Term a tax that is levied by a country of source on income paid, usually on dividends remitted to the home country of the firm operating in a foreign country?
Correct answer: B. Withholding tax
- A. Wealth tax
- B. Withholding tax
- C. Income tax
- D. None of these
Explanation
Withholding tax is deducted at the source before income is paid to the recipient, commonly including dividends sent from a foreign subsidiary to its parent company. Wealth tax and ordinary income tax are broader categories, not this specific collection method.
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About Public Finance
Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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