Double taxation

[deleted390966]

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How does double taxation work when you work overseas? And how does student loan repayment work when you work overseas?

Anyone with knowledge on the topics, please chime in! Thank you.

 

[NoLollipops4U]

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[James Martin]

There is a risk that your income may be taxed twice if two countries have the right to tax your income because, for instance:

1) You live in one EU country but work in another (cross-border commuter
2) You are posted abroad for a short assignment
3) You are living and looking for work abroad and have transferred unemployment benefits from your home country
4) You have retired to one country and receive a pension from another

Fortunately, however, most countries have double tax agreements . These agreements usually spare you from double taxation:

Under many bilateral tax agreements, the amount of tax you paid in the country where you work will be offset against the tax you owe in your country of residence.
In other cases, the income earned in the country where you work might be taxable only in that country and exempt from tax in your country of residence.

In order to claim relief from double taxation you may need to prove where you are resident and that you have already paid taxes on your income. Check with the tax authorities what proof and which documents you need to submit.

 

[NoLollipops4U]

There is a risk that your income may be taxed twice if two countries have the right to tax your income because, for instance:

1) You live in one EU country but work in another (cross-border commuter
2) You are posted abroad for a short assignment
3) You are living and looking for work abroad and have transferred unemployment benefits from your home country
4) You have retired to one country and receive a pension from another

Fortunately, however, most countries have double tax agreements . These agreements usually spare you from double taxation:

Under many bilateral tax agreements, the amount of tax you paid in the country where you work will be offset against the tax you owe in your country of residence.
In other cases, the income earned in the country where you work might be taxable only in that country and exempt from tax in your country of residence.

In order to claim relief from double taxation you may need to prove where you are resident and that you have already paid taxes on your income. Check with the tax authorities what proof and which documents you need to submit.

I posted before but deleted my comment after realizing it wasn't detailed enough. In case someone happens to read this who's FROM ANOTHER COUNTRY, but working IN THE US......double taxation can still occur in California and New Jersey. At a US federal level they usually honor these tax treaties. However, at a state level they do not have to......and so California and New Jersey have decided to take full advantage of that. Thus you may get a tax credit for federal income tax, but still have to pay the state income tax.

Also, you use your foreign tax income as a tax credit when filing tax returns in your home country (assuming you are still considered a resident in that home country) if your country has a treaty with the foreign country where you work.