There are two primary taxes imposed on profits earned by corporations in international trade. One is the corporate income tax. What is the other type of tax on earnings of multinational corporations?

Question

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The other type of tax on earnings of multinational corporations is the withholding tax. This tax is imposed on income earned by a non-resident company in a foreign country and is withheld by the country before the income is remitted back to the home country of the company. The purpose of this tax is to ensure that the foreign company pays taxes on its income earned within the jurisdiction of the country where it operates.

There Are Two Primary Taxes Imposed on Profits Earned by Corporations