How do governments assess and collect taxes on foreign income?

Governments assess and collect taxes on foreign income in several ways. Generally, each government has its own set of rules and regulations when it comes to international tax law. In the United States, the Internal Revenue Service (IRS) sets the rules and regulations around foreign income for both individuals and businesses. For individuals, the IRS taxes the worldwide income of both citizens and residents. This means that if US citizens receive income from any sources outside of the US, such as business earnings, investments, or retirement benefits, they are required to report that income on their tax return. The same holds true for residents of the US who have income from foreign sources. For businesses, the US generally taxes foreign income depending on the type of income. Income earned from foreign investments is taxed under certain conditions, such as if the profits are higher than the cost of the investment. If a business operates in a foreign country, the US may tax the income earned from that country as well. The US also generally taxes foreign-earned income that is moved back to the US. In general, it is important to know and understand the rules and regulations surrounding international tax law as they can vary greatly from country to country. For more information regarding international tax law in New York, it is best to contact the IRS directly.

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How do governments assess and collect taxes on foreign income?

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