tax their income. This means that the person is being taxed twice on the same income.
To prevent double taxation, many countries have signed treaties with each other. These treaties determine which country the person or company must pay taxes to and create mechanisms for the elimination of double taxation.