Important aspects of taxation between countries.
When speaking of double taxation, we must take into account that it is a situation in which the same income is taxed more than once by one or more states, or nation, due to the application of each of the tax laws of each country involved. /
On the other hand, double taxation occurs when the place of residence of the taxpayer does not coincide with the place where the income is generated, or when the latter place is different from the country of nationality of the taxpayer./div>
In other words, double taxation occurs when two or more jurisdictions claim the right to tax the same income, which may generate excessive tax burdens for taxpayers and distort economic decisions.
As a result, the linkage criteria used by each State to tax income are not coordinated with each other, which generates a lack of neutrality and affects the decisions of economic agents; and to avoid these problems, many investors move their investments to countries with low or no taxation./div>
Consequently, States try to address these drawbacks through unilateral measures or bilateral or multilateral agreements. In other words, the diversity in the adoption and regulation of tax connecting factors can complicate the resolution of double taxation.