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A reduction of tax (credit) is often provided in income tax systems for similar income taxes paid to other countries (foreign taxes). [1] [additional citation(s) needed] This is generally referred to as a foreign tax credit. Amounts in excess of income tax are usually nonrefundable. [2]
A new income tax law, passed in 1997 and effective 1998, determined residence as the basis for taxation of worldwide income. [169] The Philippines used to tax the foreign income of nonresident citizens at reduced rates of 1 to 3% (income tax rates for residents were 1 to 35% at the time). [170]
According to the International Monetary Fund's External Debt Statistics: Guide for Compilers and Users, "Gross external debt, at any given time, is the outstanding amount of those actual current, and not contingent, liabilities that require payment(s) of principal and/or interest by the debtor at some point(s) in the future and that are owed to nonresidents by residents of an economy."
Foreign persons are generally exempt from U.S. tax on capital gains. [6] Under FIRPTA, however, foreign persons are subject to tax on gains from disposition of U.S. real property interests (USRPIs). An interest in property is any direct equity interest in the property, such as a fee simple ownership, but does not include interests solely as a ...
Countries may reduce or avoid double taxation either by providing an exemption from taxation (EM) of foreign-source income or providing a foreign tax credit (FTC) for tax paid on foreign-source income. The EM method requires the home country to collect the tax on income from foreign sources and remit it to the country where it arose.
U.S. tax on this income was avoided until the tax haven country paid a dividend to the shareholding company. This dividend could be avoided indefinitely by loaning the earnings to the shareholder without actually declaring a dividend, because interest on the loans could be deducted and such interest payments would not be considered income.
Rules vary by jurisdiction and by balance of total payments due. Federal employment tax payments are due either monthly or semi-weekly. [24] Federal tax payments must be made either by deposit to a national bank or by electronic funds transfer. If the balance of federal tax payments exceeds $100,000, it must be paid within one banking day.
So, the actual tax burden in Switzerland after the application of the refund procedure is EUR 50. Now if the Greek domestic tax on the inbound interest income is 10%, it would in principle be levied on a gross basis, i.e. the tax base would be the full amount of interest income received (EUR 500). The Greek tax liability would be 500*0.10=50.