What are the primary types of international tax structures?
International tax structures refer to how income earned and/or taxes paid by businesses and individuals are organized and managed. There are three primary types of international tax structures: tax avoidance, tax deferral, and tax exemption. Tax Avoidance is the legal practice of taking advantage of tax regulations to reduce or eliminate a tax liability. Businesses and individuals alike use this type of structure to lower their tax expenditures. However, this can be considered illegal in some countries. Tax Deferral is the practice of delaying tax payments until a later date or paying taxes on the future sale of something at the time of the sale. This allows businesses and individuals to save on taxes in the current year and pay them later when income is expected. Tax Exemption is the practice of not having to pay taxes on certain types of income or transactions. This is usually done for certain types of charities and organizations, as well as returns on investments such as stocks or bonds. Overall, the primary types of international tax structures are tax avoidance, tax deferral, and tax exemption. They are used legally to reduce tax liabilities and help businesses and individuals manage their financial resources. It is important to understand the local tax laws of the country you are operating in to ensure that you are abiding by regulations and staying clear of any potential legal action.
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