What are the differences between domestic and international taxation?
The difference between domestic and international taxation lies in how a business or individual is taxed and who is responsible for collecting the tax. Domestic taxation applies to businesses and individuals who are based in the same country, such as California, and local laws are responsible for taxation. International taxation applies to businesses and individuals located in different countries, and it is typically governed by an international treaty or agreement. In the case of domestic taxation, taxes are usually collected by the government of the country or states, like in the case of California where taxation is handled by the California Franchise Tax Board. Businesses and individuals pay taxes to the local government in the form of income, sales, and property taxes. In the case of international taxation, taxes are usually collected by the government or officials of both countries involved. This international taxation is regulated by an international tax treaty between different countries or even by organizations like the European Union. These treaties usually determine specific taxation rates, which depend on the type of income, size of business, and the residency of the taxpayer. International taxation is particularly important for businesses that trade internationally or have branches in different countries, as it helps to determine how profits should be distributed among different nations and how much tax is paid. It also helps to avoid double taxation of businesses or individuals, as different countries have different policies for taxation.
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