Double taxation agreement

Double Taxation Agreements (DTAs) are international treaties that allow states to avoid the same taxpayer repeatedly charging the same income for the same period with similar taxes. This happens when taxpayers are either simultaneously resident in two states or have sources of income located in countries other than the country of residence. In both cases, each affected state can claim its own tax claim against the taxpayer. In order to avoid double taxation, the state from which income originates (source state), on the one hand, reduces or restricts taxation in favor of the country of residence of the recipient of the income and, on the other hand, the State of residence confers income that can be taxed in the source State on its income Free taxation or credits the foreign tax attributable to that income on his tax.

(Quelle: www.bundesfinanzministerium.de)