Double taxation means that

Question

Quizplus · Accepted Answer

Double taxation refers to a situation where corporate earnings are taxed twice – first at the corporate level as business profits, and then again at the individual level when the profits are distributed to shareholders as dividends, resulting in a higher tax burden on corporate earnings. Option B refers to the possibility of a corporation being taxed by multiple government entities, which is not the same as double taxation. Option C highlights the separate legal status of a corporation, which is not the same as double taxation. Option D refers to the taxation of corporate profits as personal income to shareholders, which is one of the outcomes of double taxation.

Double Taxation Means That