No Tax Treaty Means Double Taxation?

In this episode, Tytle’s tax expert explores the challenges of managing cross-border taxes without a tax treaty in place. The discussion begins with the role of tax treaties: avoiding double taxation, offering tax relief, and clarifying residency and income rules. Without these agreements, expats face increased risks of being taxed twice on the same income, along with complex filing requirements.

Key topics include how double taxation can arise on different income types, such as employment, rental, dividend, or self-employment income when both countries claim taxing rights. The episode also discusses strategies to avoid double taxation in situations where there’s no treaty. For instance, one could look for domestic rules that allow offsetting foreign taxes, even in the absence of a treaty. Other tools are exemptions for specific income streams, and knowledge of residency criteria to avoid dual residency in the first place. 

Other areas covered include international guidelines like the OECD Model Tax Convention and the impact of social security contributions in the absence of agreements.

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