A withholding tax

Question

A withholding tax

Quizplus · Accepted Answer

A withholding tax is a tax that is deducted from the income at the source, by the payer of the income. The tax is then remitted to the local tax authority, which assures that it will receive the tax due on passive income earned within its tax jurisdiction. The burden of the withholding tax is borne by the taxpayer who did not directly generate the income that serves as the source of the passive income. Therefore, options A and C are correct. Option B is incorrect as a withholding tax is not a direct tax on workers.

A Withholding Tax