What is the effect of Australia's Double Tax Agreements (DTAs) with other countries, such as the United States?
A) The DTAs contain tie-breaker rules to determine the country of residency and so the country that has the taxing rights to certain income. The provisions of DTAs override domestic law to the extent of any inconsistency.
B) The DTAs allow two countries to tax the same income without any corresponding foreign tax credit or offset
C) Where the terms of a DTA conflict with provisions of Australia's domestic tax law, the provisions of Australia's domestic law prevail
D) The DTAs promote the double taxation of income

Question

Quizplus · Accepted Answer

DTAs are designed to prevent double taxation and resolve issues of tax residency by establishing which country has the right to tax certain income. They include tie-breaker rules for determining tax residency and override domestic laws where there is inconsistency, ensuring that taxpayers are not subject to double taxation on the same income.

What Is the Effect of Australia's Double Tax Agreements (DTAs)