What is a double tax treaty?

This is an agreement between two countries to prevent international double taxation. This occurs when two different states impose a comparable tax on the same potential taxpayer on the same taxable item. Most developed countries have a large number of double tax treaties in place. The UK has over 110. Double tax treaties are in place between all EU/EEA countries.

When going to work on contract abroad, it is important to check that your home country has a double tax treaty with the country where you will be working. If no treaty exists, you should try to ensure that you will be able to acquire a tax certificate which clearly states how much tax you have paid in the country of work. Without this, you run the risk of being taxed twice on the same income.

See also our International Tax Guides.