Double Taxation Treaties

news: Double Taxation Treaties

INCOME FROM abroad is entitled to a tax credit for tax paid internationally, up to the amount owed under IRS regulations.Income is then taxed at Portuguese rates.

Portugal has signed treaties with many countries to help avoid double taxation. If you file in Portugal, yet have income arising in another country, there are likely to be special rules which apply specifically to your situation.Do not assume that just because you pay some tax somewhere that your obligations are met correctly.It is essential to follow the rules of the Tax Treaties as they normally supersede domestic legislation.

What exactly are Double Tax Treaties?Do they help or hurt me?

The Double Taxation Treaties sort out conflicting interests between two jurisdictions: the country where the income arises and the one where the taxpayer is resident. All forms of personal income are considered and it is the treaty that determines which jurisdiction gets to tax which sources of income. The treaty protects you from being taxed twice and normally takes precedence over local law. In addition, treaties open the channels of communication between tax authorities to help combat tax evasion.

• Dennis Swing Greene is an International Fiscal Consultant for EuroFINESCO S.A., with offices in the Algarve and in Lisbon. Appointments may be scheduled in Guia (Albufeira) telephone 289 561 333 or in Lisbon (Chiado) telephone 213 424 210