Double taxation agreements are at the heart of many international tax relationships. Whether you're a tax lawyer, in-house counsel, or a member of a legal department, you've likely already encountered the need to produce a translated version of these texts. But be careful: their translation should never be entrusted to a general translator.
Why translate a double taxation agreement?
Double taxation agreements aim to prevent the same company or individual from being taxed twice on the same income in two different countries. These texts are crucial for determining the tax rules applicable to cross-border situations, whether involving dividends, employee income, or industrial profits.
Translation occurs in several cases:
- When a foreign taxpayer must prove to the local tax administration the conditions of taxation provided for by the agreement,
- In the event of a dispute between two States or two taxpayers on the interpretation of the treaty,
- In an international tax dispute where the judge or authority requires a version in its procedural language.
A translation with high technical requirements
Double taxation agreements are drafted in precise legal and tax language, often in several authentic language versions (e.g., French/English). Even the slightest discrepancy in terminology can lead to misinterpretation or rejection of the document by the relevant administration.
Here are some specific translation challenges:
- Respect for the tax terminology specific to each State,
- Consistency with official versions of the agreement,
- Mastery of bilateral concepts such as “tax residents”, “permanent establishments” or “methods of elimination of double taxation”,
- Adaptation to the administrative or judicial practices of the recipient country.
The importance of a specialized legal translator
Entrusting this type of translation to a non-specialist translator exposes you to significant risks: rejection of the document, errors of interpretation, delays in procedures or, worse, unjustified tax adjustments.
A translator specializing in international tax law is familiar not only with the terminology but also with the intricacies of interpreting tax treaties. They are able to faithfully convey the legal meaning of texts and ensure that the translation is appropriate for the intended purpose (evidence, procedure, litigation, etc.).
Concrete case: a French company facing German tax authorities
Let's imagine a French company receiving dividends from its German subsidiary. To benefit from the exemption provided for by the Franco-German double taxation agreement, it must provide proof that the income was taxed in Germany. The French tax authorities require a certified translation of the relevant article.
An imprecise translation – for example confusing “withholding tax” and “corporate tax” – could lead to the exemption being refused, resulting in unjustified double taxation.
Legal 230's expertise at your side
At Legal 230, we are experts in the translation requirements specific to double taxation agreements . Our network of tax translators works exclusively into their native language, relying on official versions and applicable legal doctrine. Our goal is to provide you with accurate translations that can be used before any authority or jurisdiction.
Need to translate a tax agreement or extract for your client or case? Call on our team dedicated to legal translation in tax law . Contact Legal 230 for fast, expert support for your sensitive documents.