Taxation of Foreign Income

Taxation of foreign income refers to how countries tax the income earned by their residents from sources outside their borders. Generally, residents must report and pay tax on their worldwide income, including foreign earnings. However, to avoid double taxation, many countries offer credits or exemptions for taxes paid to other nations. This means if you've paid tax on income abroad, your home country may reduce your tax bill accordingly. Understanding these rules is essential for individuals or businesses earning money internationally to ensure compliance and optimize their tax obligations.