How do governments assess and collect taxes on foreign income?

Governments assess and collect taxes on foreign income by enforcing international tax law. The U.S. government collects taxes on the foreign income of U.S. citizens and residents. This means that if a person lives in the United States but earns income from outside the country, the U.S. government will still collect taxes on that income. In California, the Franchise Tax Board (FTB) is responsible for assessing and collecting taxes on foreign income. The FTB requires individuals to report their foreign income and to pay state taxes on it. The FTB requires these individuals to file state tax returns, pay taxes, and submit any documentation related to the foreign income. For corporation and partnerships, the FTB assesses and collects taxes on foreign income by applying the same principles as they do on domestic income. The FTB will look at the source of the income, the source of the capital, and the residence of the business entity in order to determine the taxes due on foreign income. The FTB will also analyze the foreign tax credits that are available and the extent to which taxes can be reduced. In order to ensure compliance with international tax law, the FTB may conduct audits on corporations or partnerships who have foreign income. These audits can provide information on the structure of foreign income and the amount of taxes owed. Additionally, the FTB may require companies to provide additional documentation in order to assess the correct amount of taxes due.

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How do governments assess and collect taxes on foreign income?

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