Cross-Border Taxation

Cross-Border Taxation refers to the taxation of income, assets, or transactions that occur between entities or individuals located in different countries.

This area of taxation is governed by international tax laws and agreements, which aim to prevent double taxation—where the same income is taxed by multiple jurisdictions.

For instance, if a U.S. company operates in Canada and earns income there, both the U.S. and Canadian governments may claim the right to tax that income. To address this, countries often establish treaties to delineate taxing rights and provide credits or exemptions to mitigate the tax burden on taxpayers engaged in cross-border activities.