Bilateral Tax Agreement

AAA

DEFINITION of 'Bilateral Tax Agreement'

An arrangement between two jurisdictions that mitigates the problem of double taxation that can occur when tax laws consider an individual or company to be a resident of more than one jurisdiction. A bilateral tax agreement can improve the relations between two countries, encourage foreign investment and trade, and reduce tax evasion.

INVESTOPEDIA EXPLAINS 'Bilateral Tax Agreement'

Bilateral tax agreements can deal with many issues such as taxation of different categories of income (business profits, royalties, capital gains, employment income, etc.), methods for eliminating double taxation (exemption method, credit method, etc.), and provisions such as mutual exchange of information and assistance in tax collection.

RELATED TERMS
  1. Tax Evasion

    An illegal practice where a person, organization or corporation ...
  2. Tax Home

    The general locality of an individual's primary place of work. ...
  3. Tax Liability

    The total amount of tax that an entity is legally obligated to ...
  4. Tax Shelter

    A legal method of minimizing or decreasing an investor's taxable ...
  5. Tax Treaty

    A bilateral agreement made by two countries to resolve issues ...
  6. Double Taxation

    A taxation principle referring to income taxes that are paid ...
Related Articles
  1. Tax Tips For The Individual Investor
    Retirement

    Tax Tips For The Individual Investor

  2. Surviving The IRS Audit
    Taxes

    Surviving The IRS Audit

  3. Using Tax Lots: A Way To Minimize Taxes
    Taxes

    Using Tax Lots: A Way To Minimize Taxes

  4. Pros And Cons Of Offshore Investing
    Personal Finance

    Pros And Cons Of Offshore Investing

comments powered by Disqus
Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  3. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  4. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center