INTRODUCTION The purpose of this paper is to provide a means to minimize or eliminate double taxation through double taxation relief, to reduce the risk of under taxation by promoting cooperation among countries. As far as we know lower overall taxation encourages trade and investment as well as opportunity for growth and profits. The possibility of double taxation arises when two or more countries claim simultaneous jurisdiction to tax the same income. There is some …showed first 75 words of 3605 total…

…showed last 75 words of 3605 total…after credit 66,500 Total tax (66,500+57,500) 124,000 Item-by-item limitation Country A tax before credit 114,000 Credit: (a) Country X (i) Business income Less: (1) Foreign tax of 45,000 (2) Country A tax on Country X Income (0, 30*100,000=30,000) 30,000 (ii) Dividends Less: (1) Foreign tax of 1,000 (2) Country A tax on Country X Income (0, 30*20,000=6,000) 1,000 (b) Country Y Less: (1) Foreign tax of 10,000 (2) Country A tax on business Income (0, 30*50,000=15,000) 10,000 (c) Country Z Less: (1) Foreign tax of 15,000 (2) Country A tax on internet Income (0, 30*10,000=3,000) 3,000 Country A tax after credit 71,500 Total Tax (71,500+57,500) 129,000