How do governments tax the income of non-residents?

In the United States, each state has its own individual international tax law. In the state of California, the international tax laws are governed by the California Revenue and Taxation Code. Under American law, the federal government generally taxes all income of US citizens, regardless of the location of residence. However, when it comes to income earned by a non-resident, the laws concerning taxation become a bit murkier. Generally, the earning of a non-resident will be taxed by the federal government if it is received from a US source. This includes income from real estate, dividends, and investments in the US, as well as from any employment in the US. When it comes to California’s international tax laws, the state adheres to the Principle of Worldwide Taxation. This means that non-residents are taxed on any income generated in the state, in addition to certain kinds of income from sources outside of California. This includes wages from employment within the state, as well as real estate and investment income from sources within the state. In addition, California has a second type of taxation for non-residents called the Followed Income Tax. This means that the non-resident must pay taxes on income earned in California, even if it is not directly deposited in their account in the state. Ultimately, the laws governing international tax laws in California or any other US state can be complex and vary depending on the situation. It’s always best to contact a tax professional in order to ensure that all legal obligations are met.

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How do governments tax the income of non-residents?

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