What are the primary types of international tax structures?
International tax structures refer to the way in which an individual or company is taxed based on their income earned abroad. There are several different types of international tax structures that can be used. The most common type of international tax structure is called a territorial tax system. This is where income earned by an individual or company outside of the country is not taxed by the government of the country. Instead, it is taxed by the country in which the income is earned. This system is beneficial for those wanting to do business abroad, as it can make it cheaper to operate a foreign business. Another type of international tax structure is a residence-based tax system. This system taxes an individual or company based on the countries in which they reside. This means that a person or company who resides in multiple countries may be taxed in each of those countries, depending on where the income is earned. Finally, there is the worldwide tax system. This system taxes an individual or company based on their worldwide income, regardless of where it was earned. This system is not commonly used, as it can lead to double taxation of some individuals or companies. Each type of international tax structure can have its advantages and disadvantages, so it is important to research each system in order to make the best decision for your individual or business needs.
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