Tax Treaty Calculator
Calculate tax treaty benefits, withholding tax rates, and international tax liabilities. Compare tax treaties between countries for dividends, interest, royalties, and other income types.
Step 1: Select Countries & Income Type
Understanding Tax Treaties
Tax treaties are bilateral agreements between countries that prevent double taxation and tax evasion. They typically reduce withholding tax rates on cross-border income like dividends, interest, and royalties.
Step 2: Financial Details
Tax Treaty Benefits
Key Benefits: Reduced withholding taxes, prevention of double taxation, dispute resolution mechanisms, and exchange of information between tax authorities.
Common Rates: Dividends: 0-15%, Interest: 0-10%, Royalties: 0-10% under tax treaties.
Tax Treaty Calculation Results
Tax Savings Due to Treaty
International Tax Treaty Rates Comparison
| Country Pair | Dividends | Interest | Royalties | Effective Date |
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Tax Treaty Provisions & Calculations
Withholding Tax Calculation
Formula: Withholding Tax = Income Amount × Withholding Tax Rate
Example: £10,000 × 15% = £1,500 withholding tax under treaty
Foreign Tax Credit
Formula: FTC = min(Foreign Tax Paid, Domestic Tax on Foreign Income)
Purpose: Prevents double taxation by allowing credit for taxes paid to foreign governments
Tax Savings Calculation
Formula: Savings = (Non-Treaty Rate – Treaty Rate) × Income Amount
Example: (30% – 15%) × £10,000 = £1,500 savings
Effective Tax Rate
Formula: Effective Rate = Total Tax Paid ÷ Total Income
Example: £1,500 ÷ £10,000 = 15% effective rate
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