There are two major 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

Quizplus · Accepted Answer

The other type of tax on earnings of multinational corporations is the withholding tax, which is a tax imposed on payments made to foreign entities, such as dividends, interest, and royalties. The tax is withheld at the source of the payment, typically by the payer of the income, and is then remitted to the government. This tax is important for ensuring that foreign entities are contributing their fair share to the economy where they are earning income.

There Are Two Major Taxes Imposed on Profits Earned by Corporations