also called double tax
Being taxed on the same income by two countries at once.
Double taxation is when two countries both want tax on the very same slice of income. The thing that stops it is usually a treaty or a credit system, so people confuse the problem with its cure: the double taxation treaty is the fix, this is the injury. Left unaddressed, one paycheck can be taxed in the country you earned it and again where you live.
You freelance for a US client while living in Germany. The US wants tax because the client is American, and Germany wants tax because you live there, so without claiming relief you could hand over a cut to both on a single invoice.
Without treaty relief or credits, the same salary or gain can be taxed twice, which is exactly what nomads structure around.
The difference is the whole point, so here is each one in a line.
Double taxation is being charged by two countries on the same income, and a double taxation treaty is the agreement that divides the taxing rights so you get relief, which a certificate of tax residency is the proof you claim it with.
A totalization agreement does the parallel job for social security so you do not pay contributions in both countries, and a certificate of coverage proves which country you are paying into.
Certificate of tax residency · Double taxation treaty · Totalization agreement
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