Cross-Border Tax Solutions: US-Canada Double Taxation Avoidance
No one wants to be taxed twice; that’s why there is a tax treaty between the US and Canada to avoid double taxation. The US has agreements with several countries to align tax laws and resolve the issue of double taxation. In addition, there are a couple of other methods, like Foreign Income Exclusion and Foreign Tax Credits, that also enable citizens of the US and Canada to avoid double taxation. To improve your knowledge of double taxation and how to avoid it, here is a comprehensive guide from Sal Accounting. Table of Contents What is Double Taxation? How can you Avoid Double Taxation Between the US and Canada? Conclusion FAQs What is Double Taxation? US citizens and Canadians are taxed on their worldwide income. Citizens of both countries have to report their foreign income irrespective of where they file a tax return, whether in Canada or the US. This means a US citizen earning in Canada will have to pay taxes to the Canada Revenue Agency and would also pay US taxes to I...