What does Tax Treaty mean?
Tax Treaty refers to an agreement between two countries that outlines how income earned in one country is taxed when earned by a resident of the other country. Tax treaties are essential for individuals and companies working on international film and TV productions, as they help avoid double taxation on income earned abroad. The treaty may reduce or eliminate taxes for foreign workers, allowing production budgets to stretch further. Related terms include Double Taxation, which occurs when income is taxed in both the country of residence and the country where the income is earned.
Example:A U.S.-based production company filming in the UK benefits from a tax treaty between the two countries, avoiding double taxation on their profits.
Example: An actor working on a film in Canada reviews the tax treaty between their home country and Canada to understand how their earnings will be taxed.
Did You Know?
Many countries have tax treaties specifically designed to make international film and TV production more financially viable!
