Around The World
Income taxes are used in most countries around the world. The tax systems vary greatly and can be progressive, proportional, or regressive, depending on the type of tax. Comparison of tax rates around the world is a difficult and somewhat subjective enterprise. Tax laws in most countries are extremely complex, and tax burden falls differently on different groups in each country and sub-national unit. Of course, services provided by governments in return for taxation also vary, making comparisons all the more difficult.
Countries that tax income generally use one of two systems: territorial or residential. In the territorial system, only local income – income from a source inside the country – is taxed. In the residential system, residents of the country are taxed on their worldwide (local and foreign) income, while nonresidents are taxed only on their local income. In addition, a very small number of countries, notably the United States, also tax their nonresident citizens on worldwide income.
Countries with a residential system of taxation usually allow deductions or credits for the tax that residents already pay to other countries on their foreign income. Many countries also sign tax treaties with each other to eliminate or reduce double taxation.
Countries do not necessarily use the same system of taxation for individuals and corporations. For example, France uses a residential system for individuals but a territorial system for corporations,International tax - France Highlights 2012, Deloitte. while Singapore does the opposite,International tax - Singapore Highlights 2012, Deloitte. and Brunei taxes corporate but not personal income.International tax - Brunei Darussalam Highlights 2012, Deloitte.
Read more about this topic: Income Tax
Famous quotes containing the words the world and/or world:
“Cash-payment never was, or could except for a few years be, the union-bond of man to man. Cash never yet paid one man fully his deserts to another; nor could it, nor can it, now or henceforth to the end of the world.”
—Thomas Carlyle (1795–1881)
“In our world of big names, curiously, our true heroes tend to be anonymous. In this life of illusion and quasi-illusion, the person of solid virtues who can be admired for something more substantial than his well-knownness often proves to be the unsung hero: the teacher, the nurse, the mother, the honest cop, the hard worker at lonely, underpaid, unglamorous, unpublicized jobs.”
—Daniel J. Boorstin (b. 1914)