Understanding International Taxation
The world has turned into a global village whereby both individuals and business entities conduct their businesses outside their country borders whereby they are subjected to varying taxation laws of the particular country. This gives birth to international taxation, whereby people engaged in international businesses have to understand or engage the services of people who understand the different taxation systems of the various countries that they are dealing with. Governments need to earn revenue from taxes all over the world and its up to them to look out for all avenues which are eligible for this taxation process including foreigners who have set up businesses in that country as they are obligated to pay tax as they enjoy the amenities of the host country.
For those individuals or even businesses who are conducting businesses in countries other than their mother country are obligated to pay international tax to the respective governments and it is very confusing how the taxation system should operate given that it is very different for varying countries. What could happen to people who are trading in varying countries is to be exposed to double taxation whereby the same income will be taxed by the various countries and there could also be the capability of no taxation as neither of the countries is aware who should tax the client.
It is a relief however for those businesses operating abroad whose incomes have been taxed inconsistently as there reductions of tax after careful calculations by very experienced international tax institutions that are well versed with this subject. There is also the possibility of the issuance of foreign tax credits whenever it is discovered that the individual or business entity have actually remitted tax to other jurisdictions. It is therefore important for all businesses and individuals to always ensure that they follow up on their international FATCA tax payments as there is the possibility of refunds whereby there was double payment or even tax credits where there was overpayment.
Most large international corporations who have their businesses spread out in different countries around the world ensure that they at all times hire the services of tax specialists such as accountants and lawyers who are then well versed to control their international tax liabilities and keep them at the optimal minimum. Most reputable audit firms spread all over the world in various countries will always have an international tax department with all the expertise that is ready to be used by any corporations or even individuals who need to control their tax liabilities.