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CA Final Double Taxation — practice questions

Explore 94 free Double Taxation questions in CA Final Taxation. Open each question or exercise to read its content, reference answers and available explanation.

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Double Taxation questions and exercises with answers

Showing questions 1–30 of 94.

What is double taxation of income?Read the answer and worked solution →Which of these is a recognised form of double taxation?Read the answer and worked solution →Economic double taxation arises when the same income is taxedRead the answer and worked solution →Which two sections of the Income-tax Act, 1961 give relief from double taxation?Read the answer and worked solution →Section 90 relief covers tax paid in a country thatRead the answer and worked solution →A DTAA may cut tax deducted on NRI deposit interest from 30 percent to aboutRead the answer and worked solution →Under the exemption method, foreign income isRead the answer and worked solution →Which method credits tax paid abroad against domestic tax?Read the answer and worked solution →Countries taxing world income of residents usually useRead the answer and worked solution →Territorial-principle countries usually depend on which method?Read the answer and worked solution →A DTAA between two countries is mainly meant toRead the answer and worked solution →Most tax treaties follow the model convention of theRead the answer and worked solution →Treaties with developing countries more often follow the model of theRead the answer and worked solution →Who can generally claim the benefits of a tax treaty?Read the answer and worked solution →Treaty business profits are taxed abroad only via aRead the answer and worked solution →A permanent establishment is best described asRead the answer and worked solution →Which article of the OECD Model defines a PE?Read the answer and worked solution →Which type of PE is added by the UN Model Convention?Read the answer and worked solution →A construction or project PE exists only if the siteRead the answer and worked solution →A storage facility used solely for delivery of goods to customersRead the answer and worked solution →Which agent's activities generally do not create a PE for the principal?Read the answer and worked solution →A fixed place of business needs the business carried onRead the answer and worked solution →BEPS Action 7 deals with preventingRead the answer and worked solution →BEPS Action 15 is concerned with developing aRead the answer and worked solution →Under the OECD tie-breaker for an individual resident in both states, the first test isRead the answer and worked solution →With homes in both states, a person is resident whereRead the answer and worked solution →If the centre of vital interests cannot be found, the next tie-breaker test isRead the answer and worked solution →With habitual abode in both states or neither, residence is decided byRead the answer and worked solution →If nationality is shared or absent, the issue is settled byRead the answer and worked solution →The pre-2017 OECD tie-breaker for a non-individual used itsRead the answer and worked solution →

Worked practice questions

What is double taxation of income?

  1. Tax on salary levied twice a year by one state
  2. A rebate for tax already paid abroad
  3. Tax paid by two partners on a single firm
  4. Tax on one income by two or more jurisdictions
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Correct answer: D. Tax on one income by two or more jurisdictions

Double taxation arises when more than one jurisdiction taxes the same income, asset or transaction.

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Which of these is a recognised form of double taxation?

  1. Tax on a gift followed by an exemption
  2. Tax on salary and a rebate on that salary
  3. Tax on a firm's profit and again on its dividend
  4. Tax on exports and a refund of the same
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Correct answer: C. Tax on a firm's profit and again on its dividend

Company profit taxed in the company and again as dividend in shareholders' hands is economic double taxation.

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Economic double taxation arises when the same income is taxed

  1. twice over in the hands of one person
  2. in two states in different persons' hands
  3. only after a tax treaty has been signed
  4. only in the country of residence abroad
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Correct answer: B. in two states in different persons' hands

In economic double taxation the same item is taxed in two or more states but in the hands of different persons.

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More Taxation topics

Transfer PricingDeduction, Collection and Recovery of TaxIncome Tax DepartmentPermanent Account NumberBasic ConceptsAnti-avoidance ProvisionsAppeals, Revision and Dispute ResolutionSpecial Tax Regimes for Companies