Many nations follow the worldwide principle that they have the right to tax income earned outside their boundaries by entities based in their country.

Question

Quizplus · Accepted Answer

This is a generally accepted principle of international taxation known as "residence-based taxation" or "worldwide taxation". It means that a country can tax its residents on their worldwide income, including income earned outside the country. However, there are also other principles of international taxation, such as "source-based taxation", which means that the country where the income was earned can tax that income even if the entity is based in another country.

Many Nations Follow the Worldwide Principle That They Have the Right