The basic idea behind withholding taxes for foreign investors is
A) to receive taxes on passively earned income.
B) a recognition that most foreign investors are unlikely to file taxes in the host country.
C) to ensure that income earned is taxed by the host country.
D) all of the above.

Question

Quizplus · Accepted Answer

Withholding taxes for foreign investors serve multiple purposes. Firstly, they ensure that income earned by foreign investors is taxed by the host country. Additionally, they recognize that foreign investors may not file taxes in the host country, which makes it necessary for taxes to be withheld at the source. Finally, they allow the host country to receive taxes on passively earned income. Therefore, all of the above options are correct.

The Basic Idea Behind Withholding Taxes for Foreign Investors Is