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Aug 6th, 2022
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How to work in detail in the Tax Agreement

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[Music] hello and welcome once again to Dubai so were gonna talk today a little bit about the subject of tax reduce which is kind of ironic because countries like divide dont have a lot of tax treaties normally so the reason for this is because specifically were talking with double tax treaty okay so whats the deal with the devil tax treaty its designed to avoid double taxation please sometimes call it a dta or at double tax agreement and these are specific theyll talk about like a treaty for the avoidance of double taxation so what would normally happen what could potentially happen is that I have lets say ignore Dubai for a minute lets divide zero tax which is why they usually dont have tax treaties lets say that were talking about between Canada and the US okay so somebodys doing business in both different places right maybe they have a company thats from Canada but they have an office or something in the US so the US wants to tax them based on that office thats a sourc

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For example, if a country agrees to a 5 per cent rate of tax on interest under Article 11 (Interest), its tax on interest paid by residents of the country to lenders resident in the other country will be limited to 5 per cent of the total interest paid and the other countrys tax revenues will be whatever its tax rate
In general, in order to be eligible for a tax treaty in the US, a person must meet the following criteria: 1) be a resident of a country that has a tax treaty with the US, 2) be a Non-Resident Alien for Tax Purposes in the United States, 3) currently be earning qualifying income in the United States, and 4) have a US
The United States has tax treaties with a number of foreign countries. Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U.S. taxes on certain items of income they receive from sources within the United States.
To qualify for treaty exemption, you must be a citizen or a permanent resident (generally, a noncitizen who files a resident income tax return) of the treaty country, and the type of payment must be exempt under that specific treaty.
Tax treaties generally allow you to exclude a specified amount of U.S.-source income on their U.S. tax return. This in turn reduces the tax liability because you do not have to pay taxes on that amount.
Some of the states that do not allow treaty benefits are: Alabama, Arkansas, California, Connecticut, Hawaii, Kansas, Kentucky, Maryland, Mississippi, Montana, New Jersey, North Dakota, and Pennsylvania.
The W-8BEN form lets you benefit from the US Internal Revenue Service (IRS) treaty rate with the UK. This lowers the withholding tax for qualifying dividends and interest from US shares from 30% to 15%.
Form 8233 must be filed by all non-resident aliens who are seeking a withholding tax exemption for compensation based on a tax treaty between the United States and the person`s home country.

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