Why do joint-stock companies pay double taxes? What exactly does double taxation mean?

The reason of international double taxation is the legal conflict that occurs because the tax jurisdiction between countries repeatedly exercises power over the same tax object or tax source.

(1) There are two reasons for legal international double taxation: the internationalization of taxpayers' income and the popularization of income tax systems in various countries; Conflicts between countries in exercising tax jurisdiction.

(2) Reasons for economic international double taxation: It is called double taxation to levy enterprise income tax first and then individual income tax on the same income. If the company and shareholders are not in the same country, there will be international double taxation.

Extended data (1) dividend deduction system, that is, when corporate income tax is levied, dividends are deducted from the company's taxable profits, and only personal income tax is levied on dividends of company shareholders, thereby exempting or reducing dividends.

(2) Split tax rate system, that is, enterprise income tax is levied at different tax rates on profits used for dividend distribution and profits not used for dividend distribution. The former has a low tax rate and the latter has a high tax rate. The characteristic of split tax rate system is that when shareholders pay income tax on dividends distributed to them, the tax rate is the same as other income, thus alleviating the contradiction of economic double taxation by reducing the corporate tax burden.

(3) Share conversion system refers to the dividend distribution of after-tax profits after the company pays enterprise income tax according to law. For shareholders who are domestic residents, the state treasury will refund the tax paid by the company according to a certain proportion of the dividends received, and then collect income tax from shareholders according to the sum of dividends and tax refund at the applicable tax rate. The tax balance is the net dividend income.

(4) Combine the domestic parent company and foreign subsidiaries to file tax returns, and reduce the income tax of the parent company by deducting the income tax paid by the subsidiaries in the source country, so as to avoid international double taxation.

(5) Indirect credit for enterprise income tax levied by foreign countries.

Baidu Encyclopedia-Double Taxation