"Double taxation" refers to:

Question

Quizplus · Accepted Answer

Double taxation refers to the situation when a corporation pays taxes on its profits at the corporate level and the shareholders pay taxes on dividends received from the same profits at their personal level. This results in the same income being taxed twice, hence the term "double taxation." Options A and D are not correct because they do not accurately describe double taxation, and option B is only partly correct as it refers to corporations paying taxes on both dividends and retained earnings, but it does not fully capture the concept of double taxation.

"Double Taxation" Refers To