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DIVIDENDS AND BILATERAL TREATY

This topic has 1 reply, 2 voices, and was last updated 11 months ago by John Moffat.

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February 25, 2022 at 7:39 am #649309
shaunak22
Participant
- Topics: 218
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lets say company A(PARNET COMPANY) pay 25% tax and company B(SUBSIDAIRY) pays 20% tax and also there is a bilateral treaty between them when the subsiairy remits dividends to parent company there have to pay 10% tax on dividends.
DOUBT – in this case when the A(PARNET COMPANY) pay the additioanl 5% taxx on the profits of the company B(SUBSIDAIRY) would it subtract the tax that the company B already paid on the remittance of dividends?
February 25, 2022 at 9:22 am #649319
John Moffat
Keymaster
- Topics: 56
- Replies: 51585
No. The tax paid on the remittances of dividends is not taken into account in calculating the extra tax on the profits (unless the question was to specify different rules).
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